Navigating risks in transformation: Thimaya Subaiya, chief transformation officer, Cisco

In the last eight years, Cisco has undergone an internal transformation, strategically developing a distinctive customer success model aimed at simplifying complexities for its clientele and establishing a fresh benchmark for smooth business interactions.

At the heart of this transformation is a dedication to addressing the evolving needs of customers, particularly their preference for software consumption through subscription licenses as opposed to traditional models, said Thimaya Subaiya, chief transformation officer, Cisco in an interview with Dataquest. Cisco's vision goes beyond conventional product-centric approaches, emphasizing an exploration of specific use cases and desired outcomes, he said. Reflecting the industry's increasing emphasis on security, Cisco has led the way in initiating an approach where the commencement of application development places paramount importance on security layers.

DQ: Considering the rapidly evolving tech industry landscape, can you elaborate on the specific industry trends that are compelling companies to undergo transformation?

Thimaya: I will discuss Artificial Intelligence (AI), a technology that significantly enhances simplicity in various aspects. The evolution of AI has shifted us from navigating through multiple complex processes to a scenario where machines seamlessly handle tasks without requiring conscious thought. As the industry progresses, Cisco plays a crucial role in pivotal areas.

Firstly, connectivity is fundamental to AI, as it forms the basis for scaling any AI endeavor. Companies, in developing machine learning models and consumer-facing products, prioritize connectivity due to its inseparable link with underlying security concerns. In the current landscape where applications are built with a security-first mindset, AI and its data consumption must also be secure. Cisco recognizes these trends and is actively driving its transformation towards ensuring secure AI environments.

The recent intent to acquire Splunk aligns with this strategy, providing a robust data foundation with integrated security and observability. This consolidation strengthens Cisco's position in the AI/ML space, reflecting a consistent trend in the industry.

Another prominent trend is the increasing emphasis on sustainability worldwide. Companies are scrutinizing their carbon footprint, not only for environmental responsibility but also for significant cost savings. By adopting eco-friendly products that reduce power consumption in data centers, businesses can achieve substantial cost reductions. Cisco has proactively addressed power consumption in its hardware, and envisioning an AI-driven approach, it can revolutionize how data centers operate sustainably.

Consider an automated dashboard in a data center that identifies a switch consuming excessive power. Instead of a tedious manual investigation, an AI model swiftly detects the issue, generates a support case, initiates the RMA process, and installs a new switch seamlessly. This exemplifies how AI integration can contribute to sustainability efforts, a noteworthy trend shaping the industry's future.

In summary, these trends align with market needs and offer a glimpse into the future, where AI, connectivity, security, and sustainability converge to redefine technological landscapes.

DQ: Transformation inherently involves risks. From your perspective, what are the common risks that companies face during transformation, and how are industries mitigating these risks to ensure a smoother transition?

Thimaya: When I assumed this role, we conducted a thorough examination of various transformation playbooks. Notably, industry reports reveal that the success rate of transformations is alarmingly low, with many endeavors ending in failure. The elusive reasons behind such failures remain a puzzle. Embarking on a transformation journey is a substantial risk for a company, involving a considerable budget, typically ranging from 2 to 3 billion dollars. A common pattern in transformation efforts is the creation of a separate team to spearhead the process. However, recognizing the flaws in this approach, my approach to transformation emphasized integration rather than isolation. Instead of forming a large team, I opted for a compact one with access to every facet of the company. This comprehensive approach allowed us to effect substantial changes, such as streamlining our customer contract process from a week to less than 24 hours. The agility to directly engage with various teams within the company proved pivotal in achieving this efficiency.

The second challenge in transformation lies in managing risks associated with significant changes. Sales and partner compensation structures, technology roadmaps, and the integration of innovative technologies can introduce volatility, particularly if market trends start to show a downturn. Many organizations, faced with this, tend to revert to old practices. Recognizing this pitfall, we focused on establishing not just a strategy but a robust execution plan. This involved making timely decisions and sticking to the chosen path, as deviating without a solid execution plan could jeopardize the entire transformation effort. The key differentiator in our approach is the emphasis on strategy alignment with a well-defined execution path, enabling agile decision-making and fostering a transformative environment.

DQ: Technology is a driving force behind many transformations. From your perspective, how are industries responding to rapid technological advances, and how does this response impact the trajectory of their transformation efforts?

Thimaya: Two distinct trends are evident in the current market landscape. Firstly, there are companies that wholeheartedly embrace new technologies, investing 100% and pursuing the path of net new without acknowledging the early stage of technological development we find ourselves in. It's comparable to being in the chariot stage rather than having reached cars, let alone electric cars, in the technological evolution. Many companies blindly commit to net new technologies without considering the infancy of the overall technological landscape. Conversely, successful companies adopting new technologies strategically select specific use cases for application, using the technology purposefully. For instance, the integration of blockchain significantly influenced the development of AI, providing easily accessible and indexed data in near-instant response times—something not achievable without blockchain. This success stems from a focused approach, where companies identify a particular use case for a given technology and implement it exclusively for that purpose.

Consider blockchain, for example; its impact on AI underscores the significance of choosing specific use cases for technology adoption. The metaverse is another example—rather than opting for a sweeping change in how we work and live, successful companies approach it with targeted precision. They recognize that the metaverse is most applicable and beneficial in the gaming sector, aligning the technology with the use case where it makes the most sense. The key takeaway is the necessity for companies to avoid putting all their eggs in one basket and, instead, harness technology trends for specific and efficient use cases. As we move forward, continuous evolution and adaptation will likely define the technological landscape.

DQ:With the rise of digital transformation, consumer expectations have evolved significantly. How are industries adapting to meet these changing expectations?

Thimaya: When considering customer expectations, there was a time when purchasing items for personal and work use invoked different expectations. However, with the advent of the digital age, the distinction blurred as consumers could buy everything online, whether for personal or professional needs. This shift led to a mindset where the purchasing experience became uniform, whether it was a bottle of water for personal use or servers for work requirements. This convergence of expectations is particularly noticeable among key decision-makers, such as CIOs, chief customer officers, and security officers. The significant change lies in the fact that when these individuals buy technology, they now anticipate the same seamless experience they encounter as consumers. This shift underscores the importance of customer success, a concept that extends beyond the implementation phase to encompass ongoing adoption and user satisfaction. The mistake many companies make is conflating the successful implementation of technology with the subsequent user experience. It's not just about getting the technology ready for use; it's also about ensuring a positive ongoing experience for the users who engage with it daily. For CIOs and other decision-makers, the expectation is clear—they want the same level of ease and satisfaction in acquiring and using technology as they would when making personal online purchases. The challenge for companies is to understand and meet these expectations to thrive in the evolving digital landscape.

DQ: In the tech industry, customer expectations are constantly evolving. How is Cisco aligning itself with the shifting demands of tech-savvy customers, and how is the company staying attuned to their needs in the age of digital transformation?

Thimaya: I was brought into this company with the specific mandate of driving overall customer success. Initially, I assumed the role of Chief Customer Experience Officer, during which we worked diligently to establish an industry-leading customer success model. Over time, numerous companies globally have sought our advice on building effective customer success models, a testament to the success of our approach. Our foundational principle centered around a simple playbook, starting with implementation—a critical yet often overlooked phase between product purchase and adoption. Recognizing that 80% of renewals falter due to inadequacies in implementation, we prioritized guiding customers through the necessary steps to ensure successful adoption.

Understanding that no product is flawless, we acknowledged that software, in particular, hovers around 80% perfection. Our emphasis shifted towards creating an exceptional customer experience, actively addressing glitches and bugs throughout the customer's lifetime. This dedication to customer satisfaction has set us apart, fostering unparalleled loyalty. Even in challenging scenarios, such as during data center setup issues, our customers remain committed to our success, a rare phenomenon in the industry.

Our commitment to customer loyalty extends beyond mere satisfaction—it has become a catalyst for positive word-of-mouth recommendations. Our customers, impressed by our partnership and willingness to go above and beyond, consistently advocate for us when interacting with their peers. This network effect of customer recommendations has significantly contributed to our market standing.

In essence, our customer success approach has not only fortified our readiness for transformation but has also become a distinguishing factor. By prioritizing the customer, focusing on their outcomes, and diligently addressing implementation challenges, we've created a unique position in the industry—one where customer loyalty is paramount, and positive recommendations flow organically, propelling us forward in our transformative journey.