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Inder Sidhu

Inder Sidhu

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How to Get Beyond False Choices

Posted: 05/26/10 12:48 PM ET

Ever lose sleep over a difficult business decision? Did you watch the hours tick by as you agonized over the advantages of one option, or the risk of selecting the other?

There was a time when I, like many people, would rigorously distill difficult choices down to this or that, in the name of "focus." But my nights have become much more restful since I stopped assuming that I had to make trade-offs and instead opted to "do both."

In my 15 years at Cisco, I've seen my company prosper by undergoing this same transformation -- from trade-offs, false choices, and reduced expectations -- to doing both. The world's largest maker of networking gear, Cisco is widely known for the high-value, high-margin products that it sells to big businesses. But that's only half the story. We also address opportunities that don't fit that traditional model, like the rise in home networking.

After trying to repackage sophisticated business products as consumer devices, Cisco recognized that this wasn't the best approach. So it tried an altogether different strategy: Cisco acquired Linksys, a company whose business model and product development strategy cater to the consumer market with low-margin products sold through retail outlets to customers with minimal post-sales support.

Cisco could have chosen to make Linksys over in its own image. But instead, it worked to understand Linksys' unique value proposition. Seven years after the acquisition, Cisco holds a leading share of the consumer networking market, thanks in large part to the foundation that Linksys provided. We don't silo adjacent markets into those that fit "our model" and those that do not. Instead, we view opportunities along a continuum and adapt accordingly. More often than not, that means doing two things at once, such as pursuing traditional business customers and consumers. Healthy tension between complementary alternatives has created a multiplier effect in which each choice strengthens the other.

Cisco isn't the only company doing this. For years, BYD has prospered by providing mobile phone makers with long-lasting, lightweight batteries. It recently entered the automobile industry, which is undergoing the biggest technology transformation in 100 years. BYD had to perfect new manufacturing techniques, develop new distribution pipelines, and overcome difficult engineering challenges. All of these were outside its core area of expertise and required BYD to leverage what it knew and master what it did not. Because the company embraced doing both -- in this case, existing and new business models -- it stands poised to deliver the world's first, mass-production electric passenger vehicle for everyday use.

This approach -- taking on two seemingly opposing activities at once and leveraging each for the benefit of the other -- runs counter to the lessons many of us learned in business school, like maintaining a maniacal single-minded focus. But it allows companies to optimize for today and grow for tomorrow. It provides a framework to speed decision-making, scale expertise, operate flexibly, and replicate successes. Perhaps it can do the same for you.

But how to start? To do both, you should reconsider how you make decisions and ask yourself some questions: Why do I do things a certain way? What options have I failed to consider? What opportunities am I missing? Think about the last time you struggled between two good alternatives. Maybe you chose to lower costs rather than increase quality. Perhaps you picked green manufacturing at the expense of higher profits. Now think about the opportunity cost of what you didn't choose. Better quality might have improved your customer satisfaction. Higher profits could have been invested back in the business -- perhaps even toward sustainability initiatives.

The first step in doing both is recognizing and refusing false trade-offs, and then finding the complementary elements that create the multiplier effect.

Wouldn't your organization benefit from doing both, too? Or would you rather keep tossing and turning?

For more information, view the WebEx recording at Together@WebEx.

Inder Sidhu is the Senior Vice President of Strategy & Planning for Worldwide Operations at Cisco, and author of Doing Both: How Cisco Captures Today's Profit and Drives Tomorrow's Growth.

Cross-posted from Harvard Business Online

 
 
 

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