Former Cisco CEO Bets Big On West Virginia As Future Startup Hub

John Chambers, former CEO of Cisco Systems, has concerns about the state of public education in the United States. How, asks the man who grew Cisco’s annual revenue from $70 million to $40 billion, does the U.S. prepare its young people to participate in the digital economy? The answer goes back to Chambers’ upbringing in Charleston, West Virginia, where his parents — both doctors — instilled in him a love of learning — and the sense to keep an eye out for the right time to make big changes.

“Education was a given for us, and every member of our family completed at least undergraduate school, if not graduate school,” says Chambers, who earned an MBA from Indiana University’s Kelley School of Business sandwiched between a BA and JD from West Virginia University. “My parents taught us from the beginning that education was the great equalizer in life, but you also had to be in the right location. And things evolved where they actually prepared us to leave West Virginia. They prepared us to watch market transitions and move.”

West Virginia may not have been the best springboard for a young career when Chambers, 69, was growing up; nor is well-known for its educational prowess now. But Chambers wants to change that and more, and he’s starting his campaign at his alma mater. On Friday (November 9) the school announced it will change the name of its business school to the John Chambers College of Business and Economics — a move made in conjunction with a September announcement that WVU’s B-school will launch its first startup accelerator program to support innovators and entrepreneurs across the state.

“To say I’m committed to this field would be an understatement,” Chambers tells Poets&Quants.

ACROSS DISCIPLINES AND INDUSTRIES, ‘MORE AND MORE STUDENTS WANT TO GO TO STARTUPS’

Over the years, Chambers has given $10 million to West Virginia University. He’ll be giving even more to support the new Startup Engine at the B-school that now carries his name, as well as other programs, though the sum will remain undisclosed for now per an agreement between Chambers and WVU. Regardless, the new initiative and the financial backing can only help a B-school whose 12-month full-time MBA program is unranked and whose online MBA was most recently ranked 47th by U.S. News & World Report.

Because Chambers knows about entrepreneurship as well as anyone living. As Cisco CEO, he oversaw 180 acquisitions, many of them fledgling companies that emerged from nearby Stanford Graduate School of Business. Retired from Cisco since 2014, he has stayed busy in the entrepreneurial ecosystem, helping to launch 16 startups (and counting) while traveling the world to lecture MBA and other students.

But perhaps Chambers’ biggest claim to fame in the business world is how he guided Cisco through the dotcom bust of the early 2000s. In one year, a quarter of the company’s customers vanished and Cisco had to write-off $2.5 billion in inventory. In response, Chambers piloted the company through the choppy waters and ensured no repeat of the disaster by creating a supplier management system that ordered raw materials as needed rather than stockpiling them, which is how the company had gotten into trouble.

Chambers survived, and Cisco survived and thrived. Now, when Chambers talks about what there U.S. economy needs, people listen. “Because of digitization and artificial intelligence, we’re going to destroy a huge amount of jobs, probably in the area of 30%,” he says. “Maybe even 40% of the jobs that exist today will be displaced over the next decade. The quality of students is as good as ever, but when the economy’s really strong like it is now, then students tend not to go on to graduate school and business school. When I poll the engineering schools, the undergraduate business schools, the computer science schools, even some of the med schools, I’m seeing more and more students want to go to startups, instead.”

IF WE DON’T GENERATE A LOT MORE STARTUPS, WE’VE GOT AN ECONOMIC PROBLEM COMING AT US’

This is one reason more and more business schools are putting resources into entrepreneurship programs. And it’s why Chambers practices what he preaches on entrepreneurship, both in business and in the classroom.

“I believe we’ve gotta become a startup nation again,” he says. “We shouldn’t kid ourselves. We’re not even in the top 10 in innovation anymore, where we used to be No. 1, using the Bloomberg Index as an example. We’re getting out-executed by countries that will shock you in terms of the speed in which they’re moving on focusing on startups, changing the education system, and focusing on job creation, and inclusive both by gender and diversity and geographic locations.” For example, he says, look at France. “Three and a half years ago I predicted that France would be the startup nation for Europe. Even my best friend said, ‘John, you’re gonna miss this one badly.’ But I’ve lectured at École Polytechnique, I’ve lectured at the business schools. I’ve talked to their startups. You could see this one coming.”

Strange as it may sound, Chambers’ business instincts are enhanced, not hindered, by his dyslexia, a condition he has been public about fighting — and embracing. “I’m good at pattern recognition, I’m dyslexic,” he tells P&Q. “So the way I survive is to recognize patterns and go A-B-Z in the markets. If I were to take a shot at it, I think the No. 1 issue is the economy: jobs are pretty easy to come by, very easy to come by out here on the West Coast and the Valley, the easiest they’ve been probably in a decade. Secondly, I think more people are going into startups, and in startups when they have an idea and an opportunity they tend to jump and maybe not pursue the graduate degree. And the balance of that, when the economy suffers, again graduate school’s a good way to get education or return to it in terms of the approach.

“The biggest market transition going on is every aspect of our society is moving to technology and digitization and artificial intelligence. And you’ve got to get ahead of that before you get left behind. It’s a nice way of saying, ‘If we don’t generate a lot more startups, we’ve got an economic problem coming at us.’ Does that make sense?”

PREPARING FOR THE FUTURE

The timing of Chambers’ investment at WVU coincides with the release of his book, Connecting the Dots: Lessons for Leadership in a Startup World, co-written with Diane Brady. In it, he writes about many of the concepts he lectures about to business school students around the globe — especially the vital importance to a country’s economic viability of forward-thinking leadership. He gives particular credit to the leaders of India and France, Narendra Modi and Emmanual Macron.

“It’s not about learning from the past, it’s about preparing for the future? When you do that it starts with choosing a country leader. Modi, with a billon people in India, he outlined a vision for his country four years ago; I’m the U.S.-India strategic partnership chairman for businesses between India and the U.S. I was just there a week ago meeting with a guy who runs a business and with Prime Minister Modi. And he outlined a vision for his country around digitization, digital manufacturing, becoming a startup nation, changing education, changing healthcare, and including this across all 29 states and seven territories.

“It always starts that way. Same with France: Macron outlined a image of a new France, not an image of the past. You have to have the courage to take a risk and maybe you get beat up for it. It takes you at least five years to really see that fundamental changes occur. In five to ten years, we’ll really have huge traction. But all it took for France was an entrepreneur making France a startup nation. I get to see this firsthand because I’ve flown with the French delegation, including President Macron, on his plane to meet with Prime Minister Modi in India. So I got to see this from the side as way very few Americans ever get a chance to do.”

Is U.S. leadership up to the task in this new and rapidly changing digital economy? Chambers, who served as John McCain’s presidential campaign co-chair in 2008, says no.

“We’re very disparate. We’re deeply divided as ever,” he says. “I see very few people from either side bringing the country back together and getting at the real underlying issues. We’re talking at each other, rather than dealing with the fundamental issues. Our education system is broken. We are not having an inclusive growth society throughout the heartland of America. Both parties have let their constituencies down. And we’ve moved further to the right and further to the left when America wants to be governed to the center. My family has always taught me America always rises to the occasion, but boy, we’ve got our work cut out for us.

“We don’t even have a digitization strategy in this country, or a start-up strategy. We don’t even have one. Can you imagine the most innovative country in the world without those strategies? We don’t even have a program for this. Every other major country in the world is focused on it. So I’m trying to help play a small part. That was one of the primary reasons I wrote the book, and one of the reasons for what I’m doing at West Virginia.”

DON’T MISS LOVE & THE MBA: COUPLES WHO STUDY TOGETHER, STAY TOGETHER and THESE BOOTH MBAs ARE BETTING BIG ON AFRICA