Cisco Systems is a $40B global leader in internet technology. However, did you know it was not destined to be such? In fact, it was not likely to be the leader of the internet technologies at all until a relationship between two other companies failed? Do you recognize the name “3Com Park”? This is the name that was given to San Francisco’s famed Candlestick Park from 1995 until 2002 when a Silicon Valley technology company, 3Com, leased the rights to name that stadium. It seems unnatural that the famed location of the San Francisco 49ers and, for you trivia fans, the location of the last Beatles concert, would be changed temporarily to that of a technology company. Yet, the people of San Francisco’s never accepting the name change and their lack of acceptance symbolizes the long history of failed relationships that besieged 3Com and kept it from ever becoming the leader in the global internet.
There are Six Timeless Principles that affect six areas of every relationship which must be understood and managed in order for the relationship to be successful. Like gravity effecting both small pebbles and large boulders alike, the Six Timeless Principles affect every relationship whether it is an interpersonal relationship or an organizational one or one between a city and a company (public/private). [You can learn more about his in the book “Six Strand Weave” which you can purchase on this blog site.] Those 6 areas are shown below in the Relationship Wheel™.
The failure of 3Com to attain its place as global leader of the internet comes from its inability to manage the area of relationship in the Relationship Wheel™ referred to as “Chemistry and Culture”. The company that now dominates the global internet, Cisco Systems, is a master of doing such and, ironically, was named after the last part of the city name San FranCISCO.
If you are a technology or business person you may know that 3Com no longer exists and was purchased in whole by computer technology giant, HP, in November of 2009. However, at one time 3Com was a start-up and innovative leader of networking technology. What happened?
3Com was co-founded in 1979 by Robert Metcalfe, Howard Charney, Bruce Borden, and Greg Shaw. Metcalfe had been primarily responsible for developing the networking technology called ethernet, a wire or cable based networking technology. Two years later, in 1981 Judy Estrin and Bill Carrico (who are serial entrepreneurs having started 7 successful technology companies over 3 decades) started another company named Bridge Communication. Cisco Systems was still a gleam in the eye of Stanford University professors Leonark Bosack and Sandy Lerner which didn’t exist until 1984, 3 years after Bridge Communications and 5 years after 3Com.
As 3Com and Bridge addressed advanced their technology offerings 3Com became the leader of network adaptor cards, something now built into every PC or Mac, while Bridge Communication shipped the first commercial router, something found in every home today that has more than 1 device on the internet. In 1987 3Com formed a relationship with Bridge Communication. In business terms the relationship was an acquisition. In cultural reality it was a merger. Regardless, it was thought by all in the computer and network industry that with the 3Com acquisition of Bridge, the fate of the future of the internet was securely in 3Com’s hands.
In fact, it was. Yet, like a San Francisco 49ers’ full back rushing toward the goal line, the future success of 3Com dominating the internet was fumbled when that future was hit broadside by the failed relationship between 3Com and Bridge. 3Com and Bridge were still one company. However, they did not achieve the Shared Vision that was before them when they were merged.
The area of Culture of any organization has many aspects. However, 3 that are always present are
- How the organization makes decision
- How the organization handles finances, and
- How the organization communicates both internally and externally.
The combining of the different cultures of 2 organizations is anchored in these 3 areas. Failure in any one of them results in failure in the combining of cultures, the “chemistry” of the relationship.
The combined company of 3Com and Bridge Communication was unable to navigate the Culture combination issues surrounding Decision Making. While this relationship issue continued, there had been massive loss of people and tremendous internal disagreement on direction. I spoke in 1991 with CEO, Eric Benhamou, who took over in 1990 after 3 years of the 3Com/Bridge “merger” languishing. He was still struggling with defining the 3Com culture. Ultimately, the marketplace had looked elsewhere for solutions and it found a company named Cisco Systems. I had the pleasure to represent Bridge Communications prior to the failed relationship with 3Com, turned down opportunities to join 3Com in the early 90’s and joined Cisco Systems in 1992. Later, as Executive and Chief Strategist for Global Government Solutions at Cisco Systems, I had the opportunity to work with Judy Estrin when, ironically, she became Chief Technology Officer or Cisco Systems from 1998-2000.
The lesson is that in order for a relationship to succeed, the entities entering into relationship have to learn how to work well together in decision making, handling finances, and communicating. Although this sounds like a script for any counseling of a married couple, take note that the Six Timeless Principles affecting the six areas of relationship effect all relationships the same way. That includes organizational relationships, such as mergers, acquisitions, and alliances, as well as, interpersonal relationships.
Tomorrow’s blog will discuss how this same area of Culture was more successfully handled by Cisco Systems in over 72 acquisitions that were made in less than 5 years.