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Sun 16 Dec 2007 02:33 PM

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Ten minutes with… Wim Elfrink

Wim Elfrink, Cisco's chief globalisation officer, is a man with a mission - he is busy setting up Cisco's base in the Indian city of Bangalore, and developing it into a full-fledged corporate office. Eliot Beer caught up with him on a recent visit to Dubai.

Wim Elfrink, Cisco's chief globalisation officer, is a man with a mission - he is busy setting up Cisco's base in the Indian city of Bangalore, and developing it into a full-fledged corporate office. Eliot Beer caught up with him on a recent visit to Dubai.

What is Cisco's globalisation strategy?

A lot! GDP growth in what we call emerging markets is higher - far higher - than in any of the so-called mature markets. For Cisco, this means we expect 70% of our future growth to come out of the Middle East, Africa, China and the other Bric countries.

We have publicly stated that we will have 20% of Cisco’s top talent in Cisco East. That’s absolutely not the case yet.

This is not hype - we really believe in it. So then you get the traditional question - American companies export, but that isn't real globalisation, is it? We think that the growth will come out of these parts of the world - but we also think the innovation will come from here as well. This is the second element in our globalisation strategy, being able to capture the innovation.

For innovation, a lot of it will be greenfield - look at Dubai, it's a perfect example of something coming out of nothing. We also expect a lot of new business models to emerge here, specifically managed and hosted services. The penetration of PCs is far lower here than in developed markets. Things will be mobile here. We've decided we want to be closer to this innovation, in terms of R&D.

The third aspect is the need for talent - if you look at the next five to ten years, our need for professionals will grow tenfold. These people are simply not around in the US and Europe.

So growth, innovation and talent management have all made us decide to come closer to this part of the world. Globalisation for us meant we had to build a second head office - that's how we chose India. Here we have the whole range of activities - services creation, R&D, marketing, finance - you can really see it as our second head office.

So we have what we call a Globalisation Centre East in India - and it's not about India, it's about the East.

We've chosen India because there we have the talent available, it's a democracy and a free market - we feel comfortable there, we know how it works. India has a great partner base, with companies like Wipro, Tata Consultancy Services, Infosys, Satyam - for India, ICT is an export product, and we want to be known as an Indian company that can help our partners to export.

If you draw a circle around India, you have all these great, innovative places within a three-hour flight, such as Dubai - I'm planning to be here every six weeks, to build relationships and meet a lot of developers here.

For Cisco, real estate is going to be one of the big opportunities - converged networks aren't happening yet in real estate. To do convergence in mature markets is very expensive, because it's retrofitting - but if you think about the towers being built here, and you think about the amount of copper you save with converged networking, it's tremendous. But even more, you can develop all kinds of new services - security, entertainment - but also a lot of data mining. For developers, we think converged networks are going to be a major opportunity, and will be added to their portfolio of services.

So for me, Dubai is really a beach-head - Cisco has never worked with developers, so we have to build these relationships, build an entirely new ecosystem. We have to enable companies like Siemens, Honeywell.

What specifically will Cisco be doing to make itself a globalised company?

First I think it's a mindset. It's almost a management challenge. We'll also be using our technology to help us - although I will be travelling to Dubai every six weeks, I'll also be using Telepresence [Cisco's video conferencing system] to build relationships.

Also, to learn globalisation, we have to learn new cultures, new ways of thinking - and believe me, being a board member, we're meeting on a weekly basis, and we can no longer have meetings on a Friday afternoon! We all say we understand different cultures - but we don't.

So what we're doing with globalisation is to create a more collaborative way of managing the company. A lot of American organisations are very much command and control - this is the plan, that's what we're doing. For us, there will be a lot more input from this part of the world - a complete R&D centre will be here, new partners will be here, and using technology we can all collaborate and work together.
When most people hear globalisation, they think ‘cost-cutting', especially in reference to India. Is this the real reason why you're setting up in the country?

That's how a lot of companies have started, and that's the way we started, of course. But it's changed - it's dramatically changed. First, we think cost and labour savings are not sustainable differentiators - even in India, the wages will go up. It can be a good start, but it's not sustainable.

As India is now one of the biggest IT exporters in the world, we think it's sustainable from a partnership point of view. India is still getting younger - for the next foreseeable 30 to 40 years, there's a big supply of talent. India could be a first country in the world to transform from agriculture direct to services - like Dubai has, but on a smaller scale. Most countries go from agriculture, to manufacturing, and then to services.

There are a lot of differentiators, like talent, like proximity. Our reasons to have Cisco Globalisation Centre East in India are much more than cost and labour arbitrage. But it's still the perception - when I told my family that I was going to India, my mother-in-law asked what she had done to deserve this!

From a globalisation point of view, more executives need to come out of their comfort zones, and learn to work with different cultures in different time zones, and with different ways of doing business. I think the only way to be successful as a global company is to be close to where the growth and innovation in the market is.

Where we also differentiate is that we have publicly stated - and this is probably going to be my biggest challenge - that we will have 20% of Cisco's top talent in Cisco East. That's absolutely not the case yet - it's single digits, low single digits, at the moment. I have two strategies to improve this - first, I will take a lot of ex-pats. I think as a company your culture can be 80% global, 20% local - so to get a big impact and maintain your culture, you have to have a step-type of function. To achieve this, I've moved in around 20 executives from all over the world - now I have to start getting local talent, and a lot of Indians back from the US as well.

We have to build a brand - we have to become one of the best companies to work for. I'm very proud to say that recent surveys showed we're the number five company to work for in India - coming from nowhere.

So building the brand, being able to attract talent, having that vision, that we're not there for cost and labour arbitrage, but we're there for top talent, growth, innovation - I think it will attract a lot of talent. For a timescale, though, for attracting that 20% - I think three to five years.

Is this 20% going to come from moving executives from California to India?

Initially it's probably going to be 100% import. My objective for next year is to have 60% imported, 40% local - and then year three should be 20% imported, 80% local. We have to build the brand, we have to build the culture - then you can start adding resources to it more quickly.

In a company like Cisco, three to five years' out if you want to be a global executive, you'll need to speak more than a single language, and you have to have that working experience outside the US or Europe.

Another thing I'm seeing - let's face it, in a lot of US universities we're not the cool company any more. The cool companies nowadays are Google, and the more startup-type of companies.

I'm going to universities and MBA programmes and saying "what about a scholarship? Do you want to come and work in India for a year?" and they see this as something for their career. These things also improve your cool factor.

How is this globalisation drive going to affect your customers, specifically in the Middle East?

What I'm trying to do in my personal contacts, such as with the big developers, is to say "you know me as a vendor - I want you to know me as a strategic partner". They ask what a strategic partner is - we say, a strategic partner is a company with which you start developing a vision, and based upon that vision, you start developing a new set of products and services.

I'm offering beachhead accounts to some innovative customers here - there are lots of them, very innovative - which are building their brands and want to become global companies. I try to create partnerships with these companies - I'm open to joint ventures, I'm open to investments - this is market-making; it's not there at the moment, so we have to create the market.

I also think it will create bigger export opportunities for these companies. That's the big change in mindset - from American companies doing export and localisation, to developing here, locally, and exporting back. That's a big difference.

Cisco's globalisation strategy will create partnerships beyond customer/vendor, it will create a platform for export, and other globalisation opportunities.

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