Cisco Promotes Two as Talk of Chambers Succession Heats Up

A week after Cisco CEO John Chambers named several possible successors, two of those named were appointed to president positions with the company.

Cisco Systems is promoting two executives to the position of president, moves that could be the latest steps in setting up a succession plan for when CEO John Chambers eventually steps down within the next few years.

The networking giant on Oct. 4 announced the Gary Moore and Rob Lloyd were appointed presidents of the company. Moore will also retain his job as chief operating officer, while Lloyd will become president of development and sales. Both had been executive vice presidents at the company before the promotions.

The appointments come a week after the 63-year-old Chambers, who has been CEO of Cisco since 1995, spoke with news outlets about Cisco executives who could potentially replace him when he retires in the next two to four years. Among those named were Moore and Lloyd. In all, as many as 10 people are being considered, and the company’s board of directors goes over the list every quarter, Chambers told Bloomberg.

In an interview with Bloomberg, Chambers downplayed the speculation that the promotions have given Moore and Lloyd the inside track for the CEO seat, though he indicated they are part of the “first wave” of executives to be considered, noting that there are other strong candidates within Cisco.

“It’s not a two-horse race at all, and it’s not a race,” he said. “We win as a team. Whoever the leaders will be at Cisco have to be very strong team players.”

Chambers oversaw tremendous growth at Cisco over the past 17 years, particularly as the company benefited from the rise of the Internet to become the world’s largest data center networking vendor. However, in recent years, Cisco has seen its rivals, such as Hewlett-Packard and Juniper Networks, gain market share at Cisco’s expense.

The company several years ago began a push to leverage its networking expertise and rapidly expand into more than three dozen markets, a move that analysts said distracted Cisco from its core businesses and allowed HP, Juniper and others to extend their reach in the space. Cisco last year underwent a significant and painful restructuring that saw it shed underperforming businesses—including much of its consumer efforts and, more recently, some hardware products, including the Cius business tablet—and cut more than 6,500 jobs in an effort to reduce expenses by $1 billion.

Cisco earlier in July announced another 1,300 job cuts, noting the uncertain global economy and a slowdown in corporate IT spending. The company also is seeing a dramatic shift in the market to software-defined networks (SDNs), which essentially remove the network intelligence and management from complex, expensive switches to software-based network controllers. Cisco executives have said they are embracing the move to SDNs, though analysts say the company—which makes millions of dollars from selling switches—could feel the impact in lost revenue.

Moore, who has been with Cisco since 2001, was a chief architect of the restructuring, with Chambers often recognizing his efforts during conference calls with analysts and journalists. He will continue to be in charge of Cisco’s operations, as well as services, IT, marketing, supply chain, HR, corporate and government affairs, and legal departments.

Lloyd, who joined Cisco in 1994, is in charge of the company’s development and sales efforts, technology innovation and customer relationships. Cisco officials said the company is looking to create a tighter link with customers.

Pankaj Patel, executive vice president and chief development officer, will continue to lead Cisco's development operation, while Chuck Robbins, who had run the Americas sales region, will take over Lloyd's prior job as head of worldwide sales. Wim Elfrink, executive vice president and chief globalization officer, is still in charge of emerging solutions and developing new markets, and will integrate his business into the development and sales unit. All three will report to Lloyd.

Robbins and Edzard Overbeek, senior vice president of global services, were among the other potential CEO candidates mentioned by Chambers.