Thread regarding Cisco Systems Inc. layoffs

@c6 I don't know how we end up with these clowns, he did nothing new, just the oldest trick in the book. Relentless cost cutting.

Liz and Mark will celebrate the next quarters but I just don't see customers renewing their services contracts to get chatbots.

@ay this is good, but not sure if Cisco leadership is willing to change or truly ready to ‘transform’

lol what did Mark do now? He was never qualified to be CFO.

TRANSCRIPT:

# Mission-Driven Leadership vs. Organizational Gravity

What I have realized over the past few decades is that we have built an economy that rewards people for making money without necessarily creating value, and sometimes even by destroying it.

This behavior is so common that we struggle to describe it accurately. Terms like mission drift sound like navigation errors, and bureaucracy suggests excessive paperwork. A more accurate, if old-fashioned, word is corruption.

Much of the discussion around leadership focuses on visible elements such as business models, organizational charts, strategy, and culture. These are important, but they do not explain the invisible force that pulls organizations toward mediocrity or failure.

## The Force of Organizational Gravity

I use the analogy of gravity because, like physical gravity, you can deny its existence, but it still affects you. Organizations operate within a highly financialized economy, where financial incentives transmit values throughout every level of the company.

This creates enormous pressure to:

• Prioritize quarterly results over long-term success
• Betray promises made to customers and employees
• Sacrifice product quality, design, craftsmanship, or values
• Treat people and principles as resources to be exploited in pursuit of profit

Ironically, many of the most destructive decisions are justified in the name of profitability, even though they often prove deeply unprofitable over the long run.

One of the strangest aspects of modern organizations is that nobody feels responsible. Founders blame investors. Executives blame boards. Managers blame executives. Employees blame management. Everyone believes they are simply responding to pressures from above.

I describe this as "the force that no one controls, but everyone obeys."

## Johnson & Johnson: When Values Fail

A powerful example is Johnson & Johnson.

Before taking the company public, Robert Wood Johnson II worried that shareholder pressure might eventually overwhelm the company's values. To prevent this, he created the famous Johnson & Johnson Credo, which established the company's priorities:

1. Patients, doctors, and nurses
2. Employees
3. Communities
4. Shareholders

He believed these priorities were so important that he had the Credo carved into massive limestone monuments placed at company headquarters.

For decades, this philosophy helped guide the company.

Eventually, however, later generations of leadership abandoned it.

In my view, the clearest betrayal of the Credo was the asbestos contamination of Johnson & Johnson baby powder and the subsequent attempts to conceal what the company knew. Litigation later revealed internal documents discussing both the risks and the desire to protect profits.

This illustrates an uncomfortable truth:

It does not matter what is written on the walls.

It does not matter what your mission statement says.

It does not matter what your stated values are.

If the real operating system of the organization rewards only maximizing shareholder value and short-term financial metrics, those incentives will eventually override the stated mission.

## Building Incorruptible Companies

I do not believe this outcome is inevitable.

Across nearly every industry there are companies that resist these pressures. When examined together, these organizations reveal a pattern:

They violate many of today's accepted "best practices."

Academic research consistently shows that certain governance structures and leadership practices create greater longevity, stronger mission alignment, and superior long-term value creation.

From this evidence, we can develop a blueprint for building organizations that resist organizational gravity.

## The Culture Bank

One of the most important ideas is what I call the Culture Bank.

Modern organizations obsess over ROI, yet many of the most important leadership decisions appear negative on an ROI spreadsheet because:

• The costs are immediate and measurable.
• The benefits are intangible and long term.

Trust is an asset.

Like money, it can be accumulated or depleted.

Every action either makes:

• A deposit into the culture bank, or
• A withdrawal from it.

### H-E-B During the Texas Ice Storm

During a major ice storm in Texas, power failed inside an H-E-B grocery store while customers were stocking up.

The store manager gathered everyone and announced:

"The checkout system is down. Just take your groceries and go."

Many customers were moved to tears.

People often assume this was a courageous manager acting independently.

It wasn't.

This was company policy.

H-E-B trains employees for situations like this.

Traditional financial analysis would call this a mistake because the company can calculate the exact value of the inventory that left without payment.

What cannot be calculated is the enormous amount of trust and loyalty created by that decision.

That trust became a massive deposit into the company's culture bank.

## Protecting the Company's Most Valuable Asset

Many mission-driven employees spend their careers defending organizational values against spreadsheets that justify small ethical compromises.

Someone inevitably argues:

"If we make the product just a little worse, profits will increase by 3.2%."

The Culture Bank provides a clear response:

No.

That proposal is attempting to liquidate the organization's most valuable asset.

## Never Make Withdrawals

Devoted Health founder and CEO Todd Park taught me a simple principle:

Only make deposits. Never make withdrawals from the Culture Bank.

Clay Christensen expressed the same idea another way:

"It is easier to do the right thing 100% of the time than 98% of the time."

Once an organization adopts absolute standards, countless debates disappear.

There is no discussion about whether compromising quality is worth a little more profit.

The answer is always no.

This consistency creates trust throughout the organization.

## Mission Creates Productive Difficulty

Mission-driven leaders understand that doing the right thing is often harder.

That difficulty is not a flaw.

It is an opportunity for innovation.

Steve Jobs became famous for refusing design compromises because he believed excellence required maintaining uncompromising standards.

The same principle applies throughout organizations.

Hard commitments produce hard problems.

Hard problems often produce breakthroughs.

## Costco's $1.50 Hot Dog

One of the best examples is Costco.

Since 1986, Costco has sold its famous hot dog and soda combination for $1.50.

Meanwhile, prices across the economy have risen dramatically.

Maintaining that price has become increasingly difficult.

In 2008, Costco's COO told founder Jim Sinegal:

"We have to raise the price. We're getting ki-led."

Sinegal's legendary response was:

"If you raise the price of the effing hot dog, I will ki-l you."

Rather than raising prices, Costco attacked the underlying costs.

The company:

• Built its own hot dog manufacturing plants
• Vertically integrated production
• Aggressively negotiated beverage contracts
• Continuously reduced operating costs

Costco now sells more than 200 million hot dogs every year, more than every Major League Baseball stadium combined.

Adding just one dollar to the price would generate more than $200 million in additional annual profit.

So why don't they?

Jim Sinegal explained:

If Costco quietly raised prices by just 3% across the store, almost nobody would notice.

The company could increase its net income dramatically.

But he compared doing so to taking he---n.

The first increase makes the next one easier.

Eventually:

• Quarterly expectations adjust.
• The company loses its low-price advantage.
• The organization's promises become meaningless.

The easy decision ultimately destroys the mission.

## The Fundamental Leadership Question

Leaders should ask themselves one question every day:

Does this decision make money by whatever means necessary, or does it make money by advancing our mission?

There is nothing wrong with wanting to grow.

There is nothing wrong with making profits.

There is nothing wrong with building a successful business.

The essential requirement is this:

Create more value than you capture.

When an organization's mission succeeds, and financial success naturally follows from fulfilling that mission, it becomes possible to build a truly mission-driven company.