Playbooks + Pattern recognition.(John Chambers)

When I saw that Patrick O’Shaughnessy had posted an interview with John Chambers last week, I rushed to listen. The following quote contains a number of gems which I will continue to mine.

When Chambers uses the term “pattern recognition” and explains the concept, it’s so much more coherent than the latest BI and data science geek speak.

And when Chambers mentions “[seeing] the patterns so accurately… for 40 quarters in a row” the whole concept of “engineering growth” comes to mind, especially regarding the implications of a public company that can successfully and near-perfectly engineer growth over long time horizons. Cisco’s case reminds me of what I learned about Netflix’s growth levers, and Enron’s artificially engineered growth.

John Chambers was the CEO of Cisco from 1995 to 2015 where he helped grow Cisco from $70 million to $40 billion in annual revenue.


Begin quote (via Invest Like The Best)

Pattern recognition defers to the numbers. [It’s] the ability to be able to see the patterns based upon how an order rate went in a given day of any month, in a given week of any month [or] quarter, of a given quarter in a year—and to see the patterns so accurately that for 40 quarters in a row, we not only didn’t miss… we were plus or minus, always at the midpoint or above in the range of the market. [And that’s] even though eighty percent of our business was new every quarter. So we not only hit our year forecast, [but] we hit the quarter forecast, always at the number, usually 2 cents [per share] above…

…it was that pattern recognition that allowed us to spend money during the quarter and be able to develop in ways that others did not. [It was] pattern recognition that [enabled us so that] if there was a problem or an opportunity, we saw it at the very beginning, which we could then adjust appropriately to.

But it wasn’t just at the top, it was all the way empowered down through the various engineering and sales arms. They were able to see the numbers so accurately. [And] they knew what they needed to change and correct ahead of time on it.

So that pattern recognition is so key. The pattern recognition has always been driven by customers… I get an idea about a market transition enabled by a new technology and then I go straight to customers and say, “what do you think?”

[It’s the] pattern recognition amplified by listening to the right customers at the right time, on what they think, either on the issue or the company, [that] allowed us to do 180 acquisitions with the highest track record… in the hi-tech industry… we were a machine on acquiring [companies]…

We ran playbooks on everything that we did, from acquisitions to being [number] one or two in a product category, to how you digitize a country, etc., in terms of direction.

It is that pattern recognition [which is] then put into playbooks that allows [you as a company] to move at a speed that others can not.

A simple issue: Playbooks. Pattern recognition. Then replicating that pattern much like a great sports team… [for example, the] Warriors team that passes 130 times per game, which is more than anybody has ever done in history, and wins 98% of the games when they pass 130 times…

Watching the patterns, then replicate it and playing it through, and being able to tell those stories again of what works and why it’s applicable.”

End quote

One act at a time. (Jonathan Sacks)

News of Rabbi Lord Jonathan Sacks’ passing hit me pretty hard. I had met the man only once, yet through his teachings I felt so close to him. I’ve been reading his book, Lessons in Leadership, once a week for almost a year. I listened to many of his audio classes and interviews, especially enjoying his appearances in secular mediums, like his recent interview with Tim Ferriss.

It’s not difficult to describe why I am so attracted to Rabbi Sacks’ teachings. He was, in my opinion, a great rabbinic leader who made Torah accessible. His ability to dance between biblical sources, academic references, and business lessons was supremely attractive to my modes of thinking, learning, and perceiving the world around me. My worldview was and will continue to be heavily influenced by his work.

Source: rabbisacks.org

I hope that I can play some small part in contributing to Rabbi Sacks’ legacy, which I believe is to embody a fusion of both the Torah of the Jewish people and the wisdom of the world, in thought, speech and action.

The following is a powerful leadership quote from Rabbi Sacks’ essay on this week’s Torah portion, Ḥayei Sara, from his book, Lessons in Leadership:

“Perhaps….the most important point of [parashat Ḥayei Sara] is that large promises—a land, countless children—become real through small beginnings. Leaders begin with an envisioned future, but they also know that there is a long journey between here and there; we can only reach it one act at a time, one day at a time. There is no miraculous shortcut—and if there were, it would not help.”

This quote is apropos to so many current events in the world, as well as past and current events in my own life. And it resonates with me in an especially deep way as it connects to my current work with entrepreneurs on the theme of “growth”.

My name, Etan, in Hebrew is spelled איתן (spelled Alef – yud – tav – nun). Also, איתן was one of Abraham’s names. As I learned from Rabbi Moshe Schlass years ago on the streets of Jerusalem’s old city, the letters of my name represent the beginnings of future tense conjugations of Hebrew words:

  • א (Alef) = I will be…
  • י (Yud) = He/She will be…
  • ת (Tav) = You will be…
  • ן (Nun) = We will be…

Back to the Sacks’ quote and the theme of growth—we don’t know where tomorrow’s blessing will come from. Predictive data models based on past performance can take us only so far when it comes to estimating new revenue, customers, or other metrics we are tracking (and working to get more of) in a business.

The smartest data scientists, economists, and analysts will tell you the sameprediction isn’t perfect. With the current rise of AI, better prediction is becoming cheaper, but it’s still prediction, which is and will always be imperfect. I’m bringing up prediction here because I often see businesses fall into the trap of putting the “prediction work” (aka business intelligence, forecasting, etc.) in the category of “execution”. I believe that “prediction work” should be bucketed as “vision” (and not “execution”).

Great entrepreneurs and investors know that even the best ideas are free, and without execution they are worthless. You don’t know; you can’t know what will happen tomorrow, next month, next year, next decade, etc.

What Sacks is teaching us through the story of Abraham, is that we need both vision and day-to-day action, and further, we need to understand which is which, and which is real at any given moment. We can emphasize maintaining a strong and clear vision, putting the actual work in, embracing uncertainty and obstacles, and be ready to receive blessing whenever it comes.