WEBVTT - Cisco's Climate Change Commitments

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<v Speaker 1>This is Bloomberg Business Week with Carol Masser and Bloomberg

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<v Speaker 1>Quick Takes Tim Stinovich from Bloomberg Radio. Cisco Systems they

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<v Speaker 1>set their first greenhouse emissions reduction goal back in two

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<v Speaker 1>thousand six. Since then, the tech giant has continue to

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<v Speaker 1>grow its sustainability initiatives and impact year after year after year.

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<v Speaker 1>Earlier this month, the company announcing a new commitment to

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<v Speaker 1>achieve net zero emissions by twenty and more. Friend Katsudas

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<v Speaker 1>is a longtime Cisco Exact executive vice president and Chief People,

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<v Speaker 1>Policy and Purpose Officer, and she joins Tim and me

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<v Speaker 1>in our Bloomberg Interactive Broker studio. So good to see

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<v Speaker 1>you again. Nice to see you too. Thank you. I

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<v Speaker 1>feel like I do have a million questions for you,

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<v Speaker 1>but we'll get as much as we can get in.

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<v Speaker 1>First of all, before we get into sustainability, I do

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<v Speaker 1>want to ask you about the visibility you see when

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<v Speaker 1>it comes to your business and the company and hiring.

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<v Speaker 1>What does it look like right now? And we're coming

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<v Speaker 1>off a FED meeting, we feel like we get a

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<v Speaker 1>little bit more clarity. The markets certainly read it that way.

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<v Speaker 1>What do you guys see so we see a tremendous

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<v Speaker 1>amount of opertun unity. What's so fascinating is, throughout the pandemic,

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<v Speaker 1>we saw so many of our customers wanting to move

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<v Speaker 1>a little bit more quickly. From a transformation perspective, we

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<v Speaker 1>saw that the issues they had been thinking about, they

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<v Speaker 1>were ready to move. So what that means for us

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<v Speaker 1>is we see a lot of investment in how they

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<v Speaker 1>securely connect their thinking about having employees both on site

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<v Speaker 1>but also working from home, and that's a different technology play.

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<v Speaker 1>From a people perspective, this has been one of the

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<v Speaker 1>most remarkable times. Right now. People are talking about this

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<v Speaker 1>period as the Great Resignation, and what they mean by

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<v Speaker 1>that is we see a tremendous amount of people movement

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<v Speaker 1>as well. Yeah, really important question when we think about

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<v Speaker 1>the way that people are changing jobs, the way that

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<v Speaker 1>people are potentially leaving the workforce. I want to go

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<v Speaker 1>back to something you said about the transformation that you

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<v Speaker 1>saw throughout the pandemic. Do you see this as a

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<v Speaker 1>permanent shift with a lot of your customers that their

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<v Speaker 1>employees could be working from home forever. I think a

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<v Speaker 1>lot of our customers are figuring that out, So I

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<v Speaker 1>would say that there's a subset of our customers that

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<v Speaker 1>absolutely have found greater productivity, they see better employee engagement,

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<v Speaker 1>and they're going to continue to work hybrid. I don't

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<v Speaker 1>see as many absolutes where people are either going to

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<v Speaker 1>be all in the office or at home. I think

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<v Speaker 1>they're figuring out the balance. And then there's a subset

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<v Speaker 1>of our customers that want to go back, and that's

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<v Speaker 1>something that we really questioned around can we go back?

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<v Speaker 1>And the reason I put that forward is that employees

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<v Speaker 1>around the globe are telling us that they want to

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<v Speaker 1>work in a very different way. I mean, the horses

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<v Speaker 1>left the barn right when it comes to hybrid work,

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<v Speaker 1>I think it's safe to say that there's probably been

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<v Speaker 1>tons of focus groups pre pandemic. Can it work? And

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<v Speaker 1>it not? Maybe we're not ready. I mean the pandemic,

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<v Speaker 1>we had no choice and it worked. Yeah. That's why

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<v Speaker 1>we refer to this last period as not only challenging

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<v Speaker 1>from a human perspective, but an experiment around work where

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<v Speaker 1>we've learned a lot. And I think for some companies

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<v Speaker 1>this question that they had has now been answered and

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<v Speaker 1>that they can work, they can innovate, they can collaborate,

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<v Speaker 1>and in some cases they can be even better with

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<v Speaker 1>this hybrid because they can get to talent that in

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<v Speaker 1>the past they couldn't before. Well, how has the talent

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<v Speaker 1>acquisition process been? How has talent retention been at Cisco Systems.

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<v Speaker 1>You said that some people are referring to this as

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<v Speaker 1>the great resignation. We hear about the labor struggle that

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<v Speaker 1>employers are facing right now. Um, tell us what it's

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<v Speaker 1>been like for you and FED Chief J. Powell talking

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<v Speaker 1>about it's a really tight labor force. It is, so

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<v Speaker 1>we experienced that as well. What was so fascinating was

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<v Speaker 1>when when we first went into the pandemic, we paused

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<v Speaker 1>for a few weeks just from a hiring perspective, and

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<v Speaker 1>we were just kind of getting our legs under us

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<v Speaker 1>and understanding what this was going to be. And then

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<v Speaker 1>we had this realization that we were in this for

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<v Speaker 1>quite some time, and we started the hiring process, and

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<v Speaker 1>what we found was leveraging video, leveraging the interview processes

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<v Speaker 1>that we have, we hired like never before. And in fact,

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<v Speaker 1>I would tell you that last year was probably one

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<v Speaker 1>of the biggest hiring years that we've had as a

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<v Speaker 1>company azing and so many employees have never met any

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<v Speaker 1>of their colleagues face to face. It's a position I

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<v Speaker 1>then I start in October last year here, yeah, exactly,

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<v Speaker 1>and there's people that he's now meeting. Is like I've

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<v Speaker 1>been talking to you, you know, via remote, and now

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<v Speaker 1>I'm finally meeting you. It's it's a very different world. Yeah.

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<v Speaker 1>I had a really funny experience last week where two

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<v Speaker 1>colleagues were meeting. I happened to be there and one

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<v Speaker 1>of the colleagues that we're friends though, even though I'm

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<v Speaker 1>meeting you for the first time. And so what I

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<v Speaker 1>would say is for all companies, we do see that

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<v Speaker 1>there is a reduced labor pool. We're working incredibly hard

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<v Speaker 1>to differentiate ourselves, to talk about what we stand for,

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<v Speaker 1>and to attract the talent that really wants to be

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<v Speaker 1>with us as well. We've got about forty seconds. Then

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<v Speaker 1>we'll come back and talk more. Do you have to

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<v Speaker 1>pay up more? You do, because whenever you have a

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<v Speaker 1>market where there's a tremendous amount of movement, employees are

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<v Speaker 1>going to an opportunity and they expect at least a

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<v Speaker 1>three five percent increase. Okay, is that what you've done

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<v Speaker 1>three or if you had to go even higher We've

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<v Speaker 1>heard stories about, you know, double digit increases for salaries.

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<v Speaker 1>It varies based on the market, but yes, it's a

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<v Speaker 1>huge challenge right now for many companies to expect it

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<v Speaker 1>to continue. I just tight for a while. I int

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<v Speaker 1>next year. Yes, I love her. All right, We're gonna

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<v Speaker 1>continue with Frank cassudas over at Cisco Systems. You're listening

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<v Speaker 1>to Bloomberg Business Week and this is Bloomberg Radio. We

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<v Speaker 1>are here with Frank Cassuda. She's executive vice president, chief People,

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<v Speaker 1>Policy and Purpose Officer at Cisco Systems here in New York,

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<v Speaker 1>normally based on the West Coast, but you were reminding

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<v Speaker 1>us that Cisco get a pretty big presence here in

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<v Speaker 1>the UH here. Yes, in the United States, in New

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<v Speaker 1>York specifically, we do. It's such an important market for us,

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<v Speaker 1>so so many of our customers are based here. It's

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<v Speaker 1>a great place for talent, a lot of the technology

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<v Speaker 1>as well. We're actually in the process at the moment

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<v Speaker 1>of remodeling our presence here in New York, and big

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<v Speaker 1>part of that is hybrid work, and so we're thinking

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<v Speaker 1>a lot about when you come into the office, how

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<v Speaker 1>will you work? And so I think you'll see our

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<v Speaker 1>presence in New York look very different from what it's

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<v Speaker 1>been in the past. What do you mean by that?

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<v Speaker 1>How how is it going to be different? So the

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<v Speaker 1>biggest differences fewer people will come into the office to

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<v Speaker 1>work on email or to be in video call. So

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<v Speaker 1>when you come in now, you're coming in to be

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<v Speaker 1>with your team, You're coming in to be with customers.

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<v Speaker 1>And so the site has to be so much more

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<v Speaker 1>team centric than ever before. And so you're going to

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<v Speaker 1>see a lot fewer of the cubes and the individual

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<v Speaker 1>offices and a lot of huddle space. So physical changes absolutely.

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<v Speaker 1>Do you need A big question that Fran we've been

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<v Speaker 1>talking a lot about is what is the use of

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<v Speaker 1>commercial real estate going for? You still need to have

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<v Speaker 1>space though, or do you need less? I think it's both.

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<v Speaker 1>So I think that all companies right now are assessing

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<v Speaker 1>how they're going to work, how much space they need.

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<v Speaker 1>What we're finding is there's a lot of investment in

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<v Speaker 1>spaces now, either for safety reasons or an expectation of

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<v Speaker 1>people coming back and really wanting to just upgrade the

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<v Speaker 1>space as well. How are you thinking about your presence

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<v Speaker 1>in New York in the future in terms of headcount. Yeah,

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<v Speaker 1>I would say it's uh it's a really important growth

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<v Speaker 1>area for us, and so we look at about five

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<v Speaker 1>key areas across the US. New York is one of them,

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<v Speaker 1>and so we will continue to to hire and really

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<v Speaker 1>attract and recruit the best. You talked about it being

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<v Speaker 1>a tight labor market. What's the New York labor market

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<v Speaker 1>right now for the type of workers you're looking for.

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<v Speaker 1>It just got about fifteen seconds. It's incredibly competitive, and

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<v Speaker 1>uh so this is a place where the wonderful thing

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<v Speaker 1>is you see the skills that we're looking for, but

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<v Speaker 1>you see that the talent has a lot of different options.

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<v Speaker 1>We're still here with brand Kasudas, she's executive vice president,

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<v Speaker 1>Chief People, Policy and Purpose Officer at Cisco Systems here

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<v Speaker 1>in our interactive broker studio. So talk to us about

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<v Speaker 1>the new commitments. Earlier this month, you guys laid it

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<v Speaker 1>out planning to achieve net zero emissions by achieve carbon

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<v Speaker 1>neutrality for Scope one and Scope to UM and that

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<v Speaker 1>I believe is by so go into it because you

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<v Speaker 1>guys have been doing this for a long time. What's

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<v Speaker 1>the difference. What's the new new stuff that we need

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<v Speaker 1>to know about? Yeah, so I would say we have

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<v Speaker 1>been doing this for a long time. And here's the

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<v Speaker 1>most important part for companies to achieve these goals, which

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<v Speaker 1>are really big and even bigger if you're a hardware

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<v Speaker 1>and software company. Uh, it takes every part of the

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<v Speaker 1>organization to be focused here and it has to feel

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<v Speaker 1>like a key part of run in your business and

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<v Speaker 1>not something that sits on the side. Because these goals

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<v Speaker 1>are pretty significant. And so we've been doing this for

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<v Speaker 1>a long time. The four big areas that we're focused

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<v Speaker 1>on right now. The first is hybrid work. As we

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<v Speaker 1>talked about, We believe that will be incredibly positive for us.

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<v Speaker 1>The second thing that we're doing is really focused on

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<v Speaker 1>the reduction of carbon emissions, and uh, we're investing in

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<v Speaker 1>technologies that I think will give us all optimism. Uh.

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<v Speaker 1>There's a company that we invested in called Rama. They

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<v Speaker 1>actually won a prize with us, and they're doing carbon

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<v Speaker 1>capture for large semi trucks and that is so important.

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<v Speaker 1>The third area that we're focused on is all about

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<v Speaker 1>renewables and so, as an example in the US were

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<v Speaker 1>renewable electricity several countries across Europe as well. And we'll

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<v Speaker 1>just keep on pushing, and then I think another element,

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<v Speaker 1>and this is the most exciting, is we're looking at

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<v Speaker 1>the way in which we're developing our products which really

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<v Speaker 1>power the Internet. And one of our new products, Silicon one,

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<v Speaker 1>is a chip set, and what it does is it

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<v Speaker 1>reduces the amount of energy that our customers use by

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<v Speaker 1>twenty six times. And in addition to that, it's much

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<v Speaker 1>smaller than previous products, so it doesn't take as much packaging.

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<v Speaker 1>And so when you have this type of breakthrough across

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<v Speaker 1>your portfolio, it's going to be incredibly meaningful. What is

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<v Speaker 1>the biggest challenge that you think you're going to face

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<v Speaker 1>when you try to achieve net zero emissions? Because you

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<v Speaker 1>know that's not that far away, So the biggest challenge.

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<v Speaker 1>And then there's people like me, I'm like, why can't

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<v Speaker 1>we do it sooner? Come on? Fran always like, that's well,

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<v Speaker 1>think about this. So what you're solving for with Scope three,

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<v Speaker 1>which our commitment is, is you're solving for the way

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<v Speaker 1>in which your customers are using your products. You through

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<v Speaker 1>the whole change and so you go through the entire

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<v Speaker 1>supply chain. And so the interesting thing is what we

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<v Speaker 1>control the Scope one and two and so that we're

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<v Speaker 1>doing is a much more challenging play because it's Scope

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<v Speaker 1>three and we have to look at everything do and

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<v Speaker 1>scope one. I had to learn a lot about this.

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<v Speaker 1>I had talked with Brand for a panel for you

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<v Speaker 1>here at Bloomberg. Scope one is direct greenhouse emissions that

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<v Speaker 1>are controlled by the company Cisco. Scope too is indirect

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<v Speaker 1>emissions from things like electricity generation of that steam heating cooling.

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<v Speaker 1>But you're right three is you're really pushing further out.

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<v Speaker 1>Every single thing that your company creates with your customers

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<v Speaker 1>is what you saw for and Scope three, how much

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<v Speaker 1>of that is in your control? So this is where

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<v Speaker 1>it gets complex, and this is where we're right. This

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<v Speaker 1>is why it's so wonderful right now that so many

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<v Speaker 1>companies are coming forward with commitments, because it's going to

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<v Speaker 1>take all of us to achieve this. We're going to

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<v Speaker 1>be so dependent on our supply chain, and so we've

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<v Speaker 1>been working with them for ten years. But there's a

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<v Speaker 1>lot of work that we need to do to get

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<v Speaker 1>there and to make it something that feels like it's

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<v Speaker 1>within our control. The only other thing that I would

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<v Speaker 1>add is there's also some some new I think um

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<v Speaker 1>baselines that are being established. We just signed the Race

0:10:55.240 --> 0:10:58.240
<v Speaker 1>to Zero. That's something that we're really proud of because,

0:10:58.280 --> 0:11:01.960
<v Speaker 1>as you know, that's a concern stint threshold, it's scientific.

0:11:02.280 --> 0:11:04.760
<v Speaker 1>We're doing that together as part of Global Citizen, with

0:11:04.920 --> 0:11:08.120
<v Speaker 1>many of our peers and industry, and it will have

0:11:08.200 --> 0:11:11.240
<v Speaker 1>tremendous impact as we move forward. I guess what's interesting too,

0:11:11.440 --> 0:11:16.160
<v Speaker 1>is I wonder about the conversation that's going on when

0:11:16.200 --> 0:11:18.400
<v Speaker 1>it comes to climate change. We heard a President Biden

0:11:18.440 --> 0:11:21.480
<v Speaker 1>talk about it other world leaders. Is the conversation the

0:11:21.559 --> 0:11:23.320
<v Speaker 1>right one, especially since you guys have been doing this

0:11:23.360 --> 0:11:26.600
<v Speaker 1>for a while. Our people taking it seriously, maybe more

0:11:26.600 --> 0:11:29.920
<v Speaker 1>seriously after the pandemic where we saw as the world shutdown,

0:11:30.080 --> 0:11:33.040
<v Speaker 1>skies were clearer like we saw the impact, but we've

0:11:33.080 --> 0:11:35.440
<v Speaker 1>also seen fires on the West Coast. We've seen what

0:11:35.520 --> 0:11:38.200
<v Speaker 1>climate change is doing to our world. I think the

0:11:38.280 --> 0:11:42.080
<v Speaker 1>conversation could be so much more opportunistic. I think if

0:11:42.160 --> 0:11:44.960
<v Speaker 1>we all look at some of the benefits from a

0:11:45.080 --> 0:11:49.120
<v Speaker 1>business and from a planet perspective in doing these things.

0:11:49.240 --> 0:11:53.040
<v Speaker 1>I mentioned one of our products. Our customers love that product.

0:11:53.320 --> 0:11:55.719
<v Speaker 1>It is one of the fastest out in the marketplace.

0:11:56.200 --> 0:11:58.400
<v Speaker 1>That's a win for us. And did your customers put

0:11:58.400 --> 0:12:00.800
<v Speaker 1>more pressure on you guys after the past year or

0:12:00.840 --> 0:12:02.280
<v Speaker 1>so or a couple of years when it comes to

0:12:02.280 --> 0:12:05.160
<v Speaker 1>climate change and saying yes, And I think that helps.

0:12:05.400 --> 0:12:07.880
<v Speaker 1>I think the more that our customers can share with

0:12:08.000 --> 0:12:10.360
<v Speaker 1>us what they're trying to achieve will work together. But

0:12:10.760 --> 0:12:13.760
<v Speaker 1>I think the conversation right now is so focused on

0:12:13.800 --> 0:12:16.080
<v Speaker 1>the downside as opposed to the opportunity, and if we

0:12:16.120 --> 0:12:18.480
<v Speaker 1>look at the business, I think we'll have a different

0:12:18.679 --> 0:12:20.600
<v Speaker 1>approach to it as well. We got a hot headline

0:12:20.600 --> 0:12:22.760
<v Speaker 1>coming in that I just wanted to break. The White

0:12:22.800 --> 0:12:26.640
<v Speaker 1>House is weighing invoking defense law to get chips supply data.

0:12:26.960 --> 0:12:30.080
<v Speaker 1>Gena Amando gives firms forty five day deadline for chips

0:12:30.080 --> 0:12:33.319
<v Speaker 1>supply details. The Commerce chief is concerned about chip bottlenecks

0:12:33.320 --> 0:12:36.160
<v Speaker 1>and stockpilot. So essentially, this is a Cold War era

0:12:36.320 --> 0:12:39.199
<v Speaker 1>national security law of force companies in the semi conductor

0:12:39.240 --> 0:12:42.840
<v Speaker 1>supply chain to provide information on inventory and sales of chips.

0:12:43.120 --> 0:12:47.240
<v Speaker 1>When you hear something like this, I mean we the

0:12:47.280 --> 0:12:49.719
<v Speaker 1>government is looking at supply chains, looking at things that

0:12:49.760 --> 0:12:52.800
<v Speaker 1>are crucial to our security. What do you think, Well,

0:12:52.840 --> 0:12:54.600
<v Speaker 1>I think it's something that we're all focused on at

0:12:54.640 --> 0:12:58.040
<v Speaker 1>the moment, the supply chain challenges, even talking about Nike

0:12:58.120 --> 0:13:00.640
<v Speaker 1>a little bit earlier to the chip element of it

0:13:00.679 --> 0:13:03.439
<v Speaker 1>as well, I think we're going to have to get creative.

0:13:03.760 --> 0:13:06.760
<v Speaker 1>We feel very fortunate Cisco. We have a great supply chain,

0:13:07.200 --> 0:13:09.040
<v Speaker 1>but I think all of us are trying to navigate

0:13:09.080 --> 0:13:10.800
<v Speaker 1>through this and do best by our customers. But it's

0:13:10.840 --> 0:13:13.840
<v Speaker 1>stressed right now, right it is absolutely give us an

0:13:13.840 --> 0:13:16.839
<v Speaker 1>example of how it's stressed, of how you're experiencing that

0:13:16.880 --> 0:13:20.640
<v Speaker 1>stress at Cisco Systems. So basically, like so many of

0:13:20.640 --> 0:13:24.240
<v Speaker 1>our customers and partners, when you can't get access to

0:13:24.480 --> 0:13:28.160
<v Speaker 1>a product or technology, we have greater lead times for

0:13:28.200 --> 0:13:31.079
<v Speaker 1>our customers. The nice thing right now is because we're

0:13:31.080 --> 0:13:33.240
<v Speaker 1>all in the same boat, I think our customers are

0:13:33.280 --> 0:13:37.640
<v Speaker 1>incredibly understanding. But these are important build outs and so

0:13:37.720 --> 0:13:41.120
<v Speaker 1>we are doing our best to prioritize to work with

0:13:41.160 --> 0:13:43.760
<v Speaker 1>them to ensure that we have the partnerships that gets

0:13:43.840 --> 0:13:46.280
<v Speaker 1>us access to products as quickly as we can. But

0:13:46.320 --> 0:13:47.960
<v Speaker 1>it's it's a challenge. One thing I want to just

0:13:48.080 --> 0:13:50.280
<v Speaker 1>end with Fran because I felt like when I talk

0:13:50.360 --> 0:13:53.959
<v Speaker 1>with your company's CFO and you about the conversations, I mean,

0:13:54.160 --> 0:13:58.079
<v Speaker 1>you are a senior executive there. They have put sustainability,

0:13:58.160 --> 0:14:04.359
<v Speaker 1>people policy purpose at a very high level at your company. Um, financially,

0:14:04.400 --> 0:14:07.280
<v Speaker 1>it makes sense for you guys to pursue all these initiatives.

0:14:07.960 --> 0:14:10.760
<v Speaker 1>You see that, you see the payoff it does. It's

0:14:10.800 --> 0:14:13.040
<v Speaker 1>a tremendous amount of work. I do think that the

0:14:13.080 --> 0:14:15.760
<v Speaker 1>magic is that this type of work has to be

0:14:15.800 --> 0:14:19.160
<v Speaker 1>both bottoms up and top down. And whenever we do

0:14:19.200 --> 0:14:21.720
<v Speaker 1>that at Cisco, we win. And so what that means

0:14:21.800 --> 0:14:24.800
<v Speaker 1>is the people that are closest to the supply chain,

0:14:24.840 --> 0:14:28.440
<v Speaker 1>the people that are closest to the travel policy, all

0:14:28.480 --> 0:14:32.080
<v Speaker 1>of us working together, and then our executives owning it

0:14:32.200 --> 0:14:35.800
<v Speaker 1>and holding us accountable and measuring is really the balance

0:14:35.840 --> 0:14:37.720
<v Speaker 1>and how we win. All Right, we gotta run. Thank

0:14:37.760 --> 0:14:39.320
<v Speaker 1>you so much, as we covered a lot of ground.

0:14:39.400 --> 0:14:42.560
<v Speaker 1>Really really appreciate it. You are listening to Bloomberg Business

0:14:42.600 --> 0:14:44.480
<v Speaker 1>Week and of course to our thanks to Franca Suda.

0:14:44.560 --> 0:14:47.760
<v Speaker 1>She's executive vice president, Chief People, Policy and Purpose Officer

0:14:47.840 --> 0:14:51.400
<v Speaker 1>here at Cisco Systems. Here in our interactive broker studio.

0:14:51.480 --> 0:14:54.320
<v Speaker 1>Not here at Cisco Systems. We're actually Bloomberg. It's been

0:14:54.360 --> 0:14:56.240
<v Speaker 1>a long day, it's been a long week. It's been

0:14:56.280 --> 0:15:01.880
<v Speaker 1>a long two years, right for its what it has.

0:15:02.560 --> 0:15:04.520
<v Speaker 1>I'm just thinking, like, we're still this is such a

0:15:04.520 --> 0:15:06.600
<v Speaker 1>big deal for her to be in person with us, right,

0:15:06.800 --> 0:15:08.600
<v Speaker 1>And actually I did do a panel with Brand a

0:15:08.600 --> 0:15:10.840
<v Speaker 1>while ago and it just virtually how they are doing it.

0:15:10.920 --> 0:15:13.400
<v Speaker 1>We did do it virtually. Yeah, but we're getting in person,

0:15:13.440 --> 0:15:15.280
<v Speaker 1>which is great for the whole Business Week team. Have

0:15:15.320 --> 0:15:16.800
<v Speaker 1>a great evening. This is Bloomberg