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Cisco’s CEO Predicts 40% of Companies Will Die

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In a recent address to Cisco customers, CEO John Chambers predicted that more than two-thirds of companies currently in existence will not remain viable within the next 10 years.

Jonathan Berr, in his “CBS Money­Watch” article, stated, “According to Chambers, who’ll step down this summer after serving 20 years as CEO, companies face a stark choice of either changing with the times or have change foisted on them that they may not like. Firms need to focus on operational rigor, simplicity and developing the right culture.”

This statement also succinctly sums up the state of business in the federal contracting market. In 2000, the federal contracting spending was at $220 billion. The aggressive spending pattern started and finally topped out at $550 billion in 2010, with a steady decline to $462 billion in 2014.

That being said, the federal market remains as the world’s largest customer — buying more services and products than any other entity in the world.

The last few years have been game-changers for contractors of all sizes, from the large corporations like Lockheed Martin and Northrop Grumman to the small five- and 10-person businesses serving both the Department of Defense and civilian agencies.

While the acquisition strategy of lowest-price-technically-acceptable (LPTA) has been a strong deterrent for vendors at some agencies, the overall tighter budgets and “do more with less” mentality has forced the changes in every program, including cyber, health, defense and intelligence.

This affects every stage of federal contracting, from updating a market strategy, through business development, capture and the Request for Proposal response process.

TargetGov recently completed a study during a three-year period that found more than 70% of small businesses registered in the government’s System for Award Management (SAM) database (www.sam.gov) and the related SBA Profile (www.dsbs.sba.gov) have poorly completed registrations. This foundational deficiency in basic business registrations critically hampers small business success in the competitive federal market.

Every business seeking to tackle, or be more successful in, the federal marketplace would be well served to at the least check current business registrations in the above federally-owned databases to confirm accuracy and completeness. There is no cost to do so, and accurate and complete contractor data enable federal decision-makers to identify viable vendors for purchase of services and products.

Circling back to Berr’s article, he stated “… Chambers’ statement may be a wake-up call for both the private and public sector, because the technological changes he’s speaking of have ramifications for both areas. Businesses, though, need to address the changes sooner rather than later, experts say.”

One such expert is Sydney Finkelstein, faculty director at the Center for Leadership at Dartmouth’s Tuck School of Business, who told “CBS MoneyWatch” (in the same article), “You can’t hope that what you did last week or last year is going to work. You have to be willing to throw out everything and start over. It turns out to be an unbelievably difficult thing to do.”

Gloria Larkin is president of TargetGov in Linthicum. She can be contacted via www.targetgov.com and 866-579-1346.