December 6, 2002
It came so fast that you needed to really pay attention to catch it. Fortunately, some sharp-eyed folks on the Fool's Cisco discussion board (free trial required) caught Cisco(Nasdaq: CSCO) CEO John Chambers' attempt at revisionist history at an analyst meeting held on Tuesday.
Well done, folks. Pay attention, because this is important to anyone who places executive credibility high on the list of characteristics to look for in a company.
In the meeting, Chambers refused to give revenue guidance on the upcoming year, but he did say he's now optimistic that things will get better. Then he said, "Two years ago, I was the pessimist of the industry. I was predicting a 100-year flood. Today, I'm the optimist."
To which I call "shenanigans!"
Chambers did nothing of the sort. In fact, almost exactly two years ago, he is quoted as standing by his aggressive 30% to 50% revenue growth targets for the company, even as its peers were quickly ratcheting back their own rates of growth. And the "100-year flood" line came as part of the rationale that Cisco used in 2001 in writing down more than $2 billion in inventory -- inventory that, supposedly, would not have been stockpiled at nearly the same degree had Chambers truly been a pessimist.
There was no prediction. It was an excuse for why Cisco hadn't seen the drop coming. I don't know if Chambers was quoting for his hagiographer or what, but his claims to have been a pessimist and to have predicted the flood aren't supported by facts.
[Read more about Cisco in Matt Richey's Cisco's Successful Strategy.]
Bill Mann holds shares of Cisco. The Motley Fool has a disclosure policy.