Get Used To Economic Swings, Cisco CEO AdvisesGet Used To Economic Swings, Cisco CEO Advises

Not sure what to make of today's economy? Get used to it, says John Chambers, president and CEO at Cisco Systems.

In a keynote speech to financial services execs at the Securities Industry Association's Technology Management Conference and Exhibit, the head of the networking company said Tuesday that the Internet has created an economy that will continually fluctuate to extremes. "There will be higher peaks and lower valleys and faster cycles," Chambers said.

In order to cope with the speed of change, companies during the next five years will need to develop strategies to keep resources at consistent usage levels despite the ups and downs. That means avoiding heavy layoffs and excessive hirings during economic swings, which Chambers said can be done by relying on outsourced services when the need for extra resources arises in good times. It also means developing stronger relationships and sharing resources with partners and suppliers to ensure that all business associates are equally prepared to increase productions when necessary and scale back when the economy slides, he added.

Key to that will be Web-centric business models that use Internet applications beyond today's productivity and profitability functions to focus on actually creating revenue. "There won't be any end to the wave of these applications," Chambers said. "I'm optimistic because we will be revising every aspect of how we do our jobs and the value we bring to the customer."