Cisco CEO Chuck Robbins talks politics as the new chair of the Business Roundtable

During the interview, which took place at the CEO Initiative dinner, Murray and Robbins discussed the state of stakeholder capitalism, how much influence the Business Roundtable yields, and whether or not American industries should receive government subsidies. Murray also tried to prompt Robbins to reveal which “presidential candidate gets you closer to what you want?”

Co-host Michal Lev-Ram joins Murray for the pre-interview conversation.

Listen to the episode or read the transcript below.

Transcript

This transcript has been edited for clarity.

Alan Murray: Leadership Next is powered by the folks at Deloitte who, like me, are exploring the changing rules of business leadership and how CEOs are navigating this change.

Welcome to Leadership Next, the podcast about the changing rules of business leadership. And Michal, missed you again on this one. We got to stop splitting like this. You know what we needed? We needed you in New York for this interview.

Michal Lev-Ram: Well, I was at a dinner in San Francisco at the same time, but we need the stars to align at some point and to be in the same city on the same day, Alan. That’s the ticket here. But tell me about the conversation. You got to interview Chuck Robbins, the chair and CEO of Cisco, and you’ve interviewed him plenty of times before, but what was what was different about this one?

Murray: Well, as you know, Michal, we’ve been doing this podcast for four years now. This is the first time, the first time we’ve had a repeat guest. Chuck Robbins had been on before to talk about the work he’s doing at Cisco. But at the CEO Initiative dinner in New York, I said, “Look, we’re not going to talk about that. What I want to talk about is your new role as chairman of the Business Roundtable, because it’s an incredibly interesting position to be in at a time when politics is as fraught is as it is.” The Business Roundtable is the business community’s main point of contact with the politicians in Washington. It’s a big business lobbying organization. And he just took over the lead.

Lev-Ram: So Alan, were you able to talk to him about the upcoming election and how he sees the Business Roundtable interacting, working with the next president, whoever that is?

Murray: Oh, I certainly did. I did my best on that. Look, you know, you’re dealing with two candidates who have both been in office before, and the Business Roundtable has had to work with both of them. So I asked him straight out which one did he prefer.

Lev-Ram: Well, and on a much lighter note, I understand you’re both Tar Heels. So did you get to bond over that a bit?

Murray: Oh, absolutely. We did. The difference between him and me, though, is I just went and watched the games. He played as a freshman. He played for Coach Roy Williams who tried to get him to stay. He told a funny story about that. I won’t spoil the punchline but it’s in the interview.

Lev-Ram: Well, with that, go Heels and let’s dive into the story.

Murray: First of all, thank you all again for coming. Chuck, thank you for being part of the conversation. Great to have you here. You’ve had an amazing run as CEO of Cisco. You’ve doubled the stock price. You’ve changed the business model towards recurring revenue. But that’s not what I want to talk about today.

Chuck Robbins: I know what you want to talk about.

Murray: Yeah, you have another job as chair of the Business Roundtable, and I’d really love to focus on some of the issues you’re dealing with. But the first question I want to ask you is every CEO I talked to, probably every CEO in this room, says to me these days, I don’t want to have anything to do with politics. Keep me away from politics. Keep me as far from Washington as you possibly can. And you dove in head first.

Robbins: I’m an idiot. I joke with everybody, I said, “There must be eight or nine people who said no to this job before I said yes.” I actually shared that with the Speaker of the House, Mike Johnson, and he said, “Well, there are 15 before me.”

Murray: That’s true. That’s true. But why did you do it?

Robbins: Look, it’s important and it matters. And I am, I’m like a senior citizen in the CEO ranks these days. You know, I feel like I just started, but somehow I’m like…

Murray: Nine years is a long time.

Robbins: It is a long time. And we need to have a voice and we need to try to continue to drive pragmatism into the otherwise crazy world that we all live in right now. And I’m game to give it a try.

Murray: But I would argue, having watched this for four decades, much of the time in Washington, I would argue that the BRT has less influence today than it probably had at any time in those four decades.

Robbins: I think on the surface you could make that argument. I think behind the scenes it may not be as true as you think. You know, all the public discussion isn’t necessarily what happens behind closed doors. I mean, people have to get elected and they have to do these things. And there have been lots of times over the years where people that we know, and my wife and I know, have called out bigwig CEOs on social media. And it’s sort of unfortunately the game that they have to play right now. But it is different. It’s different that in the past with Republican administrations, we typically would have a lot of progress and a lot of success, and we would have success with Democrat administrations as well. But right now it seems like both sides have issues with the business community. But at the end of the day, this is the greatest country in the world. The free markets and capitalism have been a big part of creating why this country is the greatest country in the world. Job creation, worker education, and I said this in one of my interviews after taking this job, the Business Roundtable is filled with patriots who want this country to win, and want this country to succeed, and want to help solve some of the problems in the country. And that’s why they stay engaged, and that’s why I’m engaged.

Murray: So, let’s talk about some of the specifics. You talked about free trade. Global open trade is what built many of the businesses in the Business Roundtable, including yours, an extraordinary period of freer and expanding trade. We now seem to have gone into reverse, with massive tariffs, threats of much greater tariffs, some of the things that Trump has said recently, 60% tariffs, even on products coming from Mexico, friendshoring. What’s the Business Roundtable position on that?

Robbins: We’re trying to continue to espouse the benefits of trade, responsible good trade agreements, and we think that they are good for the American economy. I said on an interview I did recently, these tariffs are passed on to the consumers. So they’re inflationary by nature. At the end of the day, if you build responsible, well-constructed trade agreements, they’re good for America, they’re good for jobs, they create jobs. If we build barriers to where U.S. multinationals can’t sell effectively overseas, then we’re not going to be investing as much as we are today in the United States. I mean, if I’m not selling effectively in other countries, when a high percentage of my R&D is happening in the United States, guess what? I’m going to cut my R&D.

Murray: And yet tariffs, restrictions on trade seem to be one of the few things that the two parties can agree on these days.

Robbins: Well, there’s truth to that.

Murray: Do you think you can have an effect?

Robbins: I think we’re going to continue to try to build the case.

Murray: And how do you feel about rising industrial policy? I mean, 20 years ago that was talked about in the same sentence as trade policy. You know, we don’t do that. We don’t subsidize industry. We just gave $20 billion to Intel today of taxpayer money. Is that a good thing? Is that something the Business Roundtable favors? Is that really different than trade restrictions?

Robbins: Well, I think there are certain areas in technology where we, as a country, need to be better positioned than we are today. I’ve had this conversation in Washington a lot, some of them are significant long-term investments that given the public markets’ activism, and all the things that we see sometimes, it’s very difficult to make those investments that aren’t going to pay off for years and years down the line. And sometimes there’s just new technology areas, new capabilities that we need to collectively do research and be prepared for and actually work on together. Around the world, there are other countries that are doing this already so that the U.S. companies are at a disadvantage when we go out to compete on a global basis. And so I think that there’s some of that that is needed in order to do that.

Murray: You’re okay with $20 billion for Intel of taxpayer money?

Robbins: Yeah, because I’d like for them to be a source of building…

Murray: …chips for you…

Robbins: …chips for you and for me.

Murray: Sure. Let’s talk about immigration, because that was really where you focused at the Business Roundtable before you took on this job. If trade is the top thing that you can get bipartisan agreement on, immigration may be next. It’s starting to move in the same direction. Where should we be on immigration? How much does it hurt companies like yours? And what hope do you have of getting to a sensible place?

Robbins: It’s a meaningful problem. And unfortunately, if you go back probably a year, there was significant alignment across both parties on this issue of immigration. Then politics get in the way and, you know, you get into the midterms and you can’t give anybody a win in the midterms. So then you get into the presidential election and we’ve seen what the politics have affected, just decisions around the border crisis and all those kinds of things. I don’t know if we’ll ever get broad based, maybe we have to break it up and do it in small parts. And, you know, God bless Tim Cook. He’s agreed to do another two years in the chair of the committee as I asked him to do that, because I did it for three years, I think, before he took it on. But we need high-skilled immigration. We need labor. We need, you know, hospitality labor. We need to deal with H-1Bs and spouses and families. We need to deal with DACA and Dreamers. And we do need more security at the border. That’s absolutely something everybody agrees on almost every bit of it, but politics get in the way.

Murray: So which presidential candidate get you closer to what you want? Does it make a difference here? [Audience laughter.] You knew I was going to…

Robbins: You’re a funny guy. You’re a funny guy.

Murray: …ask that question.

Robbins: Look, the reality is, is that we as CEOs and we as a Business Roundtable, we’re going to work with whoever is in the White House. It behooves us and it behooves our country for us to be supportive in trying to move forward pro-growth policies and America policies. And so the way we think about it is if we have a Trump administration or if we have a Biden administration, regardless, there are going to be things we can align on in both. I mean, you mentioned the CHIPS Act, right, that happened under a Biden administration. You probably wouldn’t have believed that would happen under a Biden administration six or eight years ago. So we can align.

Murray: Kind of like the tax policy of the Trump administration, too.

Robbins: We think that the tax policy prior to that put the United States multinational companies in a very competitive disadvantage on a global basis. So, we felt like…

Murray: So when you add up all the pluses and minuses, how does it balance?

[Quieter audience laughter.]

Robbins: We’re going to work with whoever’s in the White House.

Murray: So this group you’re talking to, the Fortune CEO Initiative, is a group that was started in 2017 and was started specifically as a response partly to some of the chaos that was going on in the political world, partly to some of the pressing problems that existed in the world, was really started to say, what can we do as businesses with our superpowers to address some of the big social problems that the world is facing? That’s why this group exists. It was a forerunner to what the Business Roundtable did in 2019. The redefinition of the purpose of the corporation, the whole stakeholder capitalism movement. We’ve now been through two years of pretty intense political pushback there. A lot of people in this room can testify to what some of that pushback has been. Where is stakeholder capitalism today, in your view?

Robbins: Well, I still think it’s important. What I struggle with is the following: If we create an environment that’s good for our employees, that’s a good thing. If we create an environment that creates healthy communities, that’s a good thing. If we also create an environment that has positive returns for our shareholders, positive outcomes for our customers, positive outcomes for our partners, what’s bad about that? I just don’t understand. No, I think the question of how you go about it is what’s being challenged, and the question of quotas and things of that nature, I think are legitimate discussions to have. But focusing on ensuring that, I mean our purpose statement as a company is to power an inclusive future for all. And we live it, and we believe it, and we walk it and it’s through our technology where we connect people around the world who have never been connected before, and they find themselves with an opportunity to be educated, to actually receive certain types of health care to, and now after the pandemic, they can actually get jobs where they are and work from where they are. And then the community service stuff that we do, we think, why would we not want a healthy community?

Murray: But you’re at the top of the heap. I mean, you by the way, I should have said at the outset, Cisco year after year is number one or number two on our list of best companies to work for. Consistently. So you focus a lot on your employees and obviously on your customers. And when you look at the Business Roundtable or the broader business community, do you see companies backing off those kinds of commitments because of the political pressure?

Robbins: No, I think what you see is, let me give you an example. When when we started focusing on gender diversity, what we did is, we just wanted to make sure we had a slate of candidates that was representative of the population. And then we wanted to have interview panels that were representative of the population. And then the best candidate has to win, right? And we never said like, well, we got to get to 35% of something. And I think that’s where the problem comes in because I actually believe, let’s say we’re focused on trying to increase our gender diversity at the leadership level, if you start letting numbers drive your decisions, it’s a disservice to the actual gender population. The people that you’re actually trying to help, it’s a disservice because people look and say, “Well, they all got in because there’s a 35% number you’re trying to hit.” And that’s just that doesn’t help. And so I think you have to go about this in a way that’s practical and that’s constructive, and I think that’s the key. And at Business Roundtable we’re actually trying to help our member companies just think through how to do that in a responsible way and still focus on doing the right thing.

[Music starts.]

Murray: Jason Girzadas, the CEO of Deloitte US, is the sponsor of this podcast and joins me today. Welcome, Jason.

Jason Girzadas: Thank you, Alan. It’s great to be here.

Murray: Jason, Leadership Next was created around this idea of stakeholder capitalism, but there’s clearly been political pushback to that idea. And there’s also economic pressure as the economy slows down. How do you serve all stakeholders? How do leaders balance the need to deliver profit and return on investment on the one hand, while also prioritizing the needs of these increasingly diverse stakeholders that they have to respond to?

Girzadas: Yeah, decision making in this environment is not easy, that’s for sure. The historic norms of simply looking at ROI from a financial lens is insufficient, quite honestly. What we’ve seen in some of what we’ve tried to do ourselves, is open up the aperture to recognize that there are actually multiple lenses that need to be utilized when evaluating significant decisions. How does a decision impact the workforce? How does it impact the societal stakeholders in whatever that decision may be? And so I think that a disciplined, multifaceted set of value drivers and value stakeholders will be increasingly a more common part of all decision making at board and executive levels. That discipline, Alan, will make it easier to actually be more cognizant and inclusive of the multiple stakeholders in making significant decisions. Now, that doesn’t mean that the financial returns and expectations become secondary. I just think they’re more balanced with the considerations with other stakeholder needs.

Murray: Jason, thanks for your perspective and thanks for sponsoring Leadership Next.

Girzadas: Thank you.

[Music ends.]

Murray: I want to ask you the question that we’re going to ask each of these tables to deal with over their main course, which is when you look at the rest of the year, rest of 2024, what do you see as the top risk and the top opportunity facing business?

Robbins: Wow.

Murray: You only get one. Actually, you can do more than one, but you might miss your point.

Robbins: I, look I don’t remember when we’ve had so many hot spots, right? I mean, there’s so much going on yet the world continues to be fairly resilient from an economic perspective. And I think part of it is because the leaders in this room and the leaders of the Business Roundtable, most of us have basically grown as executives during a constant time of crisis. It’s like you go back to the dot com crisis. So it’s been a long road. I mean, there’s always been something unbelievable going on. And I used to joke with our employees, I wake up every day and look at my phone to see what have I got to deal with that happened overnight. And I think that the resilience is incredible. However, you’ve got lots of issues going on. You’ve got 60 countries around the world greater than half the population voting. You’ve got a U.S. election that is going to be highly contentious. You’ve got U.S.-China geopolitical risk, you’ve got nationalism occurring all around the world and more nationalism happening where countries are trying to figure out can they count on the U.S.? Can they not count on the U.S.? And it’s creating all of our businesses, if you’re operating outside the United States, you’re feeling it where they’re saying, if you want to do business here, therefore you must do this. And it’s slightly different in every one, which by definition for them is inflationary because it costs us more to do things the way they want to do them. But they’re they’re more focused on their ability to sustain as a country. So I don’t think there’s just one.

Murray: But maybe I listen to you. You’re basically saying politics. And we are in an extraordinarily political and geopolitical…

Robbins: Yeah, I think that’s the case.

Murray: That’s the biggest risk.

Robbins: For sure.

Murray: How about the opportunity?

Robbins: The biggest opportunity I see is as and everybody gets excited, but we haven’t talked about, gee, AI. I mean, I haven’t had a conversation in this long without talking…

Murray: We went almost 19 minutes.

Robbins: Yeah, it’s never happened.

Murray: Awesome.

Robbins: The thing that makes me very optimistic is that all the technology that we have, all the things that are emerging, everything that we’ve done over the last, there’s so much negative noise about it and there’s so much risk associated with some of the stuff. But it really gives us an opportunity to go attack some of the biggest systemic problems in the world. And I think there’s a lot of people who believe that. And I think that’s why I’m optimistic. There’s a lot we can do.

Murray: Last question, actually, can I ask you two questions? Sure. The one I want you to talk about…

Robbins: He’s a fellow Tar Heel, so I’ve got to give him, you know…

[Audience member yells “woohoo.”]

Murray: Well, that’s one. Yeah, that’s question one. Probably most of you don’t know this, Chuck played basketball at the University of North Carolina.

Robbins: Freshman basketball.

Murray: He and Michaeli Jordan.

Robbins: Junior varsity basketball. Junior varsity.

Murray: Roy Williams tried to get you to keep playing.

Robbins: He did.

Murray: And you said, I’m going to go off and be CEO of Cisco.

Robbins: When I, after my freshman year, I had a really good freshman year and I was playing JV and practicing a fair amount with the Varsity. And I called Roy and said, I’m not going to play anymore. And he’s like, You are going to regret this one day. And so then I became CEO of Cisco, and the next time I saw him, he said, I guess everything worked out okay. We still joked, I’ll see him at every game. I guess you saw him there when we were. We went to the game together.

Murray: Chuck had seats on the floor in the…

Robbins: This is recorded and being published everywhere. You don’t have to tell everything.

Murray: It’s on the record. They’re right there with you. I’m sure the camera catches you. You know, last question, because I do want to go back to that extraordinary performance on the hundred best places to work list. You’ve worked hard over the last nine years to create an extraordinary culture. Everybody in this room would like a culture like you have. What can you tell people here about how you did it?

Robbins: Wow. Well, I think when we, I think when I took over in the U.S., we were number 82 and I had to write a thesis for the board, a strategic thesis when I was competing for the job, and I actually wrote a line in there, I said, I want Cisco to be the best place to work in the world. It was just a throwaway. And then all of a sudden we were rated the best place to work in the world about five years in or six years in. We didn’t have a strategy. But then I thought and said, okay, what did we do? What do I think we did that actually…work and life is so blended. And I joke a lot about when I was growing up, my dad, I had a work dad and a home Dad. My dad would get up in the morning, he put on a suit and you could just see he would transform into work.

And then he’d come home and he’d get undressed and he’d become Dad again. And I know I don’t, and I think our employees, they don’t want you to be something you’re not. They don’t want me to be something I’m not, and I can’t be. And so I am super transparent. I’ve told our employees, I’ll answer any question you ask me if it doesn’t put me in jail or put the company at risk. If it puts one of my leadership team in jail, we’ll talk about it.

But we communicate so frequently. We do it once a month. We do an entire employee video call once a month. During the pandemic we were doing them once a week. And we’re just honest, authentic. And I mean, you know, you can imagine the questions we’ve taken over the years about the stuff going on in the world and the desire for CEOs to have active voices on social issues and all these things. If you’d ever told me I’d be writing an email to the company on Roe v. Wade? I’m like, you’ve got to be crazy. I wrote an email on Roe v. Wade, and, you know, everybody doesn’t agree, but we’re just we’re just super honest and we communicate frequently, authentically, honestly.

Murray: And you hold people accountable.

Robbins: And we do hold people accountable. When I took over, everybody said Cisco’s a family as well. That’s great. In my family, I’m accountable. My kids are accountable. I’m always accountable. If I screw up, I guarantee you I’m accountable. You can be a family, but you still have to be accountable. It doesn’t mean you don’t have hard decisions you have to make. And so we’ve gotten into a little bit of the family thing, which is great. We were able to preserve the family thing but build accountability and competitiveness.

And the other thing I’d say we did is, I bet all of your organizations are filled with people who actually love doing things in their communities and making their communities better. They do. That’s just human nature. It’s been clear to me, 80 to 90% of our employees want to do something in the community, and we just empowered them to do it and we made it okay for them to do it. And we tell them go. We give them time to go volunteer. I tell them openly, if it’s three in the afternoon and your child has a soccer game, you better be at the soccer game because I’m sure at 9:00 at night you’re going to be responding to those emails that you missed. That’s just the way it works. And so, I think it’s just it’s really just, you know, treat all your employees the way you want to be treated. Even when we have to make the tough, hard decisions, like we just we just had a 5% reduction.

Murray: Yeah.

Robbins: But the way you do it and the way you treat them, they remember—even in the toughest times.

Murray: Yeah. Thank you for that. That’s, that’s in fact, I think that deserves a round of applause.

Robbins: Thank you

Murray: Leadership Next is edited by Nicole Vergara.

Michal Lev-Ram: Our executive producer is Chris Joslin.

Murray: Our theme is by Jason Snell.

Lev-Ram: Leadership Next is a production of Fortune Media.

Murray: Leadership Next episodes are produced by Fortune’s editorial team. The views and opinions expressed by podcast speakers and guests are solely their own and do not reflect the opinions of Deloitte or its personnel. Nor does Deloitte advocate or endorse any individuals or entities featured on the episodes.