shery: first word headlines. if cutting bot bonuses income fails to grow. variable compensation is one of several areas the bank has earmarked for possible savings if it is to achieve profit targets. it has seen eight consecutive quarters of falling revenue and resisting a government drive to merge with another bank. political uncertainty has pushed home prices in london's most desirable area to six-year lows. prices, including chelsea, kensington, fell 5% last year amid the ongoing brexit argument. high-end house prices

has been hit by tax reforms, lifting it to as much as 50% of the purchase price. super bowl and spending -- ad spending fell more than 6%, probably concerns the game's popularity may have peaked. million, down382 from the $408 million nbc saw last year and below fox's $419 million in 2017. the viewing audience came in at 100.7 million, down from last year and the lowest total since 2009. take a look at what the asx 100 is doing at the moment. after 30 minutes of trade, gaining ground. 1.5% for the second consecutive session. financials and materials leading the gains after the release of yesterday's royal commission report. take a look at financials right now, while gaining ground.

the sector gaining more than 3% at the moment. way toally giving the the financial industry which has dodged a forced breakup. plenty more to come. this is bloomberg. ♪ ♪ emily: he is one of the longest running ceo's in tech history. hailing from the underdog state of west virginia, john chambers got his start at ibm before landing a job at cisco in the early 1990's. he became ceo in 1995, five years before the tech industry went bust. chambers led tech's bellwether out of the devastation. ultimately growing cisco's revenue from $70 million when he joined to $47 billion when he stepped down in 2015. he is now focusing on finding the next cisco, investing in a raft of start-ups that he believes are the secret to

keeping america great. joining me today on "bloomberg studio 1.0," former cisco ceo and chair john chambers. now founder of jc2 ventures. thank you for joining us. john: emily, it is a pleasure to be on your show again. emily: i want to start in the middle when you joined cisco. as i understand it, your first day on the job, they put you in a telephone closet. you were not a nobody. like, you'd had a 15-year career, but is that true? john: it is true. i came out from the east coast, and i had an east coast mentality. i was a prior ibm-er. and a company called wang laboratories with 32,000 people. i came to silicon valley and i had always heard it was unusual, but the first day, our company was growing so rapidly. i joined when there were 400 people. they had no space. and so they put me in a telephone switching closet. i immediately thought about, should i give my wife a call and say, elaine, i'm coming back to boston?

and then there was a problem with a customer, and i jumped into it and went downstairs to find our customer support team, and there was none. so i knew what the problem was, and i was off to the races. i knew the difference i could make. loved the valley, look how fast we moved, but it was a cultural adjustment. emily: i want to talk about where that guy came from. the guy who was willing to sit in the telephone closet. and you were raised in west virginia. tell me about your upbringing. john: i was raised by two doctors. and they were in med school at the time that i came along. i might have been a surprise because that's not necessarily because that's not necessarily the logical time when you have a child. they both were amazing. my dad taught me about vision and strategy. he could see five and 10 years out. he talked to me about how to do it, which was unusual for a doctor. usually they're not good business leaders. mom was internal medicine and psychiatry. she taught me the emotional side. and they are two of my idols in

life. emily: you've been very open about growing up dyslexic. how much of a struggle was that for you? john: it was a big struggle. because this was at a time dyslexia was not understood. for those of you who are dyslexic or have family members, you actually read backwards. you invert letters. you can make the same wrong turn driving again and again and again. to answer your question have it -- how it makes me feel, my hands are sweet talking about it. i probably never would have disclosed it except on a take your children to workday 20 years ago, a young girl came up and tried to ask a question in front of 500 of her him and peers, and she couldn't get it out. she had written it down. she started to cry and leave. i came off the stage and said now, just ask the question, and she said she was dyslexic. i said i was too. we sat down on the floor and i walked her through how you get the question how the like you're talking to somebody. went back on stage, i remember i had a lovelier microphone, not a dynamic, and announced to the world i was dyslexic.

contrary to what i thought, a lot of people said we appreciate the openness, but a lot of people said, i am too or can you help my child understand this? so dyslexics don't think serially. they go a, b, z. if you learn how to use that to a strength, you can suddenly picture things in a way that other people cannot. emily: how does it impact you as a ceo? john: you live with it. but once you understand your strengths and limitations are, everybody has this in life. you play to your strengths and you deal with your limitations, but you can also decide how far you take that weakness and make it a strength. for me, i like to go a, b, c, so i get operational people around me so i can connect to the dots quickly and see a trend in the market, a chance to, instead of selling routers, set up the internet and change the world. i get that. emily: you ended up the coming ceo of cisco. you joined in 1991, by 1995, you were in the top job. how did that happen? john: well, they promised me the top job in two years. it took four. emily: yet they still put you in the telephone closet. john: the culture.

if you don't fit into a very relaxed, fast-moving pace in silicon valley, you're going to struggle. i believe that we are all equal in life and my office should not be nicer than the executives. that's what we always did. we put employees around the windows before it was popular. and we created a culture that there was no reserved parking including for the ceo. it's rare you get to take a company from 400 people to 75,000, from $70 million in sales to $47 billion and change the world at the same time in terms of how the internet made a difference and all our lives. emily: five years into your tenure, the dot-com bubble burst. did your bubble burst in that moment? john: when i saw wang fall from grace and 32,000 people lose their job, and i watched what happened at ibm, where it should have been the leader in the world forever, and yet it fell for almost 20 years. it has just slightly improved since then. i knew transitions happen. and i had been told that

leadership was lonely, but it was about as lonely as it gets in 2001. emily: how so? john: people who had been very complimentary, some of them turned. to me, you are consistent in your behavior and life. something changes, you don't turn on the person you said good things to. there were tough comments made, but that is part of leadership. if you can't take constructive criticism, you can't lead. especially in today's world, but the major thing is, and this is what we did again and again at cisco, i developed an approach to how you deal with transitions or opportunities. we acquired 180 companies. our playbook was the best in the industry. when you get knocked down, you determine how much was self-inflicted, how much is market, you think how long it will last, which is usually longer than you think. it will probably be deeper than you think. then you share with everyone what you are going to look like when you recover. here is what you will do to get there, and then here is how you should measure success. you share that with your

shareholders, employees, customers. emily: when you were down, did you lay out a strategy about how to lead the company out of it? did you just figure it out along the way? john: no, actually our business, if you can imagine, grew at 70% the first week of december in 2000. there was no indication of problems. and by the third week in january, it was minus 30%. i mean, 25% of my customers disappeared. didn't stop ordering, disappeared. and when i saw that number, i went on a plane and toured the world for about two weeks. and i decided this is a 100-year flood, and i used that word, and i said we will adjust appropriately and very quickly, and we made all our changes in 51 days. i painted a picture of what we would look like when we came out of it. we tried to do the best to take care of employees who were laid off. we were out of that and gaining market share at the time when most of my peers didn't even begin to change. and most of them were left behind. many of them disappeared.

emily: you went on to run cisco for 24 years. john: yes. emily: biggest regret? john: i did not see 2001 coming. i am usually really good at connecting the dots. and we did see the big recession in 2008 coming, so i learned from it, and in the middle of 2007 i said there's something wrong, emily, in the financial market. our numbers were fine, we are above the quarter again, the next quarter was shaping up nicely. but all of a sudden the big banks in the u.s. slowed their ordering. my numbers are fine, but i learned not to just trust numbers. i called the ceo's and they said not a big issue. we're just slowing a little bit. i have seen that pattern. i said we have a problem coming at us. the stock went down, of course. and by mid-2008, we were in the biggest recession we've seen. but this time we were ready. we powered right through it. emily: you left after 24 years. why not make it an even 25? john: so most ceo's don't survive more than five or six years. emily: you must be one of the longest running ever. john: it was a lot of fun.

but it was the rush to know when you have to change. my last 10 years, i knew i wanted to -- for my family, i wanted to make a smooth transition. i said i will re-up for five years and then suddenly i said i'm re-upping for two to four. everyone knew what that meant. it was time for me to move into my next chapter. i wanted to get my family in good shape to make it through the next transition. three years to the day was the date we announced i would move to executive chairman and make for a smooth transition. ♪ emily: is silicon valley too arrogant for its own good? john: yes. ♪

emily: there was a time when cisco was one of the top tech companies getting all the glory. was it hard to watch amazon and google and facebook and apple become that? john: not at all. my dad taught me that you always take pride in your peers'

success. and it's so important the industry does well. emily: that's awfully benevolent. john: no, it is just practical. i believe you don't win by yourself, you win as a team. why should you ever object to somebody else being successful? also i'm getting another chance to do the next cisco with these start-ups. so i always enjoyed it when my peers were successful. not my competitors, but my peers. emily: the ground is shifting beneath facebook and google and apple and amazon. what is your take on the controversy about how facebook was slow to act when it comes to election meddling and fake news, and how management was asleep at the wheel? john: one of the things for your audience watching this, and you have asked me a really tough question, so i am going to first avoid it and tweak it a little bit. i am not agreeing that management was asleep at the wheel. i'm a big fan of cheryl sandberg and believe in gender diversity.

i was the first ceo to ask her to speak to my leadership team of 3000 people and required everybody to read the book. emily: i remember that. i remember when she spoke to cisco. john: i said cheryl, you are too tough on the women. for us men, we have to lean in, we're not doing our job. emily: do you think she is too tough on women? john: i think her book was a little bit too tough on women. but no, she was making a point. she was saying we have to control our destiny and lean in. when you are breaking out of a challenge, you have got to be able to do it by making bold statements. emily: as much as i have benefited from lean in and the message of lean in, you can't lean in if the door is nailed shut, and don't companies need to lean in more, too? john: yes, they do. and using cisco's example when i was there, we had 30% of our board female before anybody even started using those numbers. and we didn't do it because it was just the right thing to do. we had really talented female leaders who were amazingly good. and you have got to pay everybody equally.

that should be a given for the same job. it's easy to do in a large company. if you just rank people and people at the same rank should be paid at the same level. period. in a startup, if you require people to interview one female for every open position, we saw the numbers change dramatically. emily: now we know you are friends with sheryl. [speaking simultaneously] emily: i know it is tough to answer this question, but what do you think sheryl and mark could be doing differently? john: this is where i am believer in replicatable playbooks. and how you handle a challenge or when disaster strikes or whatever you want to call it, the first thing you do is determine how much of it was external, how much of it was internal, how long it will last, how deep it will be. you then outline your strategy for it and paint the picture of what your company should look like coming out. so i think it is important all of the high-tech companies and leaders do that. and they realize that in today's world you have to be very

transparent because it is doing to get out anyhow. you have to be realistic that you can't stiff-arm government. you have got to say, how do we work towards legitimate goals? you have got to build trust relationships and a track record of being able to do it. the lesson learned is, the minute you find yourself with a major challenge coming in front of you, you realize how serious it is going to be. i think silicon valley is struggling for tech versus good and tech versus bad, and are we really a force for the good, for the majority, not just of america but around the world? i think we can be, but we have lost that focus. it is important we get back to it. emily: do you think facebook is a threat to democracy? is that too much -- john: no. way too big of a jump. the interesting thing is that when a company is doing real well or leaders are doing well, everybody sings your praises. like me in 2001, the minute i tripped, people turned on me i never dreamed would.

and by the way, we came back. every time we got knocked down, we came back stronger. that is the likelihood for facebook as well, but it does mean they have to do things differently. mark and sheryl are good people, but they have got to deal with issues in front of them and deal with them decisively. you can't let it come out a step at a time, then say what does it look like at the end, then work jointly with government to say, how do we get there? emily: given how many times you have seen this movie before, do you think facebook will recover? john: the answer is, any company that doesn't constantly think they're under threat has a problem. you probably saw the press on amazon, where jeff bezos, who is a really good leader, and i like him, and marion, but he said to his employees that amazon could be one step away from failure if we don't have the courage to reinvent ourselves and we don't deal with tough issues that come at us. we will get left behind. 40% of the fortune 500 won't exist in 10 years. the same is true of the high tech companies, maybe even more. if companies don't navigate through their problems, they will get left behind. emily: it's interesting you mentioned amazon. they just said they're going to

create 50,000 new jobs, and you have people in new york protesting in the streets. they don't want amazon in their city. why is that? john: well, anybody who doesn't want amazon in their city with the talent they attract, they should think about it a little bit more. secondly, and i think jeff is aware of this, we have to create an environment where we create more jobs than we destroy. i would have loved to have seen them locate one of their two locations in the midwest because that is where we are losing jobs. it's an area that if we don't create a start-up culture in new jobs, we are going to have the voting patterns you're seeing now. for the first time -- and i lived in north carolina, and georgia, and west virginia, and ohio, and indiana, and illinois, and for the first time people in that part of the world think their children, they are not going to have as good of lives as their parents and their children won't have as good as lives as them. all they want is a shot, and i think this is where the

high-tech community needs to jump in and make a difference. emily: is silicon valley too arrogant for its own good? john: yes. you, you have got to be very careful. first is inclusiveness. and secondly, people around the country don't want to be told who they should vote for, or we'll give you a stipend if your job is displaced. people in west virginia, ohio, georgia, they just want a good job. they want to be proud of that. secondly, we have got to realize that what we do is very good, we also are destroying jobs, and we have to deal with that. with the internet, we knew it would destroy a certain number of jobs, and so at cisco we put network academies in every state in the u.s. we trained 7 million students during the time i was there. many of them got 30% or more raises, many went on to college. we went into the middle east, palestine, created a partnership between startups and the arabs and jewish population about how we work together and the gdp went from .5% in high tech to 6.5% in three years. so this is where i would like to see silicon valley come back to

do what we do best, change the world in a positive way. and i think we have to be careful that our overconfidence is probably erred on being too arrogant. ♪ emily: where do you think the next silicon valley is? john: india. ♪

emily: where do you see the biggest potential for disruption? john: the answer is it is going to occur in every industry. it is going to wipe out 40% of the fortune 500. the big companies won't exist in 10 years. they are going to get uber'd or amazon'd or netflix'd, or whatever words you want to use. by the way, each of those big companies could get displaced as well. you are in a period where you disrupt, are disrupted, and have to reinvent yourself constantly in this new environment. while the job of the ceo used to be vision and strategy, develop,

recruit, retain and change the leadership team, culture, and communications, that job is now three times faster. emily: you're investing globally. john: yes. emily: where do you think the next silicon valley is? john: india, if i had to bet on one country. it is also why it is so important to realize how important selective immigration is for this country. we want to be the place where the best and brightest from all over the world want to go with proper security clearance when they come in. in india, they graduate 600,000 engineers a year. we only do 60,000 a year in the u.s. a huge amount of startups are out of i.t. pools in india, like the stanfords, m.i.t.s, the polytechnique out of france. but they're a much larger scale. emily: are you worried india or even china could surpass the u.s. and that our policies might enable that? john: absolutely. and i think it is something we have to be very realistic on.

it has to be a level playing field. i think india and the u.s. should be the most strategic partnership in the world. emily: so here we are in a trade war with china. is that the right strategy? john: it's not the most gentle way to solve it, but the issue is real simple. you have got to have the same level playing field in china for american businesses as china has here. our government needs to be very careful. we have to tell china, here is what you need to do to get back to normal relationships. so the pressure is probably the right thing to do, maybe not as gentle as i would like to see it. but it does have to get fixed. it cannot continue to do the way it is headed. emily: this brings me to politics. you describe yourself as a john mccain republican. you co-chaired his campaign and have given money to both parties and you voted for hillary clinton. john: yes. emily: what do you think about trump's policy? john: i think he has identified a very key note throughout the mid-part of this country and the

southeast, and that is what we alluded to earlier, people are no longer optimistic their children will have a better life. and for me, it is hard to understand. but i do grasp that things have to change. and this is where it needs to change. i tend to work with both parties very well. i get along with nancy pelosi, kevin mccarthy, chuck schumer, and i get along with the top republican senate leadership. and this is where our countries have a chance to come together and make a difference. and we can do it around startups and job creation. everyone grasps, regardless of whether you're in new york or or minneapolis, or indianapolis, or charleston, west virginia, or silicon valley, it's about start-ups, where the jobs can be created. if we can do that uniformly across 50 states, let's put a person on the moon, let's dream. let's do it. emily: you're traveling the world. you are advising french president macron, you are advising prime minister modi. how do they think about how the president treats them? john: those countries realize we need a relationship between each

other. and you don't have any conversations with heads of states as fixed presidents have told me in the u.s. -- i'm dating myself -- if you go out and share the conversation afterwards. but i think the practicality is we need india. if you watch the relationship between prime minister modi and president trump, it is very good. and i think the relationship on average is good between president macron and president trump. emily: so in 2020, what do you want to see? are you going to be involved in that? john: i would like to be. i was not in the last election. it is the first time i have sat out an election. as you said, i got asked election night in portugal who i voted for. and i said, already i had voted by absentee ballot. i said i voted for a democrat for the first time. as i look forward, i think it is so important that both parties get back to the middle. america does not want to be led from the far right or the far left, and yet that is what we

are doing in gerrymandering the territories, etc. i think we need to as electorate tell our parties, get our act together and be led from the center and do it inclusively. emily: would you like to see a serious republican challenger to president trump? john: i think we need whoever is whether it is president trump for the next four years, or a democrat, or an outsider, we need to get the country back to the middle and inclusive. a country divided is not good for the rest of the world. the rest of the world, even though they're frustrated with us at times, they still know america has to lead. and i think some of the issues that are being addressed from tax policy to ease of doing business should have been done decades ago. and taking on china, it is not fair. if someone is not treating you fair and you don't stand up to them, is the problem the person who is doing that or ourselves because we don't? it took us 19 years to redo our tax code. and we are just getting regulations addressed, so it is important for all of us to

realize that both parties have good ideas. president clinton and president bush taught me that. and i was very close to both of them and still ask for advice and help on tough issues. i think america will come back again. i personally think it has to be around the startups as a logical uniting point. emily: you have written a new book, "connecting the dots," where you are sort of sharing your life lessons from the battlefield. we are in this time where many people are questioning is the world really getting better or worse? so what is your advice to people who are building companies now? john: the speed of change will be so fast. and this is where i think most government leaders know they cannot do it by themselves because they need the industry and technology to help understand, but if the technology and industry doesn't understand the legitimate needs of government, then government will take action which will probably hurt both sides. so i would like to see business and government working closer together. am i an optimist on the future? oh, yeah. because in the end, america always does the right thing. emily: john chambers, i think that is a great place to leave

it. former ceo of cisco and founder of jc2 ventures. thank you so much. ♪ i'm a veteran

and the army taught me a lot about commitment. which i apply to my life and my work. at comcast we're commited to delivering the best experience possible, by being on time everytime. and if we are ever late, we'll give you a automatic twenty dollar credit. my name is antonio and i'm a technician at comcast. we're working to make things simple, easy and awesome.

>> president trump prepares for his delayed state of the union address with a new government shutdown back on the agenda. congress has days to find an agreement on border security and the president has repeatedly said any deals that do not fund his wall will be a waste of time. he suggested to clearing a national emergency to use military money to pay for the wall. venezuelanimed leader juan guaido has one most of the support of europe. the european union itself failed a backing. trade has come to