Do you see a flip side to productivity in employees being overworked and burned out? Is there a limit to how much productivity you can squeeze out of people?
Using the U.S. as an example, I believe we're already at the upper edges of how hard we can work as a society. I think the productivity gains in the future will come by revolutionizing the way we work. This means focusing on technology applications to handle the more mundane parts of our jobs and using our creativity and our education process to move into innovative new areas.
I think it's important to think of productivity with this broader definition. It isn't a matter of simply squeezing more out of people or working harder, it's about doing things smarter. Using Cisco as an example, so far in this year alone, we have already seen a 27 percent increase in productivity. Our ability to do that effectively, while not changing the number of hours the average person works at Cisco, has been very successful.
You've spoken about the importance of stock-option plans in the success of companies of all sizes. How do you balance the need for employee ownership through stock options with the concern people have about the kinds of abuses we've seen?
Broad-based employee stock-option plans, which offer options to many employees rather than a few, foster the culture of ownership and associated behavior in which innovation and risk-taking - two fundamentals of economic growth - thrive. I believe it is possible to both rebuild confidence in corporations and corporate governance without damaging the ability to innovate and compete.
First, it has become clear that expensing stock options will not accomplish its intended goal of better accounting or corporate governance. If we are concerned about excessive executive pay, a fair compromise is to expense options of the top five officers of a company - a solution proposed in bills currently before Congress. This will ensure that all companies will have to account for the options to senior management, but allows the average employees to keep their option plans.