The Power of Empathy

Not many leaders talk about empathy, but in his upcoming book, Winners Dream: A Journey from Corner Store to Corner Office, Bill McDermott shows how empathy helped catapult his career from salesman to CEO. Selling Power spoke with McDermott, who in May 2014 became the sole and first non-European chief executive officer of Walldorf, Germany-based SAP, about the power of empathy to build a company, a career, even a paper route.

Q: What does empathy have to do with running a global technology business?
A: Empathy is all about knowing people and caring about what matters to them – what they want, what they value, what they love. Effective leadership is about getting out of your own head and getting into the heads and hearts of others – your customers, employees, co-workers, partners. Unless leaders know what people want, we cannot sell to them, create products for them, motivate them, or lead them to places they never imagined they could go.

Q: How did you figure this out?
A: I inherited this way of thinking from my mother, an amazing woman who genuinely cared about others. Growing up, I watched as my mom put herself in other people’s shoes, whether it was her children’s or a neighbor going through a difficult time. At a young age, I applied her way of thinking to my own life.

Q: Not a lot of kids would do that. What motivated you?
A: I come from humble beginnings, and as a boy I wanted to make money to help my family. On my first paper route, I quickly figured out that, when I delivered the newspaper exactly how someone wanted it – tossed on a front lawn or tucked inside a mailbox – I got bigger tips. Plus, their happiness made me happy. That was a powerful lesson, and I applied the same thinking in high school when I bought a small deli with a $7,000 loan. My little store competed with big chain stores, so only if gave my customers something unique could I pay back the loan and make a profit. Like the paper route, I became obsessed with what my deli customers wanted. My empathy paid off. I paid the loan back and made enough money to pay for my college education.

Q: You started your career in sales at Xerox and were number one in almost every sales position you held. How did empathy help?
A: I figured out early on how to walk into a room and read it. If I sensed a potential customer was unhappy, I tried to figure out why, and then I made it my job to alleviate the customer’s pain. As a sales manager, I taught my sales reps to listen and learn before selling and telling. Today, I do the same thing as CEO, whether I’m walking into a boardroom, visiting a corporate customer, or entering a new market. Most important, I listen to our customers’ customers – the all-powerful end consumers – because their evolving desires dictate everything.

Q: What are you hearing, and what are you doing about it?
A: Most fascinating is what I do not hear! For many established companies, an acceptance of slow and steady growth has set in. Maybe it’s the shiver that the 2008 financial crisis sent through the economy, but not enough CEOs are talking about creating exponential growth by truly reimagining how their companies interact with their customers, especially in our digital world. Instead, they bemoan how complex running a business has become. I’m now convinced that complexity is the most intractable business problem of our generation, a demon that sucks time and money and stifles bold ideas. Once I understood the choke that complexity has on so many companies, I thought about how SAP could alleviate it. The answer was simple. Literally! “Run simple” is SAP’s new strategy to achieve what we have long set out to do, which is help the world run better and improve people’s lives. I truly believe that reducing complexity will empower people to be bold again.

Q: When we talk about empathy, we’re also talking about emotional intelligence. How do other people’s emotions affect your own behavior?
A: Effective leaders do more than just acknowledge what people are feeling, they cater to those feelings. “Run simple” is a good example of how listening and learning helped create a relevant, new business strategy. Let me offer a more universal example: when it comes to change, I’ve learned that people don’t fear the change. What they fear is change without a reason, change without a plan. So when you present a new strategy, first explain why change is necessary. People must understand why the old world went away before they can embrace a new one. Second, show people how change will unfold. Map the actions everyone must take to get where you want to go. When people understand why they must go down a new path and how to go down it, fear of the unknown evaporates into excitement for what is possible.

Q: Can you be empathetic and still be tough?
A: The two go hand-in-hand. Leaders can be tough only after they have been empathetic. Once you show an unwavering commitment to someone else and prove to them that you care about their success and believe in their dreams, then you can set high expectations and hold them accountable for results. Accountability without empathy only demotivates people.

Q: Is there a shortage of empathy among leaders today?
A: I would offer that there is a shortage of authenticity. To earn people’s trust, leaders must trust themselves. That means staying true to your values, your plans, your own strategy, even if that upsets some people. Everyone has an opinion, and today more than ever those opinions go viral and become public. My advice? Resist the pressure to deviate from YOU! The “you” about you is your secret formula to success.

Q: You have achieved your dream of becoming a CEO, but you have many years ahead of you. What do you want?
A: First and foremost, I am SAP’s leader, and I have a passion and responsibility to grow our company. To achieve that, I want us to run simple. I want our customers to demand it. I want our developers to embrace it, our partners to adopt it, and our investors to value it. Leonardo da Vinci said that simplicity is the ultimate sophistication. I also want simplicity to be the future.

More personally, I want to stay humble and hungry, to always remember what got me here while maintaining a passion for tomorrow. That state of mind is my definition of success. I also want to empower the dreams of winners everywhere and from any walk of life. Other people’s definitions of success are different from mine, and that’s OK. Honoring the diversity of our dreams is what empathy is all about.