December 14, 2020

Bill McDermott’s Secrets for Success as a Way of Life

By Selling Power Editors

Bill McDermott loves underdogs – perhaps because, at one time, he was one.

Growing up in working-class Long Island – the first child of devoted (but financially strapped) young parents – McDermott wanted to make things better for his family. He started early, collecting odd jobs the way other kids collected baseball cards.

In high school, he worked three hourly-wage jobs before convincing the owner of the small deli where he stocked shelves to let him buy the business for a $7,000 loan. Under McDermott’s customer-centric care, the deli became so profitable that he repaid the loan ahead of schedule, shared his earnings with his family, and paid for his own college education. “If I have a dream,” said McDermott, “I will what I want to happen. That’s how it has always been.”

His dream is to encourage people in all walks of life to become masters of their own fate. That’s why he wrote Winners Dream: A Journey from Corner Store to Corner Office (Simon & Schuster, 2014). Although the book is an inspiring salesperson-to-CEO story, Winners Dream is also a blueprint for succeeding in business and life.

Selling as a Way of Moving Up
“The number of sales executives rising to become CEOs grows each year. A sales background provides an edge and offers a leadership platform that is perfectly suited to an effective CEO,” said Bill McDermott after he became CEO of SAP.

McDermott speaks from firsthand experience. Prior to joining SAP as CEO, he was head of worldwide sales at Siebel Systems. He spent the first 17 years of his career at Xerox, where he held numerous regional sales positions. He eventually led the company’s major account operations – at the time a $4 billion business unit.

When McDermott became SAP’s first non-European sole CEO, he invited the company’s most tenured developers to lunch. Sitting around a table at SAP’s Walldorf, Germany, headquarters, McDermott asked his guests a simple question: “What do you need from me?”

One answer stood out to McDermott: The seasoned technologists wanted their new chief to follow whatever he believed to be the right strategy. “It did not matter to them where I lived or where I came from,” said McDermott, who spent the first 30 years of his career based in the United States. “What they cared about was that I knew where I wanted SAP to go and how to get us there.”

KISS
Six months into his new role, McDermott was delivering. “We’re reinventing the company on the idea ‘Run simple,’” he said. “Our destiny is to make beautiful software that is easy to consume so SAP can help solve the world’s most sophisticated challenges.”

For the effusive McDermott, “Run simple” is more than a slogan; it’s a rallying cause. Complexity, he insists, is the new enemy of business. To simplify the way its corporate customers do business, SAP focused on cloud- and mobile-based products and services, in addition to traditional installations. Adopting an on-demand, software-as-a-service business model was a radical deviation for the company that pioneered on-premise, enterprise-wide technologies – but it worked.

Repeatable Methodologies
McDermott’s career trajectory has been a testament to his belief that successful people do not always invent new solutions for new situations. Instead, they routinely adapt proven habits to resolve problems. McDermott also follows what he calls “repeatable methodologies”: for example, asking employees what they need whenever he starts a new job.

The following six methodologies have guided McDermott from one transformation to another throughout his life, and he believes they can work for anyone.

Methodology #1: Maintain an abundance mentality.
The more daring the target, the higher people rise. “What gives dreamers, winners, and abundance thinkers an advantage is that they are not afraid to go for an opportunity. Low expectations and cynicism sap people’s potential, but big numbers get people’s attention and heighten their belief in their ability to achieve the impossible.”

Methodology #2: Articulate a compelling cause.
Beyond a high monetary goal, McDermott believes a well-articulated reason to achieve sparks the imagination and extends people’s stamina: Be your personal best. Change the world. Make history. “Go for the gold,” he says. Why? “Because no one jumps out of bed in the morning to win the silver.”

When McDermott was SAP’s co-CEO between 2010 and mid-2014, the company changed its mission from helping companies run better to helping the world run better and improve people lives. Explains McDermott, “Truly great organizations contribute something to the world beyond strong financial performance, and people want to work for great organizations.”

Methodology #3: Balance the audacity of a dream with the micromanagement of reality.
McDermott is more than a dreamer and soulful marketer; he also is obsessed with rigorous execution, which means plans and tactics must bolster bold goals and compelling causes.

In 2002, when McDermott took over SAP America, he targeted future growth at 10 times the rate the business had grown in the past. Colleagues said he was crazy, but McDermott fired back with a four-point plan that redirected the dispirited sales force and infused people with confidence. He also enmeshed himself in the sales process, leading weekly calls to dissect the largest pending deals. The level of scrutiny ensured that nothing fell through the cracks, which helped SAP America win more customers and surpass its growth goal. Observes McDermott, “When a vision and strategy are paired with disciplined execution, anything is possible.”

Methodology #4: Hold everyone accountable until the final buzzer.
McDermott vividly recalls the time one of his sales reps announced on the last day of a fourth quarter that he had met his quota and was thus done. “No, you are not,” McDermott insisted. “We are never done!”

As long as there is time left on the clock, McDermott knows there is still a chance to score. It’s a philosophy he inherited from his grandfather, Bobby McDermott, a Hall of Fame pro basketball player during the 1940s who was known for his last-second, game-winning shots.

In business, McDermott is always ready to shoot. Back in 2009, on the heels of the Great Recession, SAP was poised to miss its revenue targets for yet another quarter. Unwilling to accept that outcome, McDermott and his co-CEO-to-be Jim Hagemann Snabe called an emergency meeting of SAP’s top salespeople and developers. Their goal was to prepare SAP to close 1 billion euros in revenue in the final three months of the year. In Winners Dream, McDermott describes what they did and how the powwow paid off: For the first time since 2001, SAP broke through 1 billion euros in a single quarter. Says McDermott, “It’s never too late to go for a dream.”

Methodology #5: Honor the ecosystem, because everyone matters.
McDermott has always respected the power of ecosystems to grow a business. When he took over the deli as a teenager, he had no cash, but he had built trust with suppliers, so they gave him free groceries until he could afford to pay them back. Years later, when he was going door to door in Manhattan selling Xerox copiers, befriending lobby doormen throughout his territory eased the young salesperson’s entrance into buildings – and into the offices of potential customers.

This “everyone matters” methodology scaled at SAP. To help revive its U.S. business, McDermott strengthened ties with SAP’s business partners such as consulting firms, which sold SAP’s software to their own clients. Observes McDermott, “Only when you build trust, respect, and transparency among employees, customers, partners, and vendors can you win.”

Methodology #6: Always remember that humanity is the highest purpose.
Winning, he believes, is not about a specific end but about how an end is met. Vision, strategy, and execution all pale in comparison to how people are treated. For years, this approach has dictated his decisions. He holds two memories especially dear.

First, as an earnest young sales rep, McDermott dropped his daily routine the minute he heard that his co-worker’s wife had a baby. McDermott hopped in a cab and was the first person at the hospital, flowers in hand. Years later, as CEO of SAP America, when a close co-worker’s father passed away, McDermott rerouted his sales trip and flew from the West Coast to the Midwest, driving another two hours to attend the funeral in a small Minnesota town.

“The true measure of a leader is not only what you accomplish while in office,” he writes in Winners Dream, “but the feelings and memories that linger once you leave.” For McDermott, when methodologies and humanity go hand-in-hand, everyone wins.

McDermott’s Three Takeaways for Sales Managers

  1. Don’t let anything or anyone limit your dreams. Ask yourself, “Am I using my lack of management experience as an excuse to lower my team’s standards? Am I waiting to set audacious goals until I feel more confident or get someone else’s approval?”
  2. Strive to inspire, not just to manage. Ask yourself, “Am I giving my team a meaningful reason to achieve – a cause – that goes beyond a numeric goal? Am I telling people what to do, or am I inspiring them to do great things?”
  3. Be a player-coach. Ask yourself, “How often does my team role-play scenarios and share best practices? When was the last time I joined each of my sales reps in the field?”

McDermott’s Three Questions for Sales Managers

    1. Have you set a bold and audacious goal for your sales team? If you haven’t, you are sending a message that you don’t expect your team to win big.
    2. Do you know the personal interests of the salespeople on your team? If you don’t, you won’t be able to align their personal goals with your team’s goals.
    3. Are you hiring people who are better than you? If you aren’t, you’ll create a ceiling for achievement that will sabotage your company’s market potential.

McDermott suggests the following steps to communicate your own vision and motivate your team.
1. Communicate the reason you need to change. Over-communicate it. To get people to follow your lead, you have to get them to change their minds. They need to see that this change isn’t just some random request you dreamed up; it’s developed around a cause worth fighting for.

2. Stretch the team. Good leaders constantly stretch people. I ask a lot of people, but they deliver.

3. Empower each individual. “It’s important to speed up decision making. Many companies centralize all power in the corner office and, if management has to OK even the most minor decision, it slows down the sales process. Our people are told, “If it’s right for the customer, just do it.”

4. Reward high performers. I’m not afraid of paying out compensation. Perhaps we even disproportionately reward high performers…but you must create an intensity to win.