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Empowering future leaders

SAP's CEO Bill McDermott, back from a serious injury, hopes to build a better company that can change people's lives.
Saturday, March 12, 2016 - 05:50

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WHEN Bill McDermott gets some time off from his day job of running one of the world's most high profile companies, he loves to play basketball. The CEO of German software major, SAP, is from New York and grew up in a family with a top-notch pedigree in the sport; his grandfather, Bobby McDermott, was a Hall of Fame pro-basketball player who has been called "the greatest long-distance shooter in the history of the game" by contemporaries. His father was also an accomplished player who went on to be a successful coach.

Some of Mr McDermott's fondest memories about basketball, apart from the actual playing, relates to his stint as assistant coach to his father. He, however, emphasises that the memories from those days are not just nostalgia. The SAP CEO feels he learnt a lot about leadership - that he puts to good use today - from his association with the game at a young age.

"Some folks like to talk about their golf handicap but there is nothing more exhilarating (to me) than when I pass the ball to you and you make the winning basket.

"I was trained that it was better to give you the ball when you are open so that you can get the win and I get the 'assist' - that's the highest honour. And that's why I love team sports and especially basketball."

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Giving the 'assist'

He may not be on the basketball court now but he's still busy giving the "assist" to his colleagues in order to make SAP a better company. Mr McDermott feels very humble to serve SAP as its leader, the first non-European to do so.

The iconic German company, which has revenues in excess of 20 billion euros (S$30.5 billion), makes software used by businesses to interact with other businesses. Its portfolio comprises enterprise and mobility applications, analytics, databases and cloud computing services, among others. It is present in more than 130 countries and has around 77,000 employees globally. According to Mr McDermott, it is a function of how widespread the use of SAP software is, that around 70 per cent of the world's GDP is processed through an SAP system.

There are a couple of dynamics that makes me feel humble, says Mr McDermott. "One of them, I think, is it's very interesting that Hasso Plattner (SAP's co-founder and chairman of the supervisory board of the company) and the board brought me in, in 2002, to straighten out the situation in America (as the SAP America CEO).

"When I was able to do that, my role in the company scaled to a global one and ultimately took me to the SAP board in 2008. When the new CEO was selected it was an honour to get the call from Hasso because I really believe this company has a good soul."

Mr McDermott also believes that the technology that SAP has is hard to build. I also understand, as an American, why US companies are so worried and obsessed with, and afraid of SAP, he says.

What we do "is the heart and lungs of organisations globally so it's a very difficult situation for them (competitors) because what we do is really sticky and important to the C-level. And in the end if SAP executes well then we are really hard to beat."

The SAP CEO adds that he participates in a boardroom where "I don't only have external directors but I also have employees that are on the board.

"If you think about it, an American developing the political skills to toggle between external directors, employee representatives, the sensitivity of a truly global software company like SAP and really keep the constituents of all that together, keep everybody happy and lead the people to bold new places. I love that."

But, he adds: "I also love something else even more, which is what we have done for the young people.

"We have alliances with 20,000 universities around the world. We give our technology, we train people and we give them skills to be digitally relevant to the 21st century. A lot of the jobs they come out to do because of their knowledge of SAP may not even be with SAP. It could be within another company, it could be with an ecosystem partner of SAP. I think that's really great." That brings up the question of young talent and how to attract them to a company that, by Silicon Valley standards, is ancient (the company started in 1972). Mr McDermott says he's gratified to see that as a company SAP has grown a lot younger.

"I personally have a rule where every board member has to have a millennial running a big part of their business. I myself continue to hire very young people who have brilliant minds, dynamic hearts and a will of a lion. I give them too much responsibility, too soon, and every time they exceed my expectations. That's the kind of company we are now."

After being on the job for six years, (first as co-CEO and then from 2014 as the CEO) Mr McDermott still feels he's got some way to go. If my time in this company is a 12 Chapter book we're only at Chapter 4, he observes with a smile.

"My dreams still have eight chapters left. I also pride myself on building my successor within SAP and building the next generation CEO structure around me and I will be very happy when it's time to basically give him (the successor) the keys and say: 'Go get them'.

"We spend a lot of time building the succession plan for the next generation leadership. That's very important to me."

Since he's only on Chapter 4 and eight more to go, what does Mr McDermott want to do with the company?

"I want to make SAP the most relevant business software company in the world. It can be the Apple, the Facebook and the Google of our space.

"With our plans on what we can do in a consumer-to-business economy, and how we can bring digital or industrial fourth-generation revolution to the world and help customers solve their biggest challenges so that they can capture the biggest opportunities - this is a story that is yet to completely unfold. We are getting there, it's starting, the drum roll is really beginning now.

"I would like to see SAP as a company that is substantially larger than it is today. That means thousands and thousands of people have jobs and they are successful and the ecosystem doubles and SAP will become the biggest business software company in the world." Bigger size means that most of the growth for the company would have to come from outside of SAP's traditional markets of Europe and the Americas. Mr McDermott agrees to this point.

"If I look at this region, the GDP (gross domestic product) of Asia and our percentage of revenue compared to the GDP is actually lower than in other parts of the world. So we think we can hit the accelerator here and get a force multiplier effect."

He agrees that would make SAP an even more multicultural and multilingual company. Mr McDermott says he meets with the leadership team in this region and other regions quite regularly. "I tell them that you have to have your own entrepreneurial spirit and your own sense of power and determination and your own control of outcomes.

"At the same time to do all there is to do for the customer you have to have the big value chain of the machine called SAP working for you.

"And it's both the local uniqueness and the global fierceness of execution that combine to create a force that could never be done independently or from headquarters ... It's an art form to make that work well. I think we do that pretty well but it's something where you can never take your foot off." He feels US companies go out of their way to control everything centrally and rain down on the local operations. "The reason that doesn't work is that people get demoralised and they don't self-actualise and they end up doing things because they don't want to be controlled by headquarters.

"We try to create an environment where empowerment and self-determination is there and the headquarters is working with and for them to determine the customer success. That to me is the right formula. And that's what we plan to do."

Last year, Mr McDermott had an accident that has had a major impact on his thinking as a leader. On July 6, 2015, the SAP boss fell down the stairs at his brother's house. He was holding a drinking glass when he fell, and it shattered and entered his face, leaving a vertical scar from above his left eye to below his ear. The glass also entered his left eye, causing him to lose vision in that eye after unsuccessfully undergoing several surgeries and procedures to keep it.

Mr McDermott says the most important stepping stone from the injury itself is realising that when you are injured and seriously hurt your mind becomes, interestingly, serene and it encourages you to rest, lay down, sleep and rest because the mind is smart enough to know that if you stand up, life is about to get a whole lot tougher. "Then there is the will, the will steps in and basically reminds you of everything you have to live for: your family, your friends, the responsibilities and your professional life. And you get up.

Telling his story

"And by getting up you realise that there is a bigger purpose in your life than you realised before you got hurt."

What is the purpose?, he asks rhetorically. "You are supposed to tell your story (about your accident) and help people." What I found most interesting is that it makes you much more of a human being, he says.

"You know, be human with me, I'll be human with you. Be authentic with me and I'll be authentic with you. And you really have a next gear in terms of your personal relationships and the care you put into every conversation from the heart because the most precious thing you have is time.

"That is why I really want to make the most out of every conversation; every interaction and I don't want to waste time."

He adds that he talks to a lot of people and he finds that they get a lot of inspiration from someone who got up and rose from a serious accident. "A lot of people never got knocked down yet but I remind them that you can and sometimes it happens when you least expect it."

To a question of how his experience changed him as a leader, Mr McDermott says that it made him more thoughtful.

"It's not that I have become a different person. I still have the vision, I still have the dream and passion but I've become very empathetic as to how I can help other people to achieve their goals.

"You learn from the injury that vision is not just about what you see but vision is also about how you feel and how you make other people. And how you can lift other people up and inspire them."

He finds himself spending more time with other people and coaching them and giving them feedback. "I spend more time telling them things that they don't want to hear and things that I don't necessarily want to tell them but I know that it will make them better.

"So I think it makes me a better leader, I really do."

Mr McDermott's accident had another unintended consequence. It brought him close and personal with the state of the healthcare system.

"Everybody talks about healthcare as this generation's biggest challenge and the impact it has on the GDP. But there is a bigger issue here, a human issue. When you think about the first responders, the nurses, doctors the hospital environment, it gets a lot of criticism because the healthcare system is imperfect. I want to look at the healthcare system in a different way."

He adds: "Yes the regulatory environment is imperfect, the technology is imperfect, and it is not tuned to the 21st century economy. (But) It's the people that hold a tough system together and they don't get the recognition that they deserve. I realise this because if it weren't for the people, I may not have been in this conversation with you right now."

He also asks: "Why is it that I don't have a card, like a social security card, that connects to all my data in a file in the cloud? And if I choose to give a healthcare professional permission to see my data then they can see it? And by doing so, I don't have to repeat my story (about my health condition) to every doctor and every specialist I see... I can't believe that we can't do better than 10 characters in a text to describe the human genome with regard to the challenges faced by an individual fighting a tough battle. That has to change."

The other thing that has to change, according to him, is the idea of the electronic medical record. "The software that companies have built is too complex. The doctors don't like it. The administrators don't like it. Even the insurance companies don't like it.

"I think we can have a 21st-century solution to the electronic medical record, leveraging the cloud and personal data and giving a personalised medical experience.

"We can also develop a true one-to-one relationship with the client. I want to work with government on this; I want to work with the healthcare workers and insurance companies.

"Ultimately I want to help the patients."

Mr McDermott adds that SAP has great technology in their product, Hana, where all these data points can be put into a live system. "We can do everything from a clinical trial to personalised medical records, genome sequencing to tumour eradication based on the unique attributes of a patient's DNA and cure factors based on all the research from the global geniuses that do this stuff. We can bring all that to doctors in seconds at the lowest possible costs to save a life.

"Isn't that a cause worth fighting for? So that's what I see."

He agrees that it helps if a company the size of SAP puts its weight behind this vision. "It's amazing. Of all the correspondence in my professional career, by far the most I've gotten is the result of one roundtable, the SAP Personalized Medicine Symposium, that I did in Palo Alto, California when I came back from the injury.

Lightning rod issue

"And incidentally I came back from the injury once I came out of the ICU (intensive care unit). It (the roundtable) was on my calendar six months before the injury, oddly enough.

"I just casually sat in this panel and talked about what I experienced and what I saw and people resonated with it. And I got thousands of emails and then The New York Times did an article on what the writer saw in that exchange and they also got thousands of emails. And hence I know I have a lightning rod issue that the whole world cares about."

I can give examples of a couple of things that I've been involved in, says Mr McDermott. "There is an organisation called ASCO (American Society for Clinical Oncology) which is very focused. They use Hana to connect the genome sequence of a tumour to all the available research to save people's lives. They now have a partnership with SAP called CancerLink."

So, says Mr McDermott, if enough people care we can take on some the world's toughest problems because technology now gives the solution. "It can be solved and it takes a regulator environment, it takes a technology environment and ultimately it takes the willpower of technology companies and people to say: 'I demand we are better than this, we cannot be this bad'," he adds.


BILL MCDERMOTT

Chief Executive Officer, SAP

1961 Born in Flushing, Queens, New York, US

1983 Dowling College, Bachelor's Degree in Business Management

1997 Northwestern University - Kellogg School of Management, Master of Business Administration (MBA)

1983-2000 Started his career at Xerox, rising through the ranks to become the company's youngest division president

2000 President, Gartner

2001 Executive Vice-President of Worldwide Sales and Operations at Siebel Systems

2002 Joined SAP as CEO of SAP America

2005 Joined Under Armour as a Board Member

2007 Became Board Member of ANSYS, Inc

2008 Appointed to the SAP Executive Board

2010 Became co-CEO of SAP

2014 Named SAP's sole, and first non-European CEO

2014 Published Winners Dream: A Journey from Corner Stone to Corner Office

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