I met Bill McDermott on a fine autumn day in London. He had a packed schedule for his one day in town, and I got the first slot: 7:45am at the Four Seasons hotel in the Canary Wharf business district.
It felt a little bit like a Hollywood publicity drive, when actors are parked in high-end hotels to give interview after interview about their latest movie. It’s not a bad analogy for McDermott – a glamorous celebrity CEO, with a good story to tell.
He was publicizing his new book, “Winners Dream” – half memoir, half leadership manual, written with candor and charm.
McDermott’s charisma is all the more apparent in person. He is courteous and self-effacing, with a steely glint that reveals itself at unexpected moments. A subtle, Long Island twang adds interest to his softly modulated voice, reminding us of his roots.
McDermott’s journey from working-class teenager to CEO of the world’s largest business software company, SAP, is inspiring. He was still in high school when he bought and ran a local deli, learning fast how to build customer loyalty. After selling that business, he spent 17 years working for Xerox, always with his eye on the top job.
Having become the company’s youngest-ever corporate officer, McDermott left Xerox to take up senior executive roles at Siebel Systems and Gartner Inc., moving to SAP in 2002 where he was named president of its American business unit. He became SAP's co-CEO in 2010 and sole CEO in May 2014.
He told me that some of his most useful business lessons were learned as a teenage entrepreneur.
“I went into a small deli that was perfectly positioned between two very large commercial entities that were much bigger, much richer, and much more capable than my little store,” he recalls. “I started discounting things to put loss leaders like cheap milk and bread and things that people regularly use at the lowest possible price, and of course my competition immediately mimicked that and nearly put me out of business.”
McDermott quickly realized that he could never compete on price. So, he decided to compete on customer service instead. Step one: understand your customer. Step two: give them what they want.
“At that time my base was senior citizens who lived about two blocks away and preferred not to leave their home, so we delivered. We had blue-collar workers who were very loyal. They liked to have their food, cigarettes and beer, but by Friday after they were paid it didn’t last very long, because they’d come in Sunday morning pretty broke. So I gave them credit.
“Then there were the high-school students. One day, I was down at my competition and I saw that they were lining kids up about 40 at a time outside the building and only letting them in four at a time. I asked the kids, 'Why are you waiting in line? How can I get you to come a block down to my store?' And they told me, 'Well I guess they think we’re going to take things.’ And I said, 'Don’t worry about all that, you come down to my store.' And I let them in 40 at a time.”
The kids didn’t steal from him – when they felt like shoplifting, they went to the 7-Eleven. McDermott’s deli was a success, serving the community and teaching him lessons that have stayed with him to this day.
The title of McDermott’s book refers to his belief that a dream can propel you to success. His story shows that having a dream can indeed be a powerful motivator. But an ability to think into and around a problem, so that your solutions really fit, is another characteristic of winners. McDermott amply demonstrated this at the deli – and at other points in his career, too.
As a team leader at Xerox, McDermott successfully applied the idea of ‘discretionary effort’. When his team members hit or surpassed their targets, they were encouraged to spend time helping other team members who were missing theirs. In this audio clip from our Expert Interview, he explains the benefits of this approach.
Question: What are your top tips for a successful career? How far can a dream carry you?
"Get yourself a notebook. Every day, write down three problems that you observe. This can be the place where you drive and foment your own change."
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