The Art of Selling Enterprise Software (with ServiceNow CEO Bill McDermott)

Summary

Podcast Summary: The Art of Selling Enterprise Software (with ServiceNow CEO Bill McDermott)
ACQ2 by Acquired
Release Date: March 10, 2025

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Introduction to Bill McDermott’s Journey

In this compelling episode of ACQ2, hosts Ben Gilbert and David Rosenthal engage in an insightful conversation with Bill McDermott, the dynamic CEO of ServiceNow. With a storied career that spans leading global software giant SAP and humble beginnings as a salesperson at Xerox, Bill shares his transformative journey in the enterprise software landscape.

Early Career at Xerox

Bill delves into his early days, recounting how a direct mail campaign landed him a coveted position at Xerox. “[00:26],” he reflects on his transition from a teenage entrepreneur running a delicatessen to becoming the youngest corporate executive in Xerox's history. He emphasizes the importance of perseverance and adaptability, highlighting the rigorous training program at Xerox that ingrained the SPIN selling methodology—Situation, Problem, Implication, Needs Payoff—which remains a cornerstone of his sales philosophy today.

“As long as you haven't committed any crimes, you're hired.” — Bill McDermott [04:14]

Transition to Management

Ascending swiftly through Xerox’s sales ranks, Bill recounts his move into management at a young age. “[14:05],” he explains how his leadership style was shaped by a commitment to team success over individual accolades. By implementing a culture where “nobody gets to fail,” Bill fostered an environment of collective achievement, ensuring that every team member reached the President's Club, Xerox’s top performer accolade.

Building a High-Performing Sales Team

Bill’s narrative underscores the significance of nurturing talent and building strong team relationships. “[17:30],” he describes how personal connections and mutual support within his team created a family-like atmosphere, driving performance and camaraderie. This approach not only enhanced sales outcomes but also established enduring bonds among team members.

Philosophy on Sales and Leadership

A recurring theme in Bill’s discussion is his belief that “performance is the price of freedom.” “[12:21],” he asserts, advocating for empowering sales professionals to operate autonomously rather than confining them within bureaucratic structures. This philosophy encourages agility and responsiveness, essential traits in the fast-paced enterprise software market.

Selling Enterprise Software: ServiceNow’s Value Proposition

Transitioning to his current role at ServiceNow, Bill articulates the company’s mission to “automate the way work is done” across enterprise silos. “[32:32],” he explains how ServiceNow integrates disparate systems—finance, HR, sales, engineering—into a unified platform, enabling seamless workflow automation and enhanced operational efficiency. This holistic approach addresses the complexities of legacy systems and positions ServiceNow as a pivotal AI platform for business transformation.

“The most important thing that the customer needs is they need to automate the way work is done.” — Bill McDermott [32:32]

The Role of Brand in B2B Enterprise Companies

Unusually for a B2B enterprise company, ServiceNow places significant emphasis on brand building. “[43:32],” Bill elaborates on how a strong brand identity fosters empathy and alignment with customer values. By partnering with influential figures like Idris Elba, ServiceNow enhances its brand narrative, making it relatable and impactful beyond traditional enterprise boundaries.

“The brand is your identity, it's your DNA.” — Bill McDermott [43:32]

Partnering with Other Enterprise Software Companies

Bill addresses the challenges and strategies involved in partnering with other major enterprise software firms. “[48:35],” he asserts that collaboration enhances customer value rather than creating zero-sum competition. By integrating ServiceNow with existing systems, they enable a more cohesive and efficient technology ecosystem, benefiting both partners and customers.

Challenges in Selling ServiceNow

One of the primary hurdles Bill identifies is reaching the CEO level, where the decision-making power lies. “[39:30],” he notes, capturing the frustration CEOs face with entrenched systems and regulatory pressures. ServiceNow’s solution, therefore, is positioned as a strategic imperative rather than a mere technical upgrade, necessitating executive-level buy-in.

“Only the CEO has that clean glass purview to a clean glass platform that does everything I just said.” — Bill McDermott [41:14]

Advice for Entrepreneurs on Becoming Enterprise Leaders

Bill offers valuable advice for budding entrepreneurs aiming to excel in enterprise sales and leadership. “[27:48],” he emphasizes the importance of understanding customer needs over showcasing one’s own technological prowess. By focusing on the strategic objectives and operational challenges of clients, entrepreneurs can position their solutions as indispensable tools for business success.

“They are hiring your product to do a job.” — Bill McDermott [29:21]

Culture, People, and Work-Life Balance

Concluding the conversation, Bill shares his passion for building companies that prioritize people and culture. “[54:15],” he criticizes the post-COVID shift towards viewing work merely as a means to live, advocating instead for environments where employees find joy and fulfillment in their work. His vision for ServiceNow encompasses not just technological excellence but also the cultivation of meaningful human connections and a vibrant corporate culture.

Final Reflections

Bill McDermott's insights offer a comprehensive look into the art of enterprise software sales, leadership, and brand building. From his formative experiences at Xerox to leading ServiceNow's ascent as a top enterprise software company, Bill underscores the critical balance between technological innovation and human-centric leadership. His emphasis on empathy, team empowerment, and customer-focused solutions provides a roadmap for entrepreneurs and leaders aiming to make a significant impact in the enterprise sector.

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Notable Quotes:

“As long as you haven't committed any crimes, you're hired.” — Bill McDermott [04:14]

“The brand is your identity, it's your DNA.” — Bill McDermott [43:32]

“The most important thing that the customer needs is they need to automate the way work is done.” — Bill McDermott [32:32]

“They are hiring your product to do a job.” — Bill McDermott [29:21]

“Only the CEO has that clean glass purview to a clean glass platform that does everything I just said.” — Bill McDermott [41:14]

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This episode serves as an invaluable resource for entrepreneurs and business leaders, offering firsthand perspectives from a seasoned CEO who has successfully navigated the complexities of enterprise software sales and company leadership.

Transcript

[David]

Hello, acquired listeners and welcome back to ACQ2, our interview series with CEOs and founders building their companies in real time. Today we have a conversation with one of the all time greats, Bill McDermott. Bill is the CEO of ServiceNow where he has led the company for the past five years. He was previously the CEO of global software giant SAP and started his career way back at Xerox carrying a bag as a salesperson, which we will talk about today.

[Ben]

Yes, we focus on something that kind of amazingly, we haven't really covered yet here at Acquired, which is the art of enterprise sales and how Bill does it so very well. He's grown ServiceNow from three and a half billion in revenue when he joined to over 10 billion today and one of the largest enterprise software companies in the world with nearly a $200 billion market cap. We also, which is fun for us given how much we love brands, get into why he cares so much about brand building, which is obviously usually reserved for consumer companies, enterprise software providers.

[David]

Yep. And many of you will recognize ServiceNow since they've been an acquired sponsor the last couple years. And as we were thinking about who would be best to talk to about.

[Interviewer]

Enterprise sales, we realized we actually have.

[David]

A direct line to one of the all time greats. Bill is a fascinating guy to spend time with. And if you want more of his personal war stories after listening to this, he also recently did a great interview with Ben Thompson over at Stratecherie. So with that, onto our interview with Bill McDermott.

[Interviewer]

So, Bill, thank you for joining us.

[Bill McDermott]

Thank you, Ben.

[Interviewer]

We want to start, I'm saying thank you for joining us, but thank you for having us over here to ServiceNow.

[Bill McDermott]

It's great to have you. Thank you for coming.

[Interviewer]

Yeah, we want to start all the way at the beginning. There's a mythical company that we've only talked about on our show from oblique angles. We've never hit it head on. And that's Xerox and in particular Xerox in its heyday. And I'd love to hear from you. One, how you found your way to Xerox because that's an amazing story. And two, what the path went from in your life to going from an individual contributor, salesperson to the youngest corporate executive in the company's history.

[Bill McDermott]

Well, thank you very much, Ben and David, I'm so happy to have you here. What's an amazing story because I was a teenage entrepreneur running a delicatessen, put myself through high school, college, and obviously I had big dreams. And one of those dreams was to make it into the Big Apple, New York City, and get a job with a premier corporation that had a great training program. And it just so happened that I sent out a direct mail campaign. Back then you had to do your own typing and put letters in envelopes and mail them out. And Xerox was the company that invited me in. There were others too, but Xerox was the prestigious one. I left my house in Long island that day in the midst of a flood. And I've told that story before, but I eventually make it into New York City and go into the interviewing process at the top of the sixes. And that was like the building in Manhattan at the time. Rotating bar on the top floor overlooking the city. Very, very cool. But the hiring center was somewhere in the midd of the ground floor and the rotating bar. And that's where I interviewed for my first sales job. And that day I got passed on to many different interviews. And I ended up with the final interview at 9 West 57th. Iconic building. Iconic building. Back then they called it the Avon building. Now it's the nine and a half building. But it's right across the street from the plaza and it's a magnificent view to Central Park. And I eventually get into the interview with the big boss. And I have told the story before that I had promised my dad that I was coming home that day with my employee badge in my pocket after we had a very good interview. And I never broke a promise to my father. And the big boss looks over at me and kind of tilts his head a little bit and like, what's up with this kid?

[David]

This kid for real?

[Bill McDermott]

Yeah. Is this kid for real?

[Interviewer]

This was kind of a long shot job, right? Like this was a. I mean you were a teenage entrepreneur, but you were scrappy. You were not necessarily from central casting who they were looking for for this job.

[Bill McDermott]

I wasn't coming out of an Ivy League school with a corporate pedigree in my family. I was coming out of a teenage entrepreneur who was scrappy. But when I showed up in that interview with my $99 suit, it looked like a million bucks and I was ready to go. And you know, you're absolutely right. When I first looked around the room, you know, I see Princeton and Notre Dame and Dartmouth and all these amazing colleges and, you know, kids that really obviously came from that corporate pedigree and most of them from wealth actually. And it was a little nerve wracking in the beginning because I said, damn, I might have overshot it with my dad a Little bit, you know, guaranteeing them I was getting the job. But after I got in the interview and Mr. Fullwood said to me, as long as you haven't committed any crimes, you're hired, I validated that because I hadn't committed any crimes. I started my career at Xerox. And they had at the time the most competitive training program in the information technology industry. And Xerox was what today you would think of when you think of Google or Amazon or Meta or any of the great tech companies.

[David]

Tell us, as Ben alluded to, we've talked about Xerox and all the history we cover on the show many times, but not directly. What was it? What were the products? What were they selling? Why was it the best back then?

[Bill McDermott]

Yeah. Well, David, on the ride into New York City for these interviews, I was reading the annual report of Xerox, who at the time was being run by this CEO named David Kearns. And the magic at that time, this is 1983 now, the magic of that company at the time was the reinvention to total quality management. And people don't realize in this society we live in now that there once was a thing called total quality management. And the way you managed a company, the way you built products and the way you conducted your business was extremely formal. And there were processes that were very carefully thought through and planned. Whether you were engineering a product, whether you were selling something to a customer and then caring for them in the post sale process, or all of this was in a value chain built on quality. And that was David Kern's gift to Xerox Corporation, because Xerox was going through its own reinvention and he had benchmarked what was going on with the Deming principles in Japan.

[David]

Toyota.

[Bill McDermott]

Exactly. And at that time, the most valuable companies in the world were from Japan. Apple wasn't the most valuable.

[David]

This was a scary moment for the U.S. right?

[Bill McDermott]

Of course. And if you looked at the top 10 companies in valuation, more of them were from Japan than the US back then.

[Interviewer]

Electronics at Sony, the automakers are coming in.

[Bill McDermott]

Precisely. And General Motors might have made the list then, but Apple wasn't even on the scene at that level. Just to give you a feel for it. And so I got very inspired by a CEO with a dream. And as I'm reading this on the annual report on my way to New York, it was forming a shape in my mind that this is where I wanted to be, which is why I closed so hard for the job. But then once you get the job, you go into a very serious training curriculum. It was built on something called spin, which was situation, problem, implication, and needs payoff. And that's called spin. And that was clearly.

[David]

This made an impression.

[Bill McDermott]

Exactly.

[David]

With you to this day.

[Bill McDermott]

Yeah, it's still to this day. I mean, I don't even think about it. It's just a reflex. And so what happened was I graduated number one in my training class. And why did that matter? Not because it actually mattered that I got more money, but I got a territory. And so My territory was 57 to 59th, 5th Avenue. To park that beautiful square where you could wear a navy blue suit, a white shirt, and a nice tie. And every day you walked in the most beautiful neighborhood in the world.

[David]

And when you say you had a territory, I mean you were. Your job was to walk into office building lobbies.

[Bill McDermott]

Exactly.

[David]

Cold, unannounced. And try and get meetings with buyers.

[Bill McDermott]

Exactly. And so what I did is I realized early on that that was my patch. Like, this was my piece of the world. And I felt when I walked down that street, I was the king of the world. And when I walked in those buildings, I knew every doorman. I knew everything about them. Their families, what interests they had, what sports team was their favorite. And I didn't miss an opportunity to drop a cup of coffee on my way up the elevator to the top floor in the building. And now if you fast forward to today, why is that so wild? Because today you can't even get in the building without ID and somebody vouching for you and security letting you through some turnstile things we had to go.

[David]

Through to get here.

[Bill McDermott]

Right.

[Interviewer]

I think we signed an NDA before I even knew what was going on.

[Bill McDermott]

Exactly. So I'm on the loose. Lost art 100%, but I'm on the loose. And, you know, then it just came down to the number one rule in sales is it's a numbers game. And I was not going to be outworked, so that was not going to happen. So I'd start at the top floor. I work my way all the way down. If somebody moved into the building, moved out of the building, something was changing in the building. There was a new cove forming. I had all my webs around what was going on in my turf.

[Interviewer]

And this is a dumb question. Are you selling photocopiers?

[Bill McDermott]

I was selling photocopiers, electronic typewriters, faxes, and laser printers. And this was the very early day of those laser printers. And then that manifested itself into something called document this and document that, which were basically what you would view today as a beautiful Windows level computer that operated with the ease of a Mac and had gorgeous user interfaces and so on. Xerox is so far ahead in so many ways and didn't capitalize on all those innovations, which is another story that I can get into. But the sales profession is a magnificent profession. And I had worked my way up very quickly through the sales ranks. And you know, when you're number one in the country or number one in the world, people give you promotions. And I always tell people in sales, and I said it then, performance is the price of freedom. I never wanted to sit in internal meetings and have a boss tell me what to do or how to do it. So what I would just tell them is, I'll be number one in the country or number one in the world. Just let me run. Because if I'm inside this building sitting in boring meetings, looking at PowerPoints, I'm wasting my day. I need to be loose and on the loose. And my managers, to their credit, were very happy with that because at Xerox, they wanted to post up big numbers.

[David]

Is this bucking the culture at Xerox or was this part of the course?

[Bill McDermott]

It was feeding the culture, because the manager's like, okay, you know, you got to come to my team meeting occasionally. But I want people that want to be out there on the run, on the loose. So somehow corporations got very bureaucratic, and I think we need to unleash that sales animal, that animal instinct in people and let them run. But that's my opinion. Anyhow, what I realized is after doing several of these jobs and getting promoted into bigger and bigger things, I got my high on people coming into my little bullpen. When I would be sharpening my saw in the morning or at the end of the day asking me questions, and I would tell them what I thought they should do. And then when they were not performing or having difficulties, they would ask me to travel with them as a favor. And I was like, I'd be happy to do that. And I would go on calls with them, give them pointers, and then actually be on the call and kind of take over the call for them. Not so I do their job, but just so I give them my, you asked me my opinion, this is what I think we should do. And when I see that they're fumbling around, I just did a forum. And then I was like, this is what makes me happy. Making them happy, helping them be successful is kind of what I was called to do. This is what I love Doing So my first sales management job, I wasn't Even in my mid-20s yet, took place when I interviewed against a lot of other folks that were probably more qualified candidly for the job than a guy in his 25ish.

[Interviewer]

In hindsight, that's not true.

[Bill McDermott]

That's not true. But at the time I felt that, man, I'd be a real stretch because there was a professional management training curriculum you had to study, you had to be credentialed, you had to interview in front of a panel of very accomplished executives at the Xerox company. And I felt like, yeah, I'm a comer, but these guys and women are more experienced and they've been there longer and they probably deserve it more. And I interviewed against all the other ones and got the job.

[David]

And when you were moving into this management job, did that mean no longer carrying a bag and making sales calls or is this a hybrid role or.

[Bill McDermott]

That's a good question. It means that I'm the manager of 17 other people that are carrying bags. And we were covering the uptown of Manhattan from 57th street to let's say 242nd street in the Bronx. And we had both river to river. So you had north, south, east, west, everything from 57 to, let's say 242nd in the Bronx. So everything from Park Avenue to Harlem to the South Bronx and so forth, we were in it all. And that was so cool. And I think that people might be interested to know, like, why did you get the job? And I got the job because I went in with 100 day action plan and I laid out in very basic, simple terms exactly what I would do in the first hundred days. Other people didn't have a well thought through action plan. And then the final thing was I wanted it more. And what basically happened with that team is it was so cool because we took young people right out of university, we shaped them around the market in which we competed and served. They looked like they belonged in the market. And we had philosophies around being the best in the world. Around goal orientation. We posted the top three goals that each person had on the team on a wall next to the bell. And it wasn't just about your business goals, it was your personal goals and what you wanted to achieve as a person. What was the most important motivator inside of you. And then we had a philosophy around discretionary effort. So I might be best in class at proposals, or I might be best in class at closing, or I might be best in class at how to manage activities and do financial accounting or maybe in grammar and putting together the best letters and communications, we figured out who was the best at every single thing. And then it was everybody's job to give discretionary effort. So 80% of your job was for you personally. The other 20% was for your team. Because we had to win as a team. And nobody gets to fail. So nobody gets to fail was the mantra of the team. And everybody has to make the President's Club at the time, which was the top performers in the company. And it was the only time you're.

[Interviewer]

Saying everybody on your team had to make President's Club.

[Bill McDermott]

Everybody.

[David]

So, I mean, this sounds great. This is very hard to do. I mean, you're getting people, 17 people, each of whom are trying to eat what they kill to now care about the team.

[Bill McDermott]

Totally. We were like a family. We did everything together. You know, for example, my man in the Bronx was Everton Harrison. He covered the North Bronx and Tony Garcia covered the South Bronx and Bill Atkins covered Harlem. And, you know, it went all the way through the team. And we were always on the loose. We were always in front of the customer. In fact, one of the funny stories is Everton, I love thinking about on the loose as it's like, well, on.

[David]

The loose, it should always feel that way, right?

[Bill McDermott]

Always.

[David]

Do you feel that way now?

[Bill McDermott]

I feel right now I'm so on the loose, you know, And I love being on the loose because I do my best work when I'm not confined and I try to empower everybody around me. I don't want them to seek permission. I was just in a meeting and I said, look, it's easier to beg for forgiveness than ask for permission. You're a professional, you're very good at what you do or you wouldn't be in this room. Make the decision, make moves, do things. I'd rather have roughly right executed right now than perfect two weeks from now. Roughly right is going to be good enough, Especially in a world that's moving as fast as this one. But we knew each other. I had an email that came in this week from one of the members of the team and he said, I don't know if you remember me. I remember you. And I said, oh, no, I remember you because I remember when we had the team at your father's house in Bay Head, New Jersey, and we would do things like that as a team on the weekend. I had my whole team at my first house and doing a sleepover and spending time together, getting to know each other, caring about each other, building those friendships, building that trust, building that desire to be the best. And that's what it takes. You know, Everton, one of the great stories is he had this red Volvo with a hole in the floor where the muffler is in the car. And he used to love cocoa bread and meat patties. And we'd stop at this place in the Bronx to get cocoa bread and meat patties and he would put it on the floor underneath the driver's seat to keep it warm. So when we got to 57th street, the whole team could feast. And it was, you know, all these things. Well, Bill Atkins had this gym in Harlem. He could get to open up for us to play full court basketball. So everybody had something. But also it wasn't just work, it was something personal that we could connect on and team up on. And that team today is still in people's hearts and minds, is probably the greatest new business team of all time. Wow.

[David]

We want to thank our longtime friend of the show Vanta. The leading trust management platform. Vanta, of course, automates your security reviews and compliance efforts. So frameworks like SoC2, ISO 27001, GDPR and HIPAA compliance and Mon. Vanta takes care of these otherwise incredibly time and resource draining efforts for your organization and makes them fast and simple.

[Ben]

Yep, Vanta is the perfect example of the quote that we talk about all the time here on acquired Jeff Bezos. His idea that a company should only focus on what actually makes your beer taste better, that is spend your time and resources only on what's actually going to move the needle for your product and your customers and outsource everything else that doesn't. Every company needs compliance and trust with their vendors and customers. It plays a major role in enabling revenue because customers and partners demand it, but yet it adds zero flavor to your actual product.

[David]

Vanta takes care of all of it for you. No more spreadsheets, no fragmented tools, no manual reviews to cobble together your security and compliance requirements. It is one single software pane of glass that connects to all of your services via APIs and eliminates countless hours of work for your organization. There are now AI capabilities to make this even more powerful and they even integrate with over 300 external tools. Plus they let customers build private integrations with their internal systems.

[Ben]

And perhaps most importantly, your security reviews are now real time instead of static, so you can monitor and share with your customers and partners to give them added confidence.

[David]

So whether you're a startup or a large enterprise and your company is ready to automate Compliance and streamline security reviews like Vanta's 7,000 customers around the globe. And go back to making your beer taste better. Head on over to vanta.com acquired and just tell them that Ben and David sent you. And thanks to friend of the show, Christina, Vanta's CEO, all acquired listeners get $1,000 of free credit. Vanta.com acquired so I gotta ask you, you are.

[Interviewer]

I mean, David and I have had the privilege of meeting with a lot of leaders, especially the last couple years as Acquired has gotten big. You are the best enterprise sales leader we've ever come across. Like, you're in a whole other league. How did that happen? Like, how did you become this incredibly unique person? And I guess part two of my question is, for all the entrepreneurs that are listening, what should they take away if they want to become a great enterprise leader?

[Bill McDermott]

Well, thank you very much, first of all, Ben, for your kind remarks. I have to go back to my book, Winner's Dream. You know, when I put Winner's Dream into print, it was basically as a byproduct of losing my mom way Too Young in 2010. And in doing the book, I started to think about these stories, you know, things that I lived through. And I dedicated the book to my mother, Kathleen McDermott. Everything I was, am, or ever will be, I owe it all to you. And then I followed that up with a quote from the great Robert Kennedy. And he was quoting George Bernard Shore, a speech he was doing at Kansas University in 1968. And he basically said, some men see things as they are and say, why I dream things that never were and say, why not? So I think the whole sales thing came from, you know, really early, early stages, you know, delivering newspapers when you were too young to get permission from the Long Island Press to actually do it, that your parents had to sign off on it. And then somebody had to trust you with the consignment of the first stack of them because each week you had to pay for the papers. It wasn't like you get a privilege. You're paying for them. You're nothing more than a quote, unquote agent. And then, you know, pumping gas at Merritt gas station and just trying to stay awake on the midnight shift or bus and tables or stocking shelves at a supermarket or working for the town painting fences or cleaning up garbage and many other different jobs. And then ultimately landing my dream job, which was owning my own delicatessen. All that gave me such humility and empathy for people, and people are my love and superpower. And so in the deli. You know, it looks accidental that I got the job at Xerox, but I was the only guy to talk to 500 people a day and knew what they wanted, knew what they liked, knew what was important to them. So I just simply went into being me mode. And as long as you're going up.

[David]

And down the buildings in the doorman and the.

[Bill McDermott]

Exactly. But, you know, that only was made possible because you got through the interviewing cycle. And why'd you get through the interviewing cycle? And why'd you get the job? And then why'd you. You know, why'd you figure out that the doorman was the central nervous system of the building? You know, all that stuff comes from. Despite the instincts, that comes from understanding people and loving people and being with people, but being real with people and reading the rooms. You gotta be able to read the room. Otherwise you land. But you don't expand because you have nothing interesting to say. You're not in tune with the room.

[David]

So it's very funny hear you say all this, because we've been waiting for the right time to bring this up, but there's another major figure in acquired lore history who we've had on the show who has basically the exact same background as yours, and I believe you are also good friends. Howard Schultz.

[Bill McDermott]

Absolutely.

[David]

And that is exactly how he would describe Starbucks culture.

[Bill McDermott]

Yeah. Howard is like a brother from a different mother. I love Howard, and we're very, very much alike. And I know that we both had the Xerox experience. I stayed a little bit longer.

[David]

Did you cross paths there?

[Bill McDermott]

We didn't cross paths. I think Howard had already gone on to bigger and better things. But I had talked to Howard probably three months ago when ServiceNow won the American Opportunity Index out of the top 440 companies that Howard surveyed. And this is his philanthropic unit. They survey how the people are individually progressing and prospering in your company, but also when they leave your company, how do those people do? And ServiceNow won two years in a row for a top technology company and top five, regardless of industry, out of the 440 in the world. So I think that's a true testament to the fact that Howard's belief in people match mine.

[Interviewer]

So let's say I'm a founder of a company. It's small at this point. It's 10, 20 people. We're a B2B company. We make some software, we sell it to other businesses, and I want to become a great enterprise company. What's your advice?

[Bill McDermott]

To me, the most important Thing is, you have to stop thinking about yourself and how great your tech is and how much you're so proud of your tech, because nobody cares as much as you. What you have to understand is what somebody is trying to do with their strategy, division and dream they have for their company. It can be tactical, where it might be an efficiency or productivity play, or it can be strategic, where it might be a business model, innovation play, and they're going after a new market or thinking around corners that they haven't even crossed yet. It could be a lot of things based on what your product is, but they are hiring your product to do a job. And the most important thing you can do is understand your product and understand the job that they would likely hire your product for. So on the outside looking in, you already have a perspective of where it all fits. Because if you don't go to that table having a prescriptive notion of what might be possible, delay the meeting until you get your act together. Because a lot of times people go into the meeting and they can't possibly read the room because they have no idea what the room might even think of for their product. So everyone's dancing around thinking about, well, where does it fit in?

[David]

Never go in with just like, oh, this is my off the shelf sales pitch. You need like to understand the problem the customer has before you walk in.

[Bill McDermott]

Exactly. They're hiring your tech to do a job and they're not going to hire your tech to do the job unless they have some heuristics on an expected outcome from this relationship, meaning the time, the treasure and the value. And I do apply the concept of design thinking in my mind to these meetings, which is, do we have the big idea? So you know, this idea of the dream, what is the big idea? And then there's the feasibility, like, you know, can we actually do it in a timeframe? And a return that makes sense. And ultimately viability, you know, is there a business rationale or business case to get something done? And usually you know, those things, desirability, feasibility and viability are very manageable. But you have to know your business and you have to know the customer's business and you have to understand what they're trying to achieve. And there's a lot of research that needs to go into these meetings. There's a lot of things on the outside that you should study before you get on the inside. And for God's sake, when you show up, read the room. Because usually whatever you thought the meeting was going to be like, when you first, meet the human on the other side of a table. It's going to change.

[Interviewer]

You don't know what meeting they just had. You don't know in what way. Their headspace just got frazzled.

[David]

So how do you like to do this? I mean, again, your best note. You walk into a room. How do you like to read the room?

[Bill McDermott]

I just want to be in the room with you, and I'm extremely comfortable in those settings. And I wonder, how you doing and what's on your mind today? And tell me, you know, how's your business going? Tell me your story. I noticed something, you know, before I had come in about a different topic. And it could be, and it usually is, completely unrelated to capital interests, but it's much more tied to human interests. There are philanthropic things people do. There are social things people do. There are all very knowable. Before you walk in the room, precisely there are hobbies that people have that they find great interest in. You know, don't jump in to the deep end of the pool. You can walk. You can walk. You know, start out in the kiddie pool and work your way up to the deep end. But people have this tendency to lay the PowerPoints out there, which I totally am against, and jump right in. Give it a few minutes to warm up before you go into these things.

[Interviewer]

Do you ever read the room and your answer is, my product has no place here. And decide we're not engaging in any sale today.

[Bill McDermott]

That would be an extremely rare occurrence.

[Interviewer]

I suspect it. All right, so let's bridge it to service. Now, in your mind, what is the customer hiring your cool tech to do?

[Bill McDermott]

The most important thing that the customer needs is they need to automate the way work is done. If you look at 20th century companies, I came in here to help make servicenow the defining enterprise software company of the 21st century. And people would say, what do you mean by that? And why did you say that? Because most of the architectures that we work with in today's enterprise have been out there for six decades. And the 20th Century Corporation was designed in functional silos. You had finance, you had hr, you had sales, you had customer service, you had engineering. But these are all silos of a corporation. In those silos, they heavily invested in silo specific technology. My finance system, my HR system, my manufacturing system, my sales system, engineering, and so forth. When the iPhone moment hit, it came after the Internet and the move to the cloud, it came into view with the iPhone in 2007, and we all had the iPhone moment, which set off the rage for mobile business. And they started to work more and more across these silos and they realized, wow, I can't execute my business processes properly because my system is built only for finance. But I need to engage sales. I have a people equation. I might even have a question for the legal department. The engineer might be building a product, the salesperson might be selling it. So I need to look at processes. Order to cash, procure, to pay, hire to retire. I mean, these are normal phrases that you'll hear, but the real issue is they're working across these departments. These systems have entrenched themselves so deeply in these companies that big scale executives almost don't want to touch it.

[David]

These are the canonical systems of record. Your CRM, your erp, your HR system.

[Bill McDermott]

You got it. And the CEO is busy. And these are landmines that they know have a lot of complexity associated with them, a lot of cost associated with them. And they are.

[David]

And by the way, each of those many, many tens of billions dollar market cap companies associated with providing them.

[Bill McDermott]

Exactly. And these companies are all excellent companies in their own right. My issue is not that they're not excellent at what they do. They wouldn't be as big as they are if they weren't excellent at what they do. My point is, where do we come in? Because they're going to do their thing and we're going to automate those business processes across all of those silos. And in a sense, my way of looking at it is make all those silos better. In fact, I think all of them, if they chose to strongly push for ServiceNow, would make their systems more relevant. Because then they could say, hey, I have a ServiceNow platform that resides above what I'm doing at the system of record level. They highly cooperate with me, they integrate with me and my data can be activated in that workflow. And with Agentic AI, you can use ServiceNow as the control tower for that work, how it flows, the connection to that data. They don't care if that data is in a hyperscaler cloud or it's in a data lake or it's in a system of record. They have Raptor db, which is the best database in the world that connects with structured and unstructured. They integrate with all the large language models and they can run in any hyperscale or cloud too. So by using that as the control tower or the AI for business transformation, we can actually make our story stronger. Because if your story is you paid me several hundred million to implement this system and now I'm back for several hundred million more to re implement this system. And it's the same basic system with the same challenges it had 50 years ago. One might say that's not the best way to use my capital.

[Interviewer]

And you're not saying it, but I'll say it just for listeners. You're referring to ERP implementations.

[Bill McDermott]

It could be ERP or CRM. It could be CRM. It could be all these things that they're not bad in their own right. But what you have is you have these systems which are in a department many of these big companies have. You might find this interesting. Up to a couple hundred different instances of these systems in each of these silos. Sometimes you'll have an HR system for every 1,000 employees in the government. Sometimes. And you might say, how can that even happen? Well, think about six decades and every four years you have a new administration that rolls in or some new leaders that roll in and every one of them wants to do it their way. The old stuff never went away. And so the mess just gets worse. And then you put agentic AI into the equation where people are like, hey, buy my agents too. So let's re implement the new version of something that's been out there six decades and let me give you the agents that are going to make it work better. And so now you have agents on top of something that's been there for six decades, adding even more complexity to it, because those agents are going to have to work with the other agents in the other departments, just like people have to work with the people in the other departments. And who's going to do this? Well, that's why we design a business that not only integrates the departments and the people, but also the agents. And so we think we're on the AI platform for business transformation. Road to inevitable success. Because it makes so much sense, this makes so much common sense that I almost sometimes feel like, wow, how many times do you have to actually say it before it gets through to all these C level executives? That you don't have to go on a forced march. There's a new and a better way.

[Interviewer]

Okay, Bill, this sounds so obvious and correct and such a clean story. What is the hardest part of selling ServiceNow?

[Bill McDermott]

The biggest thing is getting to the corner office. Because once the CEO hears this, they actually get riled up. Because I had one on the phone yesterday, which was the end of my business day, which was very interesting because I had met him at a meeting last week in Washington and he asked me for a talk and we had a talk and I explained what's going on and he said, yeah, I'm so frustrated with the amount I put into that and it's been several years now and it's still not done. And then my HR system is so unacceptable because my users don't like using it and all they do is chronically complain and I don't have visibility into my people, their training, their onboarding and how they're actually using the system in a way where they don't need the HR department, they don't need 800 numbers, they don't need to be looking around for information. They should have a single view of anything that they have a question about. In my company we have one platform where you can sell, fulfill and service, not several different platforms with hundreds of instances depending on what country and what industry you're in. And you just think about this level of chaos and I've got a simple idea and common sense and simplicity is what this story is all about.

[David]

It sounds like from what you're saying, service now has to be a CEO sale. The CEO is the only one who's going to be able to see across all these different.

[Bill McDermott]

They're the one that's going to be able to see simple. As DaVinci once said, the ultimate form of sophistication is simplicity itself. Only the CEO has that clean glass purview to a clean glass platform that does everything I just said. But there is good news. Even if it happens on a departmental level, IT, Finance, HR, Sales, Engineering, you can tie it together with ServiceNow like a Lego set so you can't make any mistakes. In the end, you get to the same place where you're going to have one clean pane of glass. That's your AI platform for business transformation. You're going to be able to integrate all your procedures. You're going to be able to put on Raptor DB the connectors for all your data, structured and unstructured. You're going to be able to integrate with all your systems of record flawlessly, the top 700 in the world. And you're going to have a beautifully run, exceptional company. Why do I say the CEO is the preferred option? Only because they're paid to have a broad vision of the whole enterprise. They're paid to do what's right for the enterprise, the people, the customers and the shareholders without any appendage to the past. Whereas underneath that everyone's well meaning, but they don't look at the world through the eyes of the CEO. That's why companies have CEOs, but we work with the CTO, the CIO, of course, the head of data, the head of AI, the head of all of these departments. But we try to also use those relationships to work with each other and also to bring the CEO some good news that hope is on the way.

[Interviewer]

There's another way that you're unusual as a CEO and I think ServiceNow is unusual as an enterprise company. You care about brand in the way that some of the best consumer brands in the world care about brand. Where does that come from and why do you feel that that's an interesting strategy for a B2B enterprise company?

[Bill McDermott]

Yeah. To be a brand led company is what it's all about because the brand is your identity, it's your DNA, it's who you are and it's really what you're trying to convey to a broad group of customers in a global economy in the simplest way possible. And our dream tagline for the brand is the world works with ServiceNow. And that was my way of tying it to the defining enterprise software company of the 21st century. But you can't be that unless you're the world's company and you have to make things work. You know, when ford works with ServiceNow, the world works because Ford does so many things for the world. So always seeing the world through the customer's eyes and what they're trying to do and being a brand led company that has the empathy for the customer is what we want it to be all about. And in our latest iteration of the story is some really cool commercials out there with Idris Elba. You know, Idris is our brand ambassador and he will be for a multi year level relationship because he believes in what we are doing and we're working with him on the reinvention of Sherbro island, for example, and really bringing that tech, know how water systems, things that can create a more prosperous nation. And we have a project going because that was very important to him because his dad was from Sierra Leone and he wants to give something back. So it's not just about you're a brand ambassador, it's that you believe in the brand and what the brand can do to improve people's lives. And that's really what it's all about. And in a new ad you'll notice that Idris is talking about AI and AI in every corner of the enterprise, which is talking to the silo mess that I took you through in this conversation. We're making the point we can bring it to every corner of the enterprise and no one else can, which is absolutely true. So I think being a brand led company that makes great products, the best products in the world, that provides the best service in the world, that brings the best team in the world to the relationship and that has the most prolific ecosystem standards, it's not enough just to have partners. You have to have partners that are well trained, that are committed to the brand, that stand for the same shared values and common goals as you do at ServiceNow. And all of that has to come together to make a brand extraordinary, to make the brand the best in the world. And so my dream is in the not too distant future, you already see us climb on the leaderboard toward the best brand. But I believe that ServiceNow has the potential to be a top 10 brand. I could say number one, but I have to say top 10 because in this world of consumer brands and the notoriety of consumer brands, most enterprise companies aren't well known.

[David]

This is not the standard playbook for a.

[Interviewer]

What do you think the best existing enterprise brand is?

[Bill McDermott]

Well, I mean, it wouldn't be too hard to give Apple a lot of credit because of the magnificence of the experience that you have with the Apple device and the feeling that that brand gives you.

[Interviewer]

But it's the power that comes from their consumer side that like of enterprise companies.

[David]

Microsoft, but I mean, Microsoft again or Amazon. Right. Like, you know, yes, they have these great brands, but like they have the consumer side.

[Interviewer]

It's the consumer side.

[Bill McDermott]

They all have the consumer side. And everyone you mentioned is fantastic. Google is a great brand, Amazon's a great brand, Microsoft's a great brand, Apple's a great band. And all of them do have an enterprise side. The reason I probably just came with Apple a little bit is just from my own bias because I have two in my pocket and whether I'm doing business or I'm on my private time, I'm somehow associating with that brand. And then that brand can take you into the Apple experience and many different ecosystem partners that reside on the iPhone. So this is an enormous, complex ecosystem that they have made look and perform in a very simple way. So I think that they deserve a lot of credit for that.

[David]

One of the areas I wanted to ask you about this is partnering ServiceNow. You hear Jetson and Nvidia talk about ServiceNow all the time. You guys are a great partner at the enterprise. I'm realizing there are conversation really necessary for your strategy.

[Bill McDermott]

Right.

[David]

If you're a CRM player, you're not really incentivized to be a great partner. You want to displace the other CRM. What you guys are trying to do here is convince all the other big enterprise software companies out there that like, no, no, no, when your customers work with us, we make you better. How do you do that as a CEO to convince those CEOs that like, oh, no, I'm not your enemy, right?

[Bill McDermott]

Well, I'm not so sure I've done that. Not because we are perceived as an enemy, but they perceive a zero sum game in the sense that they probably think, well, if ServiceNow is doing extremely well, budget dollars are moving to them. That would have otherwise been mine. And I don't subscribe to that because I think the more closely knitted tech companies can be, the more the prize is for the customer and the more that's left over of those winnings to be reinvested back into tech, where that rising tide can literally lift all boats. And it's a very small incremental piece of the value you deliver for the customer relationship that we actually get. And that they should be very happy to see happen because again, it's going to make their system much more relevant and much more current. And again, I'm not suggesting that those aren't fantastic companies. They wouldn't be as big as they are if they weren't. But I tell you guys, the AI revolution is a different ball game and it's moving so quickly. And there's going to be a few platforms that really matter and the ones that really matter are the ones that are on the side of the customer and they're going to have to do things that they didn't used to do. They're going to have to get used to the fact that ServiceNow is a company on the move and ServiceNow is on the side of the customer.

[David]

You're loose.

[Bill McDermott]

We're loose. We're loose. We're on the move.

[David]

I love it.

[Interviewer]

Well, Bill, the only other question that I sort of have here is do you ever find yourself understanding a customer's pain point so specifically where you say, ah, we've got a feature for you, there's an amazing feature of our product. Or do you think that that entire way of selling is just wrong and that you must focus on the dream instead?

[Bill McDermott]

Well, it depends. Because you could have a financial services company as an example that has a regulatory challenge that is extremely pressing to the CEO. And in that moment in time, if that CEO is worried about the regulators, the feature or the capability of your platform in that specific domain might be incredibly important to just focus on because sometimes people are interested in the big picture and they want to hear the solution, the platform story, but other times they're completely compelled or preoccupied with a specific issue. But notice I didn't talk about the feature. I talked about the regulatory environment and what they're absolutely focused on. So in that case, you would come. Situation, situation, problem, implication, needs payoff isn't that I understand the situation. This is the problem. The implication of that problem is if the regulators don't buy into the way you're running the company, we have a company at risk in billions that could be on the table. And the needs payoff is this little feature comes in there and fixes everything. And I can have it up and running for you quickly, my people, your people, and this is what it's going to look like when it's done. But all that said, you better deliver. So the thing about the very nice compliment that you pay me, Ben, is that you can't find anyone where I made a promise and I didn't keep it. And what's interesting about, you know, having a word that matters on the street is it's not like when I show up, they think I'm there to, like, do some knitting exercise. They know why I'm there, but they also know that if I have something they can hire to do a job and we can have a common interest in an outcome and I can move my version of my little world in heaven and earth to deliver for them, and I do deliver for them, then we use their time wisely and we did the right thing for them and for ServiceNow and for everybody that cares about this franchise. So it's a win win. It's a virtuous cycle world. Everybody should be aggressive, on the loose, on the move. And guys, I got to tell you, the most important thing is the bureaucracy has to stop. You know, the canned this and that has to stop. But at the same time, you can't leave people behind. I think what we're going to remember most about the era we're in right now is did we put the people first? Did we recognize that they came to work to win? Did we give them every opportunity to be trained, to learn, to be certified, to hone their craft? Did we give them the tools? And also did we celebrate the joy of work? I love work. Clearly.

[David]

Clearly.

[Bill McDermott]

But work for me, work for me was like such a beautiful thing. You know, I can remember making 265 an hour. I can remember making 20 bucks for 20 hours, work on a New Year's Eve at Amato's Italian restaurant in Amityville with a tuxedo on. As a floater, I can remember a lot of things. But what I also remember is all the great memories I have was moments like this where I was with other people. And a lot of people wage the argument, like, hey, man, you gotta get back to work. You gotta get back to the office. And what is really happening out there is Covid did a lot of damage. Covid convinced people that they don't live to work, that they work to live. And that's a big change in society. But what I did is I put out a LinkedIn story, you know, on my Monday Motivation. And I basically said, the biggest problem that we have in society today is the destruction of time. And what's happening is people are burned out, but they're burned out for the wrong reasons. It's not where they're domicile. It's not necessarily where their body is. It's where their mind is. Their mind is stuck inside a device. It gets in there early in the morning, and it doesn't get out of there until almost the next morning. And so the mind isn't resting, but also where they spend their time is very isolated. And to me, the reason to get with people, ideally on the street, running around, helping customers win, is to be with other people. Because I've never met a person yet that loves to talk about their golf score without mentioning the other three people in the foursome that saw them do a great job. We are social people. We need to be with people. We need to celebrate people. We need to celebrate the joy of work again. And that's what's at stake here. Building great companies that have amazing cultures where people truly want to be with the people and they want to learn and grow with the people and build that bond of trust. You know, trust is built in drops. It's lost in buckets. And the only place to find it is with your family, your friends, and your colleagues at work. So I don't think you're going to find it in the dead space of a device, because if that's the centerpiece of your world, you're going to have a lot of broken dreams, because in the end, the device will still be sitting on the table and it won't miss you.

[Interviewer]

So close to AGI, but not there yet. Yeah, got it. Bill, thanks so much.

[Bill McDermott]

Thank you very much. Appreciate it, David, thank you. Thank you so much. Appreciate you guys. Thank you.