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Brief thoughts on Bill McDermott as CEO SAP

Den Howlett Profile picture for user gonzodaddy October 11, 2019
I've had the privilege of meeting Bill McDermott pretty much every year since 2010. Here's my assessment of his time and the legacy he leaves behind.

bill mcdermott via CNBC
Bill McDermott ex-CEO SAP (Bill McDermott via CNBC)

I remember the first time I met Bill McDermott. It was at a SAPPHIRE - probably 2010 - not long after he and Jim Snabe were appointed co-CEOs.

I remember coming out of that meeting shaking my head in an effort to get Bill out of my head. He has a way of drawing you in so that when you're in the conversation, it's as though you're the only person in the room.

I recall it was at a time when the company (and its customers) was recovering from the near disastrous insistence on price hikes in maintenance fees, poor performance and a disgruntled engineering team which, when combined, ultimately cost Leo Apotheker his job as SAP's CEO. 

Even so, McDemott took up his role with gusto and, as what I came to describe as a 'glass and a half full' approach. Despite his relentless marketing of the company, you couldn't help but get caught up with his infectious ability to see the world through the eyes of an eternal optimist who made good results sound intergalactically spectacular while finding the positive in any negative. 

We did not always see eye to eye. I wanted to see SAP move quickly towards a pay-as-you-go model to accompany its cloud ambitions. I thought that SAP could win over customers with hundreds of small apps being sold at consumer prices such that even if I was 80% wrong, SAP could capture billions in value.

At the time - we're talking 2011-12, SAP was focused on making HANA the centerpiece of its growth strategy with McDermott insisting that the HANA pipeline was filling at a rate of €10 million a week. Some of us took that with a grain of salt but on reflection I can see why McDermott didn't care much for my suggestion. Earlier this week I heard that SAP has finally got pay-as-you-go religion for at least some of its products as a replacement for its bought credits approach. 

SAPPHIRE Now under McDermott's leadership was always a surprise. He tried to bring something fresh to the table each year but it didn't always work out. Some of the attempts at running the keynotes as mock TV shows just didn't work. Others where customers were brought on stage seemed overly contrived. But through it all, McDermott's optimism and enthusiastic persistence were apparent and it generated enough excitement that people wanted more. 

Despite our occasional differences, I always found McDermott to be gracious, polite and even-tempered. Martin Gillet sums it up well with this Tweet:

Gillet is referencing work that a group of us performed in our role as SAP Mentors in 2010. We wanted to change the way SAP certifies people who implement its products. McDermott listened and ensured we got a hearing with the education folks at SAP. Unfortunately, and despite best efforts, the changes we felt were necessary never came to pass. Today, people like Jarret Pazahanick refer to the outcome of SAP's continuing certification practices as The Wild West. Should the responsibility for inaction be placed at McDermott's door? No. 

CEOs in large companies have numerous calls on their time and delegate to those they expect to both make recommendations and act. In this example, while the case was well made and supported by facts, SAP chose to stick with a formula it believes works. Given Jennifer Morgan's remarks about earning customer trust, it may be possible to revisit this topic. 

On other occasions, McDermott could act quickly and decisively. For example, the long running S/4HANA adoption topic remains bifurcated between the headline sales figures and the mysterious go live numbers but at one session with McDermott, a small group of us explained why roadmaps are so essential in the buyer decision making process. We went on to say that there just wasn't enough to help customers make the right decisions. That is not to be confused with making the business case. That's a pre-requisite in its own right. The penny dropped and McDermott got on the case.

When we weren't meeting in person, McDermott and I would, on occasion, discuss earnings results or exchange emails on topics of mutual interest. In that sense, I am grateful that he made himself available to someone who doesn't fight shy of being sharply critical when the occasion demands. I'm equally grateful that we never ended a conversation on a sour note. 

Others may disagree but Bill McDermott has, by most measures, been very successful as CEO. He grew the company's revenue dramatically and, from all accounts, created an inclusive culture that now sees, for the first time, a woman as co-CEO at the company. He leaves SAP in better shape than when he took on the top job and departs at a time when the company is signaling strong Q3 results with a restatement of expected outcomes for the full year.

He's going out on a high while providing a helping hand to his successors for the next couple of months. I wish him well. 

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