The Quotable Bill McDermott: 10 Insights from CEO of Soaring ServiceNow

To truly understand the ServiceNow phenomenon that’s underscored by the record-high market cap of $115 billion it soared to yesterday, the best place to start is inside the relentlessly passionate, optimistic and customer-centric mind of CEO Bill McDermott.

(On my weekly Cloud Wars Top 10 rankings, ServiceNow recently jumped up to #7, bumping IBM down to #9.)

Many CEOs use earnings calls to deliver little more than a slew of numbers and a handful of absurdly constrained comments about the marketplace. Some CEOs use them as auditions for future careers as hypnotists.

And then there are a handful—a tiny handful—that drop all pretense and defense and artfully, elegantly and powerfully share their visions and dreams within a focused narrative that explores not so much what just happened but instead what is possible.

Microsoft CEO Satya Nadella is exceptionally good at this. No doubt Nadella’s ability to inspire his company and his stakeholders and his customers to boldly reimagine their ambitions has played a huge role in his company’s ascent to a market valuation of $1.83 trillion—trillion—and the #1 spot on the Cloud Wars Top 10.

But as artful as Nadella is, I don’t think even he can spin a tale of big dreams and unlimited possibilities the way Bill McDermott can.

Refreshingly unafraid to not only say what he believes but also reveal what he feels, McDermott is fully comfortable talking free cash flow and ACV and ROI, and he does a pretty nice job with the RPA and ITOM and ML and AI stuff too.

But where he truly stands out is when he pushes himself and others to the limits of what they can dream, what they can imagine, and what they can achieve. Free of fear, fired by optimism and fueled by his belief in what people can achieve, McDermott is recasting the confines of the stuffy old world of enterprise software as ServiceNow romps freely across the tired boundaries that were designed for a business reality that no longer exists.

You can get a very good flavor of that rare style in this 1:1 conversation I had recently with McDermott, captured in an episode of our Cloud Wars Live podcast.

And McDermott offered another all-access glimpse inside his head and heart in ServiceNow’s Q4 earnings call late last month. I covered a few of the highlights from that call in a recent analysis called ServiceNow Vaults to #7 on Cloud Wars Top 10, Knocks IBM Down to #9, in which I promised to share a more-expansive view of McDermott’s one-of-a-kind commentary.

I’m delighted to deliver on that promise with this set of powerful perspectives from a guy who’s not afraid to tell the world about his dreams—and who has, over the past 16 months, turned ServiceNow into a global phenomenon with both customers and investors.

1. The Big Picture

“Throughout the year, we led with courage and conviction. We took care of our team, our customers and our communities. And most importantly, we led with ServiceNow’s purpose to make the world of work, work better for people. We strive to see the world through our customer’s eyes with empathy to address their needs. The workflow revolution is happening, and the pandemic is accelerating digital transformation.”

2. A Profoundly Changed World

“Businesses are changing the way they operate. They need to deliver fierce customer loyalty and deep employee engagement to win. It’s all about people: empathy at mass scale as the business imperative of the 21st century.” 

3. Inexorable Forces of Disruption

“The secular tailwinds of digital transformation, cloud computing, and business-model innovation have all intersected at a perfect moment in time. A paradigm shift is happening worldwide. In 2020, for the first time in history, we saw digital-transformation spending accelerate despite GDP declining globally. Digital investments are at an all-time high and are expected to continue growing. According to IDC, worldwide digital transformation investments will total more than $7.4 trillion by 2044. The digital economy is firing on all cylinders.”

4. The Power of Speed

“St. Jude Children’s Hospital has been on a journey to accelerate progress toward finding cures and saving children. In 2020, COVID-19 created a significant headwind to that mission. With much of the hospital staff required to work from home, the need to digitize manual workflows became more important than ever. The hospital leveraged ServiceNow’s low-code App Engine and innovation to integrate disparate systems and build custom end-to-end workflows, ultimately allowing them to ensure seamless delivery of clinical services. In under 4 weeks, the ServiceNow solution was implemented at St. Jude’s Children’s Hospital and everybody was moving toward their goal…

“Customers are going live on the new platform in days, not months, making a difference for people now, not next month or next year. Now!”

5. Ultimate Goal: Beautiful Experiences

“One of the U.K.’s big four banks is using multiple ServiceNow products, including our purpose-built new Financial Services Operations product to help transform the way it operates and to deliver better customer experiences. The bank has seen a 70% efficiency and improvement of payment processing by integrating the Now Platform into its core banking systems. With ServiceNow, this bank implemented new automated processes in 60 workdays. In their words, employees moved from cut-and-paste swivel-chair manual processes to efficient, automated workflows. In one case, employees went from managing 10 requests an hour to 1,000 requests in three minutes on the Now Platform. That’s better experiences for people.”

6. Competitive Differentiation

“What we think is unique about ServiceNow is this platform. Think of it as the ‘workflow automation platform’ that comprehends all the opportunities with App Engine to customize things very rapidly like vaccine management, for example. It also offers the IntegrationHub, which enables integration of everything from RPA, process mining, API integration, process analytics, native mobile, contextual interfaces and all the other things that CIOs and leaders of businesses are counting on to create end-to-end continuity in the business… ServiceNow is the platform company for digital business.”

7. A Platform Company. A Solutions Company. A Suite Company.

“And that gives us such an advantage because we’re seeing situations where we can literally consolidate hundreds of systems to the Now Platform, take out huge costs, give the customer a great experience, and obviously not put so much pressure on human capital because people are only engaged when they’re absolutely necessary in the customer-satisfaction process. So you’re seeing a mass consolidation of all the old stuff to the Now Platform. You’re seeing IT, employee, customer and all the App Engine and Integration Hub opportunities really come together on one common platform, one data model, and one architecture

“So we’re now a solutions company. We’re now selling a suite.”

8. Integration, Integration, Integration!

“And with all this digital transformation, a lot of executives are looking back and saying, ‘Hey, why didn’t I get a better return on all I put into digital?’ And what they found is that about three-fourths of the digital-transformation projects didn’t give the yielded return on investment that they had hoped for, and the #1 root cause was integration. So as you think about the Now Platform integrating with 550 systems of record out of the box and all the collaboration tools, no matter which one the customer likes, and have that completely synchronized into the Now Platform out of the box, and you’re up and running in days, it’s kind of an attractive value proposition to our customers and even noncustomers that want to jump on board.”

9. The Path to $10 Billion

“So you’re seeing now a world where the Fortune 2000 gives us an extreme opportunity for growth beyond $10 billion. Look at our brand in industry; in geographies; in personae; in same-account revenue growth; in net-new logos… And look at our four businesses that we already are in as multibillion-dollar opportunities. And then don’t forget the platform. Because I think more and more, as the citizen-developer concept takes off with ServiceNow, you’ll find us in locations that go way beyond the Fortune 2000… We’re in the early days here.”

10. Reimagination—for Customers and for ServiceNow

“We’re into business-model innovation, where great companies like Disney or AT&T are rethinking their business model entirely. And they’re capitalizing on the streaming rage, and they’re coming up with subscription business models that reinvent the customer experience and give them net new businesses. ServiceNow is in that to win, and I think that TAM is absolutely unbelievable.

“The other TAM that’s pretty interesting that nobody spent much time talking about—but it’s one of the reasons I think ServiceNow’s future is so bright—if you just take paper-based processes that are clogging up all of these companies and you digitize them to the Now Platform. There is a well-known bank out there that says the U.S. market alone is a $280 billion market, which maybe globally that’s a $400 billion market. And then I think this platform business, I really see an amazing, amazing future for the platform business.”

Bonus #11: “We Can Truly Unleash Humanity.”

“I also think that with the ML and the AI movement that we’re on, Element AI was kind of the finishing touch of four M&A moves that we made, which was really about acquiring not just patents and thought leadership, but real enablement of the Now Platform so we can truly unleash humanity in ways that heretofore were not possible. And together, the computer and the human now can do things in terms of decision-making and removing soul-crushing work that nobody really wants to do.”

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