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Kellogg School Professor Tony Paoni (center) and Kellogg students listen as William McDermott '97 (right) explains the dynamics of market leadership in the technology sector. McDermott, CEO and president of SAP America, visited the Evanston campus May 13 as part of the Kellogg Executive Speakers Series.

Think bold

Tough times call for tough people, says Kellogg School alum and CEO

By Matt Golosinski

5/13/2002 - Reach deep into your soul and be bold again, because tough times don’t last — tough people do.

The advice comes courtesy of William McDermott, CEO and president of SAP America, who brought his enthusiasm and leadership insights to an audience of Kellogg School faculty, students and staff as part of the Kellogg Executive Speakers Series.

McDermott, a 1997 alumnus of the Kellogg Executive Master’s Program, spoke in Evanston on May 13 about leadership in the technology sector, encouraging students to “be bold again.” The former executive vice president of worldwide sales operations at Siebel Systems recommended corporate executives embrace what he called “authentic leadership,” which he said must come from “the special story of the individual.”

“Authentic leadership means just being you and letting it rip,” McDermott explained. Real leaders speak from the heart and avoid “canned speeches,” he said, adding that he considered both knowledge and passion keys to his success, but regarded passion as perhaps most essential.

McDermott’s theme throughout his 45-minute address and subsequent Q&A was boldness, and he drew upon his own professional experiences for illustrations of how leaders might channel their passion into their work.

He recalled his efforts as a 17-year-old entrepreneur who successfully opened and operated a New York delicatessen. Being successful in this endeavor required him to do what he said has since become an “obsession” for him: focus on customers.

“I’m obsessed with customers,” said McDermott. “If you’re not focused on your customers, you’re not relevant.”

One way that SAP America achieves customer focus, according to McDermott, is by “being a trusted adviser and innovator” to its clients.

McDermott regarded with skepticism those firms who have cut back or stopped recruiting and training because of the economic downturn. He painted a ludicrous picture of how such penny-wise-but-pound-foolish thinking can impact strategy.

“I know, let’s have 4,000 sales people running around a company not knowing what they’re doing. That’s a good idea,” McDermott quipped.

In fact, good leaders and their firms should continue investing in customer service, said McDermott, noting that his company has done this and continues to focus on research and development despite the sour economy.

“Market leaders like SAP America address market changes by continuing R&D to produce best-in-class products, fully integrated product suites and packaged solutions,” McDermott said.

He also noted the importance of refining a firm’s leadership by bringing more talent into a company, especially in light of Gartner Inc. statistics that suggest 50 percent of today’s software companies will vanish within two years.

“Look for more consolidation among firms, with market leaders getting bigger and better while many other firms fall away,” predicted McDermott, former president of Gartner, the technology research and advisory specialist.

“These are not easy times, and it’s not easy to be bold, but that’s what true leaders must do,” McDermott concluded.

SAP America is a leading provider of e-business software solutions. Founded in 1972 and headquartered in Walldorf, Germany, SAP claims some 12 million users for its products and services.