Lessons in leadership

By: | Published: January 11, 2015 1:20 AM

Winners Dream is all about Bill McDermott and the things that one can learn from the CEO of SAP America, the world’s largest business software giant

Winners Dream
Bill McDermott with Joanne Gordon
Simon & Schuster
Rs 699
Pp 324

Madan Sabnavis
WHEN BILL
McDermott walked into SAP America in 2002 as president and CEO, he encountered a disinterested workforce. For a person of his dynamic disposition, it was a challenge and one that he loved. He worked towards motivating the staff and reaching an impossible goal of achieving a 10-time increase in sales in less than three years. How he did it and how he managed such targets in his earlier job with Xerox form the crux of McDermott’s book, Winners Dream.

Two themes emanate from his storyline—broadly about leadership—which, as per McDermott, is about changing minds and mindsets. The first is that the customer is the most important person for any organisation and, for success, one has to work towards obtaining and retaining this entity. The second is the staff and management. A true leader is one who knows how to take them along and also provides incentives so that they work better.

The customer is always right and hence is the king. This is always a dictum to follow because, at the end of the day, one is selling a product and the buyer needs to be convinced that he is getting a good deal. McDermott’s own stories of how he managed to placate and sell photocopying machines to disgruntled people are quite interesting. This means going close to the customer and understanding his requirements, which, at times, will also mean knowing him personally.

In fact, the way McDermott describes how he set about his own business of running a deli—in a locality that had a lot of competition—is quite amazing. How does one break into such a market? McDermott adopted a simple strategy of identifying his customers and putting them in three buckets.

The senior citizens wanted home delivery, which others did not provide then. By providing this service, he captured this chunk of the market. Second, he observed several blue-collared workers dropping in while going home on a Friday, the day they got their pay. McDermott provided credit to these people for extended time, so that they came back to him. More importantly, he states that he did not have a single default in payment, as these people got emotionally attached to his deli. Third, he observed that children were not trusted in other shops, where they were made to stand in queues to get in, as there was fear that they would steal. McDermott treated them with trust and dignity, and opened his doors to them, which got him a loyal clientele.

When McDermott moved on to working with Xerox, Gartner, Siebel and SAP, this objective was always at the forefront, which enabled him to meet with success everywhere he went, including countries like Puerto Rico, which no one could believe would buy copier machines. McDermott’s motto is that it is the customers who determine whether or not any company should survive or not. The strategy, simply put for a salesforce, goes with the acronym ‘SPIN’. When dealing with any customer, we need to evaluate the ‘situation’ and ‘problem’, which are the S and P of the issue. We then need to articulate the ‘implications’ and the ‘needs payoff’ to close the deal.

Let us look at some of McDermott’s advice. First, we should know everything about what we are selling and hence, when doing a deal, should know where to stop. Second, appearances are important and hence the entire personality of the salesman matters. The way they talk, walk and give that final handshake all go into being an impressive and effective salesman. Third, one must do everything to please the customer and make him feel important. The list goes on in this way.

The second theme concerns managing and leading people. Here, McDermott shows how he focused on incentivising the people he worked with, which involved lavish holidays in fancy places like Hawaii, which helped to keep them motivated. More importantly, it got out the best in everyone, as they competed for these rewards. The belief is that if the company takes care of the top performers, they will take care of the company. The sales team was flown to outstation destinations for sales meetings to make them feel important, which also helped build camaraderie.

McDermott also has lessons for how we make a successful team and his belief is that leadership is the art of developing followership. This one is quite crisp and succinct. Build a team and have a plan drawn up for everyone. Make sure you have the best talent. Cross-pollination of talent, role-play, role modelling all go into building this energetic team. Empowering people means that you trust them. By delegating responsibility, people will do their jobs and, more importantly, perform. The clue lies in bringing about effective execution and going beyond just reporting news and instead ‘making news’.

McDermott quite interestingly sums up everything to do with successful employees with five terms: success, accountability, professionalism, teamwork and passion. These values are from his own experiences, which he has applied to make his jobs successful. This will hold for all companies and for all employees because, at the end of the day, one needs to have these qualities.

Winners Dream is an autobiography of a very successful leader who knew from the beginning where he wanted to be. His passion for leading a team and being the best got him into Xerox and his relentless pursuit for excellence took him to the top. Never missing a chance to learn and relocate, his dream of reaching the top took him exactly where he wanted to go, which is quite remarkable. Coming from a very ordinary struggling family, his rise to fame is now legendary. Though the narrative sounds a trifle egotistic, it is digested easily, as what McDermott says makes a lot of sense. Mapping your goal to its achievement with unbridled passion is the mantra to be pursued.

Madan Sabnavis is chief economist, CARE Ratings

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