Tuesday, December 02, 2014
Winners Dream by Bill McDermott (Book Review #113 of 2014)
Winners Dream: A Journey from Corner Store to Corner Office
I received an advanced copy of this book from Simon & Schuster via Goodreads for the purpose of reviewing. Opinions are my own.
If you've read Peter Thiel's Zero to One this year, then you'll note that McDermott is a Peter Thiel character-- one in which hard work and determination determine the outcome rather than luck. It's a story of someone who worked hard for success and got everything he ever wanted and more. McDermott writes "my humble hope is that my book furthered the pursuit of your own winner's dream."
Still, the SAP's CEO benefited from the luck of having parents who were always supportive and encouraging optimists. His mother always tells him "you can be whatever you want," and he believes it. His father is a coach and McDermott learns coaching and teamwork lessons from him. It's a very stable home, albeit not a wealthy one. McDermott does not delve into much of the difficulties or any conflicts with siblings. No personal sins, regrets, heartbreaks, etc. show up in the book. As such, it's quite shallow personally. The deepest he gets emotionally is enduring his wife's breast cancer and the death of his mother (fairly recently). He alludes to some sort of faith, but it seems opaque and not essential to his person.
But at least it's a book on leadership and management by a leader who has both led and followed. It's a solid look at corporate culture and how the right leader with the right message and personal integrity can galvanize support and motivate people to perform for a cause greater than themselves. My issue is that the cause is pretty much the corporation's sales and the individual's personal achievements. What good is it a man to gain the whole world and yet forfeit his soul? (Jesus).
Here's a look at the timeline:
McDermott was born into a lower middle class family, his father a welder. They moved from various apartments into a small home in Amityville, a home which often flooded. McDermott is a serial entrepreneur starting as a paper boy then as an ambitious stock boy for a grocer. He's willing to take on risk, he took out a loan to purchase a deli and leads it to greatness. There is very little mention of the overall economy during his formative years and I suspect he dodged a few economic bullets; his risks seemingly all paid off handsomely.
After attending a local college, he essentially talks his way into an entry-level sales job at Xerox (about the time David Kearns comes on as CEO with a new focus on quality), then leads Xerox in sales for the next two years. He is tasked with leading Team F at Xerox, expanding sales in a new territory and taking that region to #1.
McDermott travels on his salespeople's calls, coming up with innovative ways to motivate but not breed competition. He constantly focuses on how it's a team game. Once one employee has hit his sales target and earned his vacation/bonus, McDermott assigns that employee to work with another until everyone hits their targets.
McDermott then gets asked to look at the Puerto Rico/Virgin Islands branch, which is 64th in the world for Xerox and in bad need of a turnaround. He moves his family there, aggressively learns Spanish, while creating a new culture in the office. He takes the region to #1 in sales growth, again being the "winner," as he sees it. Xerox moves him to Chicago to turn that region around, which appears to be one of the more difficult tasks in the book. As he works his way up the corporate ladder, he begins to chafe under the traditional Xerox mentalities that he feels is holding the company back. He is constantly reinventing Xerox's marketing in his own regions/departments, pushing the envelope of their business model.
I looked up Xerox's stock price during this period:
- relative peak of 11.63 on 10/3/80.
- bottoms at 4.56 in 8/6/1982. (Kearns takes over as CEO in 1982, just before McDermott is hired.)
In 1983- Xerox buys Crum & Forster, starts Xerox Financial Services in 1984. McDermott later cites this as a bad move for Xerox.
- climbs to 14.11 8/21/87
- Stock tanks again to 4.85 10/26/90
- Rockets through the 90's to 62 on 1/29/1999, around the time McDermott finally left.
After McDermott jumps ship at Xerox, he ends up at Gartner and another company before landing at SAP America. He is recruited to turn the business around in 2002, and establishes his own vision for the company in 2003.
- SAP stock price bottomed at 10.28 on 10/4/02.
- Was 42.30 on Jan 2, 2004. This represents McDermott's value added. Under his leadership, the company broke a years-long streak of not hitting its quarterly revenue target.
At SAP, conflict arose among managers who couldn't live up to McDermott's new expectations, or just didn't like the job. People who didn't buy in left. 85% of his leadership team moved on. So, McDermott simply taps his own network to replace them, demonstrating the importance of building relationships and not burning bridges.
In February, 2010 he is named co-CEO and successfully co-manages the company with his counterpart friend. This is post-financial crisis and the company needs another turnaround. Like most tech companies, SAP lost most of their share price, as companies became scared to invest in new fields. McDermott is determined to embrace the Cloud and makes strategic mergers with other companies. "Trust is the glue" with the CEOS of acquired companies.
McDermott finally became sole CEO in May, '14. Recent press releases state that SAP is cutting about 3 percent of its 67,000 workers, or about 2,000 jobs as McDermott repositions it to develop more cloud-computing software. The company plans to hire enough new people to offset the cuts.
The key takeaways can be found as the subheadings within the chapters, which together reads like a compilation of every leadership text ever produced.
I have copied and pasted this list from someone else's review (with my additional comments in parentheses):
~Focus on the customer. If your customer isn't happy with your product or service, he will find an alternative, and you won't have a job.
~Find ways to distinguish yourself from your competition. Figure out what you can do that they can't.
~Goodwill gestures can help seal a deal by making your customer feel like you trust them. (This may mean bending the rules of corporate policies)
~Keep your word. (Trust is the glue that binds organizations and partnerships together).
~Give your employees audacious goals, it will motivate them.
~Keep alert to the culture around you. Serve food in a food culture, celebrate things that should be celebrated, provide perks and incentives that boost morale and solicit employee feedback about them.
~Build rapport with all people because it makes them feel valued and makes them want to help you. (ask "How can I help?" of both clients and co-workers).
~Don't discount yourself, your product, or your services. Have faith in their/your value.
~Identify your own goals and aspirations (and don't settle for a path that takes you away from these).
The importance of inter-departmental communication is also highlighted. You can't have sales people out promising something that your engineers and customer service can't deliver. McDermott found the red tape in order processing and human resources at Xerox maddening for this reason. Bureacracies are hard to manage.
I learned quite a bit about Xerox and a little about SAP. McDermott gave good examples of how he learned from other leaders, but generally he had no problems working for the bosses he had because they saw his aggressive energy and "let me do my thing."
I recommend this book as an example of leadership and good management practices. I would give it to individual students to show them what is possible. I would not assign it for a class or use it as a case study. In all, I give it three stars out of five.