How SAP’s CEO Bill McDermott Is Using Empathy To Build More Powerful Teams

What creates a successful company culture? Encouraging your employees to treat each other as family.

How SAP’s CEO Bill McDermott Is Using Empathy To Build More Powerful Teams

In 2013, SAP CEO Bill McDermott (he was co-CEO at the time) flew to Germany and called an all-hands meeting to let his 83,000-member team know that he had made a terrible mistake. SAP had failed to pay bonuses at the level expected by employees and he took it personally. “It’s unacceptable and I’m not going to let it stand.” He didn’t just apologize and promise to prevent it from happening again. He fixed it. He pledged to pay the expected bonuses (which totaled close to $75 million) and take the hit on Wall Street for taking the money out of their corporate profits.

When McDermott talks about his team, he uses the word “family.” McDermott links his purpose as a leader to his empathy for the struggle that so many working people face just to survive. He grew up watching his father work three jobs while caring for his sick brother. He understands what it takes to support a family, be it his own family or his extended 83,000-member family at SAP.

“I’ve lived at different pay grades and I know the more modest your pay grade is, the more you count on that bonus and the more you need that bonus. You plan around that bonus. That bonus pays off cars, it pays off education, it puts presents under trees.”

Empathy-Based Management

At 24, McDermott was given the unusual opportunity: managing an 18-member sales team for Xerox. It was the job that established him as a high-potential talent, in large part because of the remarkable performance of his team, which he says he led like their father, despite his age.

“It wasn’t only important to celebrate what the team had to accomplish as a family group, but it was also important to accomplish what you needed as an individual.” On a big board in their office, he had each team member share why they wanted to hit their sales goals and earn their commission. They wrote down goals like “I want to get a new car,” “I want to pay off my student loan,” or “I’m really interested in finally having an apartment in Manhattan.” It made the goal real for them and also created empathy between the salespeople.

That empathy enabled him to transform his group of salespeople into a team and a family. He had what he calls a “formula” that had each team member dedicate 80% of their time to achieving their personal goals but leave 20% of their time to help people on the team who were falling behind.

When someone fell behind, “all 18 of us went into that territory and helped them out.” Knowing the implications of failure for a team member, written up on the board, inspired them to ensure that they succeeded. “We don’t leave anybody behind on this team.”

Rather than use competition to drive results, which is the norm in sales, McDermott used empathy. “If we could just finally put all this collective passion together for the common good, not just the team but everybody on the team, we would be the best. It turns out, it worked every time.”

McDermott’s management philosophy is rooted in the idea that “none of us are as smart as all of us” and that everyone brings something they are “magical at” that combines to create an unstoppable force for good. “To think that I have a corner on the best ideas is ridiculous.”

This isn’t just about celebrating and helping to achieve goals. He also has found that the team needs to own the problems. He shares that as a leader “you can hold the problem to yourself if you want, but it’s kind of dumb when you have 83,000 people to share the pain with, why would you just keep it all to yourself?” It not only empowers your team and treats them with respect, but he shares that “it makes you feel so good just to tell the truth, get it off your chest in an honest way, but then put it into a plan.”

Using AI To Build a More Inclusive Team

Reflecting back on his early career, McDermott realizes that he had a bias to working with people like himself and didn’t always see the magic in everyone. But he came to quickly understand that great salespeople don’t need to be passionate and wear their heart on their sleeves. He recalls realizing that some of the best performers were the “quietest, most intellectually savvy, and least passionate you’ll ever meet.” He came to realize that you can’t “look just at the surface of an individual but give yourself a chance to really get to the heart of who the person is.”

McDermott sees bias as one of the greatest challenges to organizations and teams and has focused significant SAP resources to develop “a software application through machine learning that essentially eliminates bias in the workforce.” He knows that people want to do the right thing but it is hard to own your bias. The computer, he believes, is able to act rationally without that bias.

He took it one step further and has proactively created goals to employ people who are typically overlooked. SAP recently announced a goal to staff 1% of their workforce with people who have autism, as the company has found “there are immensely talented autistic people who do particularly well in some aspects of our business.” He wants them as part of his family.

The Power of Teams and Organizations

The expanded and updated version of Aaron Hurst’s book, The Purpose Economy, is available now.

When you are at the helm of a company working in 193 countries with 83,000 employees and another 2.5 million employed in SAP’s ecosystem, it is easy to see the power of organizations to drive progress in society. He has seen SAP not only take care of its massive family, but also achieve results that individuals or even policy makers couldn’t accomplish.

He points to SAP’s role in “banking the unbanked in India using mobile devices and mobile technology that are ubiquitous and affordable by people, using various software components of SAP to protect the rainforest in the Amazon, and working to increase the safety and performance of mass transit systems.”

McDermott believes that ultimately ecosystems of employees, partners, and clients, not governments per se, are going to be the ones to improve economies and make a major dent in climate change. The job of a great leader is to bring out the collective passion in their teams and then get out of the way.

Aaron Hurst is a globally recognized entrepreneur and authority on social innovation. He is the CEO of Imperative and founder of the Taproot Foundation. His book, The Purpose Economy, is now available as a paperback.

About the author

Aaron Hurst is a globally recognized social entrepreneur and authority of social innovation. He is the CEO of Imperative, a B Corp advocating for Purpose-Oriented Workers and supporting the organizations that embrace them.

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