(Image obtained from ServiceNow)
When Bill McDermott joined ServiceNow as CEO in late 2019 after a long stint as chief at SAP, he made it clear his intentions to join the workflow cloud provider to become the “defining enterprise software company of the 21st century.” do. McDermott outlined a clear goal of scaling ServiceNow into a $ 10 billion annual business with the goal of bringing the “workflow revolution” into the company.
ServiceNow was well on its way before McDermott took over the helm, but there were some challenges in expanding its partner ecosystem and increasing brand awareness with leading decision makers. That has all changed under McDermott’s tenure so far, and buyers have begun to better understand the impact of process automation and workflow redesign in the company.
This was actually aided by the outbreak of the COVID-19 pandemic, which requires companies around the world to quickly rethink how they interact with employees and customers while ensuring the stability of their systems. ServiceNow has always worked well with other providers and tried to become a “platform of platforms” through integration. This means that buyers can theoretically use their existing recording systems and quickly set up new processes.
This week, McDermott spoke at the Morgan Stanley Technology, Media and Telecommunications Conference where we got a deeper look at how he has changed ServiceNow’s approach to sales to reflect his ambitions for the company. Not only that, but McDermott shared his views on how COVID-19 is changing priorities in the company with the CIO / CTO regaining authority.
Regarding ServiceNow’s approach to customer acquisition since taking office, McDermott said he wanted to adapt the company’s approach to conversations with buyers. ServiceNow not only focuses primarily on the C-Suite, but also on the type of conversation. The provider prioritizes the solution of the “big” problems for buyers and not selective solutions. McDermott said:
One of the things I said straight out is that we have to be the C-suite favorite company. And instead of having a product or even a solution discussion, we’re having a $ 600 million or $ 1 billion conversation, because that’s exactly what the customer is at stake.
We developed relevant executive briefings that were very specifically linked to the industry domain area of the company we served. And we didn’t waste time operating upstairs in the house. I always tell people that the air is much thinner and easier to cut up in the house than it is down below.
So we have a Rolodex that we train pretty freely. And they are powerful people who are looking for solutions to problems. And that was really the key. We have increased our executive briefing volume by 80% compared to the previous year.
Effects of COVID-19
McDermott also spoke at length about the impact of COVID-19 on ServiceNow and how the company is responding. His top priority is to ensure that the provider makes a difference in the months and years to come in terms of the big problems economies and organizations around the world are facing. McDermott said;
I explained to the executive team that I’ve seen this movie a couple of times, which means the world is in big shock. I saw it with September 11th, I saw it with the 2008 financial crisis. And I explained to the team that COVID would be different than this, but we had to step up and be a brand that really helps fight back.
McDermott highlighted how ServiceNow responded quickly by rolling out its emergency applications and then returning to the work suite. Since then, it has also been involved in national and state vaccination programs around the world – NHS Scotland in particular.
He also discussed how ServiceNow will take a slightly different approach to global vaccine rollout with vaccine rollout to reach customers. This will largely depend on the needs of the customer in question, but McDermott believes they will think differently about travel and face-to-face meetings (reflecting the wider changes in the marketplace). McDermott said:
It will be a hybrid strategy. I think we’ve all learned that when you can get on a plane and fly anywhere, we do a lot of silly things. And I myself am guilty as a defendant. I can remember flying from Beijing to Europe for a couple of meetings. We could have done some of that with Zoom.
Once the vaccination process is complete and people feel safe again, we will attract more active participants in the direct sales process. With this technology, you can build and expand an already qualified, existing, excellent customer relationship much easier than meeting a new customer with a new logo who is not currently doing business with you.
And then you have to be very critical of how you market yourself one-on-one, one-too-few, and one-too-many based on the attributes: is it a customer? What industry are you in? What geography are you in? And ultimately, having a hybrid between the digital world we operate in now and the direct world definitely helps if you are looking to do new business. People still want to meet people, they still want to trust the people they do business with. So we have to do both.
The CIO is gaining influence again
ServiceNow also has an interesting take on the current role of CIOs and their future impact on the company. McDermott notes that the dawn of the cloud in organizations led to a variety of industry competencies in which these executives saw the possibility of SaaS applications and took matters into their own hands. However, over time, business leaders realize that the CIO is still an important figure in getting companies to move as a unit, with the customer being the top priority.
McDermott said companies have poured billions of dollars into IT over the past 30 years, but still have a “hornet’s nest” of complexity in their hands – where they struggle to see beyond the systems and silos. He said:
“It’s very difficult to work together because everything is optimized for one department at a time. But if you look at it from the CEO’s point of view, they just want to win. And they want everyone to come together on a common mission to make their customers unique and to offer something very special.
“What we do at ServiceNow is develop software that allows them to manage security, development, operations, service management, asset management, business management, and operations management – the entire IT backbone. So the employee experience means one portal having where I can hire people, people on board, giving them the tools they need, the training they need, the benefits they have, aligned with the core values.
And that means the CIO has a new position of power in the company, according to McDermott. He explained:
The power of the CIO and Chief Technology Officer has been fully restored to the company. For a while there was a decoupling between the managing directors and the CIO or the CTO. And that was in the early days of the cloud, when operating costs were easy to come by.
However, it became clear to the CEO that they weren’t going very far in terms of the overall company’s performance. And they’re still investing a lot of money in technology. Why can’t we innovate faster? Why are our people not happy? Why do our customers stop buying and keep or stay with us? That’s because they didn’t do very well in those silos.
And that’s where McDermott thinks ServiceNow has a sweet spot with the C-Suite – where the workflow platform can play an important role. He said:
They weren’t working in teams to do something very specific that was really important to the company. And now everything has fundamentally changed with the workflow revolution. And that’s the biggest change that has enabled the CIO and CTO.
You can’t have a happy customer without having the right IT backbone. You cannot create a Michelin three star experience for the customer until you have created a Michelin three star experience for the employees. And they have to use common tools and processes in the workflow.
Everyone works for the customer and that has changed fundamentally. And that’s really why the workflow revolution is here to stay. This is not because either of these point solutions is any less good, but because cross-platform integration of work has become the new standard for a well-run business.