Fireside Chat: Navigating Change – AI and the Future of Business

Welcome to our fireside chat with Bill McDermott. He is the CEO of ServiceNow. Bill, how are you doing?

I'm doing great, Gerhard. Great to be back with you again.

What I like about you is your ability to set the stage for a business transformation through your company. And I've listened to a lot of your speeches and, and looked at white papers from ServiceNow. Can you share what is the current transformation right now all about?

Yeah, there's so much focus right now on AI and if you think about the customers, they're getting a lot of news from a lot of different sources and they're trying to de risk the past while they move forward with net new innovation and, and business value now. And they're recognizing that the technology strategy is the business strategy. There'll be a $20 trillion impact in the global economy by 2030 on AI. And for every $1 invested in AI solutions and services, the customer will get a $5 return on their investment in the global economy. So this is the game changer. This is the biggest transformation you and I have ever lived through. And we've been there with the Internet, we've been there with the cloud, we've been there with the move to mobile business. And of course, now we're in a completely new ball game with AI because it embodies all of those things and it's the biggest market of our lifetime.

So how should business leaders, especially sales leaders, think about AI in terms of.

Leading the transformation? Because you said about a year ago that within the next 24 months, every single business process will be transformed by AI. What is the kind of mindset that leaders need to adopt?

First of all, don't be the second move. The people that don't go for AI and believe in AI and invest in AI now are going to be the losers. But the thing that people need to understand is this is not about agentic AI for a department. This is about AI business transformation for the enterprise. And this is the unique differentiation of ServiceNow is, yes, we have Agentic AI for all of our solutions, whether it's it or the employee experience or the customer experience, or the innovators themselves that are building low code innovation with natural language. We have all that. But the beauty of it is the agentic AI agents have to work in their domains, but they have to work across domains because business is conducted in teams across an enterprise. And we also have agentic AI agents that work with other people's agents. So the unique effect of ServiceNow is our platform. You have to bet on Platforms that, that will transform your business, not make one department perform slightly better. That's the big idea. You know, most of the brands that your viewers pay attention to have been around more than a half a century. Yeah, that's an eternity in tech. So the control tower has to integrate into those, but it also has to work across all of those. So now the AI layer can transform how workflows, how business is done and how things are transformed across the company. And I would say right now there is only one company that does what we do the way we do it. And we also respect all the other participants because the customers have invested in those.

You are sales leaders and your sales enablement leaders and revenue enablement leaders and sales ops leaders. How do they use use AI to create more customers, create better customer experiences and accelerate revenues.

We've looked at our own innovation roadmap as a gateway to not only how we help our company perform better, but we also use it as a gateway on how we help every other company and their sales forces and their supporting cast perform better. I would give it to you this way. We've moved from the evolution of AI to agentic AI and we've shifted from portals and human agents to a combo of enterprise search, AI agents, reasoning engines and human agents. So now data has in many ways become the new battleground because enterprises are demanding real time insights that connect their ecosystems and their ability to extract actionable value from the data while they're ensuring trust and compliance in the behaviors. And if you think about what we have done differently is we've not only enabled that because we drink our own champagne before we move any products to the market, but we also cooperate with all the other market participants. So for example, if you think about the hyperscalers and the important role they play as a new operating system for the enterprise, they want enterprise software vendors to support the hyperscalers, the ones that they chose to ensure both technical and commercial compatibility. And we're also shifting customer expectations because AI is accelerating this shift in the customer buying behavior where customers are prioritizing flexibility, end to end integration, industry specific capabilities and faster roi while always reducing the cost of ownership. So this is really a value based business. You and I know that it's been a value based business for a long time, but agentic AI and AI and a transformational platform can get you there so fast and so much quicker than ever before in the history of tech.

So when it came to transforming servicenow and drinking your own champagne, what resistance did you encounter in your business?

I Think I'm blessed with a culture that wants to win. So our culture grabs on to new innovation. But we've been working on AI now since the day I walked in the door. And we were building large language models from day one with Nvidia. And we now have embedded AI in our platform across all of the domains. And agentic AI is something we've been doing now for quite some time. So I think being the first mover led our company to understand the difference that AI could make in how we run our business, how we make our business far more productive, and also how we expand our ecosystem. So everybody gets agentic AI as a game changer. But we embraced Nvidia, we embraced the data bricks, the snowflakes, the great companies like Microsoft and Google Cloud platform and AWS and various third party large language models and of course my great friend Michael Dell at Dell and the great things that he's doing to transform the office. So we have friends and we have an ecosystem and that's super important. We also showed that we could scale the workflow data fabric and analytics data is everywhere. So what we invented was the world's fastest most comprehensive in memory database that supports our whole platform. And we can enable customers to connect, contextualize and act on any data from any source seamlessly. So it's not our job to own the data, it's the customer's data. You can upload it all into ServiceNow if you want, or make a 0 copy from any source to complete a transaction in the flow of work. So it's so important that data must not only be accessible but, but also actionable and secure because trust at scale is hard to do and we've kind of mastered that skill. We're also expanding boldly into the front office. And you and I have talked about traditional CRM tools for a long time and they're good, but for the most part it's a bespoke solution that's operating in the sales and marketing silo, which is fine. But when you think about running a corporation, you've got to connect what you're doing in the front office. Whatever channel the customer is consuming you in, whether it is online, it's through a partner, it's direct. They're going to come at you in many different directions. How do you connect that front office promise to the middle office in terms of how you operate the company and the back office so you know the data, the content, the history, and you can deliver a seamless handoff and a rich customer insight and the fastest possible response time to the customer so they can see you have your tech aligned and you really care. Not just about making the sale, but about creating loyalty effect. And that's how we're doing it. And it's been amazing because we're reinventing, as you said, every workflow in every company, in every industry, with gen AI at the core, with agentic AI driving the new workforce of the future.

Somebody once said that data is the new religion. How can you create an environment where people really trust the data?

What we did with our platform is we built a platform that was based upon the customer's data. We built language models that enabled the customer to, to take their data. What is unique about that is you're able to access that data and process that data at breathtaking speed. So there's zero latency. Because it's your data, you should have a high degree of trust in your own data. And obviously because it's your data, it's highly secure. Best of all, maybe it's super cheap to run. So the way our platform works, it's not GPU greedy. It's very, very low cost to run. Now, if you want to go into large language models that access ChatGPT or perhaps Meta or Google or any other large language model, including some that are built by the customer themselves, we're fine with that. You can bring your own model, we integrate it seamlessly to the ServiceNow platform. And because you must trust those models, when you bring it into the ServiceNow platform, it becomes part of your business process platform. We take great care in protecting that data and making sure you understand what you're bringing into your environment. Obviously, when you execute it on the ServiceNow platform, it's fast, it's secure, and it's cheap to run, which is super important in these tough times where companies want to grow, but they also want to innovate and they also need the leverage on the expense side so they can make AI work in harmony with people. Not necessarily as a replacement for people, but as a concept of new ideas, new business models, new innovations, new ways to do things that you've never approached before because they weren't even possible.

AI is really like a giant wave and you can learn how to surf the wave or you can get crushed by the wave. But I think that there's another metaphor, which is that ServiceNow is the wave.

This is the biggest, biggest wave I've ever seen. It's still in the early days. I'm so happy that we have literally thousands of customers already on the Journey with us. The agentic AI change in the business modeling of companies will be unbelievable. So they have to adopt an AI first mindset. When you think about the customer, which you know better than anybody, it's not just selling the customer, it's this experience that has to be magic. So the adoption of the technologies or the solutions you bring and the usage value they get has to be unmistakable. And that will lead to a renaissance of all kinds of new business models. And obviously you have to refine the messaging and the enablement for how you're going to run your company and how you're going to help customers. And this is really enhancing the leadership ability of a corporation to increase the visibility, to become a thought leader in your space and to move from this idea that you have to do everything, you don't have to do everything, you have to have an end mentality. You have to rethink the principles that you run on and embrace new market realities. So for us, that means domain specific models and third party models. It means servicenow, cloud and hyperscalers. It means workflow breakthroughs and respecting a half a century of legacy systems of record so we can drive change for these customers to win. And as you know, Gerhard, change has never happened this fast before and it'll never move this slowly again, my friend.

Well, somebody once said that as a good leader, you need to have your eyes on the horizon, but your nose on a grindstone, it seems like that this AI revolution gives leaders a much larger horizon line and a micro focus on what's right in front of them.

I think you said it beautifully. On one hand, you have to dream. And so the perimeter of the horizon has expanded to dimensions that are almost beyond anything we could possibly expect. That's how big this is. But at the same time, you have to eat. And if we dream and eat at the same time, I think people are going to find this AI revolution as the elixir of reinventing the business model in the context of how humans and technology interact with each other. Because from my perspective, if you really think about it, AI has to be in service to people. Why do we build great technology if it doesn't make people's lives better? And as I look at the work the AI is doing for us, it's taking away 90% of the soul crushing work that people didn't want to do in the first place. The repetitive tasks, the repetitive contracts and order management and things that are ridiculous proposals that could be cut and pasted in an instant by AI with teams emailing and sending PowerPoints all over the place these days are gone. So we have to rethink the productivity curve of what's possible with less people doing more beautiful and fulfilling work. While the AI could have millions of agents in a substantially sized company taking apart the company's soul crushing, depressing work, it's no wonder sometimes that people don't want to come into the office. Who would want a swivel chair in and out of 17 applications on average a day, tearing apart a third of their productivity? So we have to create the new enterprise, the perfect enterprise. And it's only possible with the AI revolution.

How does AI serve you in your role to be a better CEO?

Well, first I run the whole company in real time. We have something we call the CEO dashboard here, which is every moving piece of the company is on these. And what does it all mean? It means we're now capable of truly running a real time enterprise where everything is happening in real time. There's no latency. I can see everything on the human capital, the financial side, the customer side, even the innovation side of what's happening in real time. You know, I have a million workflows that are going on in the company at any given time. And I can tell you exactly where the bottlenecks are in the workflow orientation itself on the ServiceNow platform. So just think about the CEO of a corporation being able to pick up the phone and calling up, let's just say the head of supply chain saying that we have a block somewhere in Frankfurt. Because in that flow of work between our supplier and our customer, I can see things are delayed by an hour and 15 minutes. What is the problem and how is it being solved Now? Soon AI will solve it itself, where it'll have the comprehension and the analytic skills to make next best recommendation. Where you simply press in a button and no phone call even needs to be made. That's the journey we're on. So real time business is now not only possible, but it's the expectation.

So it's business at the speed of thought.

Totally. It's 100% right.

You're one of the few leaders that not only creates value, extraordinary value for your customer, but also amazing value for your employees. But there's a third area. A lot of CEOs are clueless. And you bring value to the community by having ServiceNow employees giving back to the community.

The ultimate form of leadership and the true measurement of leadership is not what we take from this world, it's what we give to this world. And we try to give this world great innovation. We try to make sure that people get the solutions that they need to change the paradigm of their outcomes and their business goals. But we also respect the communities that we work, live and compete in. Because after all, making a difference in people's lives is really what it's all about. And it's not just a corporate thing, it's a human thing. And I think the soft stuff is always been the real stuff. And I think that's the earthiness and the humanity that has to go into a company where you celebrate what people give and you recognize what they give, not just what you get from them. And the employees here really respect that. You know, I got a great call from a wonderful friend of mine, Howard Schultz, and he and his wife put together the American Opportunity Index, which was a beautiful thing to do because they look at the top performing 400 companies in the world and they don't look at them based on just their business results. They look at them based on the difference that they make in their employees lives. And what it basically measures is not only how the employees are doing in your company, but when they leave your company and they go to another company, how do they prosper? And I was very proud of the fact that two years in a row since this began, ServiceNow has come in first in tech and number four out of 400 in the world. And we're very proud of that because in the end, it's all about the people, it's all about the team. It's all about the executional excellence of what's possible with a great team. And you know what's funny? I was surprised last year when we had a million and a half. And this year already will be well above 2 million resumes this year. And we have 26,000 people. So the eye of the needle to get in here is really tight. But once you do and you make it, you're running with the best.

I once heard of saying that parenting is about two things. You've got to give your children roots and you got to give them wings. And I want to reflect on that as a metaphor for you as a leader. Because you give your people at ServiceNow Roots, where you root them in human values and you give them wings. When they leave ServiceNow, they become leaders in other companies and they replant those ideas in other companies. Makes makes other companies better.

Nothing makes me happier than to see obviously people prosper here, but when the boundaries of what they're trying to accomplish in their personal lives somehow hit a Glass ceiling. For whatever reason, it's amazingly important to build the alumni effect or the network effect of people that were happy, they had great trust with the franchise, and they go on to carry that flag and put it in the ground elsewhere and really make a difference. And if you think about the ecosystem effect of trust, it's the ultimate human currency, and every time it's created, it multiplies hundreds, if not thousands of times over and over again. So you're right. That is something we think a lot about here at ServiceNow. And I'm very proud also of the people that I've worked with that have gone on to be CEOs. You know, they really fire me up and makes me super happy to celebrate their success. And I root for them every day.

I want to talk about what you said earlier about dreaming and how important dreams are. And you are the author of the wonderful book called Winner's Dream. And what I want to know is, what do you dream about when it comes to creating a better world?

It's really important to never forget where you come from in that book, Winner's Dream, which, incidentally, is still selling all over the world in hard copy a decade later. So it's a. It's a great honor. And, you know, I start off by thanking my mother, Kathleen McDermott, and I said, everything I was, am, or ever will be, I owe it all to you. And I always also owe to my dad and my family. You know, don't forget where you come from. And the other thing I attributed in the book, first quote, was to the great Robert Kennedy, who was actually quoting George Bernard Shore at Kansas University in 1968 when he was giving a speech, and he said, some men see things as they are and say, why? I dream things that never were and say, why not? So I think the definition of a winner with a dream is to constantly think big and think bigger every time you thought big and help other people think their biggest thoughts. There really is no room for small dreams in the world because there's so many big things that we have to go after. And I always start not just with the dreams that are pleasant, but if you think also about the tough things that have to be accomplished, there's a lot of them out there in the world today. The world's biggest challenges are also the world's biggest opportunities. And as we talked about the AI world, this is creating new hopes, new dreams, new models that haven't even been imagined yet. Somewhere between tackling the tough things, as you said, the grindstone, and that perimeter or that beautiful horizon of an agentic AI world somewhere in between. That is how you conduct yourself, conduct your business, conduct your company. But I know one thing. You got to walk with a purpose. You got to believe it before you're going to achieve it. And I know personally, and I know professionally, I haven't had my best idea. We haven't worked our best day. And we're all work in progress when it comes to living our best life. Those dreams, they are. They're wonderful because you constantly get a chance to reinvent yourself and get young all over again. I go into New York City, Gerhard, on the streets that I walked on when I was 21 years old. And I have more energy now than I did when I was gone from door to door in Manhattan because I loved what I did then, and I love what I do now. And there's so much we've yet to accomplish. You know, everybody should keep it in mind that dreams start young. And so, too, to the promises that you make. And every day you put the cleats on and you take the field of business, you should come in with a determined soul to win and to perform and do the best you can and to help all the other people around you do the best that they can. But ultimately, whatever promises you make in the marketplace, make sure you keep them, because your word is the bond that will follow you all around the world no matter what you do.

I also want to add your favorite saying. Stay hungry and humble.

Totally. You know, we can all remember, no matter our backgrounds, we can all remember hungering for something, and whatever turned you on then always can go back to it, and it can get you hungry all over again. So don't forget where you came from. But humble is all about, you know, never forgetting that you're just a part of a great team. Yes, you could be the leader of the organization, or you could be the receptionist of the organization, but it's always about the team. It's always about a we philosophy. No eyes and no me's show up in wheeze.

That's what you learn from basketball.

Absolutely. You got it. Gerhard.

There's one more thing that I want to point out to the audience. You probably a leader in AI now, but you've always been in a leader in ei, which I call emotional intelligence. So I think that your DNA for success means AI plus EI equals roi.

That's a really great definition. I'm gonna definitely steal shamelessly from you on that one, because I really love it. You know, when you think about the early part of a person's life. You know, I really do think about stories I told in the book, whether it was delivering papers or bus and tables or pumping gas. Being a teenage entrepreneur, owning my own business, I always learned that you can get anything in this world you want if you help enough other people get what they want. And if you're in service to people and you get your joy from doing right by them, you'll be a happy person your whole life. And you'll never, ever have a day where you go to work. I'm just having a great time, but people say to me all the time, what was your favorite job? And my favorite job was always the one that I was in. My feet were always planted in the mission that I am conducting right now. You know, it's funny, I was with John Wooden, the great coach of the UCLA Bruins basketball team, on his 95th birthday, and we were in LA hosting some CEOs, and he got a question from one of the CEOs in the audience. And the CEO asked John Wooden, you know, coach, who was your favorite player? And he would say, that would be like telling you my favorite child. And I love them all the same. And in many ways, I loved all the professional experiences, no matter how humble they were, because I needed those jobs. I needed the paycheck, I needed the work. And it just brings out the best in you to recognize how fortunate we are to do what we do and to have a chance, have an opportunity to do the best that you can, and hopefully to strive to be the greatest in the world at what you do. I mean, isn't that awesome? And shouldn't you all.

Yeah, that's what I dreamed about when I grew up in Austria. When I was seven years old, I made a list at my grandmother's country, and I said, I want to have a business like my grandmother. I want to have a hot dog stand. And the third one was, I want a newspaper. Because I see people reading all the time, and I want to be the one that delivers interesting information to people. And that's how I ended up creating Selling Power. And coming to America was a big dream for me. And seeing you embody that dream is so inspiring.

And that's the true measure of greatness. And selling Power is what it is because of you and your will to win and your unbreakable spirit, man. So all I can do is thank you for having me today. It's been an honor rolling with you, as it has been these many years that we've been friends. So keep it up and let's go get them in 2025.

Thank you, Bill. Appreciate you. You are a treas.