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CEO Of SAP Talks Innovation At BC Chief Executives’ Club

News Editor

Published: Monday, February 10, 2014

Updated: Monday, February 10, 2014 02:02

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Emily Fahey / Heights Editor

With its rapidly expanding presence in the startup industry, Boston College is no stranger to “disruptive innovation”—a set of business strategies aimed toward restructuring existing markets or technology, and the topic of SAP—a German software development company—co-CEO Bill McDermott’s talk at BC’s Chief Executives’ Club of Boston luncheon last Thursday, Feb. 6.

The event, in association with the Carroll School of Management and hosted by Chairman and CEO of EMC Corporation Joseph Tucci, welcomed nearly 300 Boston-area CEOs to the Boston Harbor Hotel’s Wharf Room, where the BC CEO Club meets between six and eight times per year.

Before Tucci—who oversees $21.7 billion in revenues and leads more than 60,000 employees globally at EMC, an American software solutions company, introduced his longtime friend and colleague McDermott, the Chief Excutives’ Club of Boston awarded Nazifa Subah, CSOM ’17, its annual scholarship.

The scholarship, which was established in 2002 by Patrick T. Stokes, BC ’64 and former CEO of Anheuser-Busch Companies, recognizes an outstanding undergraduate within CSOM and is made in honor of corporations and their CEOs whose business leadership lines up with the educational mission of the University. This year’s scholarship was made in honor of McDermott.

“The scholarship will provide invaluable financial resources to an undergraduate student throughout her four years at Boston College,” said Warren Zola, executive director of Corporate and Government Affairs and sports law professor at BC.

After Tucci concluded his opening remarks, McDermott led the discussion on the concept disruptive innovation by first harkening back to his early, more humble days as a young entrepreneur.

McDermott’s road to SAP began when he traded in three jobs he’d been working to buy his own delicatessen business not long after graduating from high school. He made it the forefront of his focus to understand the demands of his consumers and foster personal relationships with the shop’s patrons. It was at this local deli, McDermott claimed, that he cultivated a thorough sense of customer interaction—lessons in business relations he carries with him to this day.

After eventually growing the local deli to the point of unprecedented success, McDermott sought out a sales position at Xerox in 1983 at the age of 21. By the time he was 37, McDermott was appointed the youngest division president and corporate officer of Xerox in the company’s history.

He went on to obtain his MBA from Northwestern University’s Kellogg School of Management and completed the Executive Director Program at the University of Pennsylvania’s Wharton School of Business, after which McDermott transitioned from Xerox, to Siebel Systems, to SAP—a multinational application software company that helps enterprises manage business operations and customer relations.

SAP generates $22.1 billion in annual revenue and currently employs approximately 67,000 employees who serve more than 251,000 customers with reach in over 188 countries.

McDermott was named to the SAP Executive Board in 2008, becoming responsible for managing global field operations, and later appointed SAP’s co-CEO alongside Jim Hagemann Snabe in 2010.

The topic of McDermott’s talk on Thursday, much in the vein of his own beginnings in corporate leadership, focused on leveraging the millennial generation in order to renovate and modernize outdated aspects of business.

“These millennials, I truly believe, are the next great generation,” he said. “I’d like to comment on that a little bit, and also the idea of disruptive innovation—embracing disruptive innovation. Let’s talk about the millennial generation first … this is an unbelievable time for this next great generation to step up.”

McDermott described the future of business development as being crucially dependent on ushering in the next generation of young, eager individuals in order to reduce the complexity business models have taken on in recent years.

“I think complexity is the most detracting CEO issue of our time, and I think it’s so important that we make things so simple in these enterprises and we collapse complexity,” he said. “In my business … we know the importance of taking these enterprises and simplifying everything.”

McDermott also acknowledged, though, that SAP’s focus on utilizing youthful talent wasn’t always the company’s top priority, and instead came about as a result of rapidly budding technology and the global need for what McDermott calls a “winning strategy”—for SAP, he said, that entails providing its customers simple and efficient solutions.

“In 2010, we kind of had to change everything because we were all about [corporate]-level relationships—making it to the corner office of the top floor,” he said. “But the world had changed with the consumerization of IT, the ubiquity of mobile devices—we really kind of had to rethink things and not rest on our laurels as a software company, and recognize, really, where the world was going.”

Among the list of attendees were managing directors from wealth management firms including Barclay’s and Goldman Sachs; chairmen of banking companies such as Century Bank and Santander; and Boston Mayor Martin J. Walsh, WCAS ’09.

The BC CEO Club will reconvene for its next meeting when it features NBA Commissioner Adam Silver as its keynote speaker later this semester. 

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