Name: ServiceNow CEO says a recession will not stop businesses from buying his tech solutions
Uploaded: 2023-01-06
Duration: 6 min 26 s
Description: Bill McDermott says that despite the slow economy he expects sales to nearly double in three years

Bill McDermott says that despite the slow economy he expects sales to nearly double in three years

ServiceNow CEO says a recession will not stop businesses from buying his tech solutions

Leadership

ServiceNow CEO says a recession won't stop company's growth

Bill. So great to see you again and to talk about things that are going on at service now. Your company has been in business for almost 20 years and it's not exactly a household name for many of our viewers. You call service now, a leading digital workflow company, what does that mean? Can you simplify it for us? So much of corporate life is complex. We like to think of service now as a workflow automation platform company and we radically simplify the way business is conducted for enterprises all over the world from the way they give experiences to their employees and customers to the way that they manage digital transformation were the company that's at the front and center of that process. So what's the business problem that you solve for your service now customers, customers today as you know, susie, they need immediate value. Um they're under a lot of pressure. We all know the environment that they're operating in uh from you know, high inflation to tightening monetary policy to dislocated supply chains and even wars in europe. So they have to really invest in things that will give them an immediate return. And the magic of service now is we can invent procurement management systems, reorient supply chains literally give a vault where they can go, one place to get all their security needs met and we can do all of this on a single platform and the return on invested capital is stunning. I had one large manufacturer tell me that they're gonna take a billion in costs out of their procedures on service now and we had them up and running on the solution in less than 90 days it's pretty stunning. Well that seems to be resonating with your customers because there's been a lot of demand for your products. And when you look at your latest financial report we see double digit growth and revenues double digit growth in earnings, 98% of your customers renewed their software subscriptions. I mean that's all pretty amazing. And you raised the outlook for the rest of this year. Can you keep up this pace of growth? Given all of the troubling predictions that we hear about the economy? Well we're counting on it and you know we actually increased our subscription revenue forecast for the balance of the year. And the reason is with all the challenges in the global economy and you're absolutely right. Suzy. They are very serious and each day you read another tough headline around the macro but that's the very reason why the customers need service now. They need to do more with less. So in many cases they'll have less employees but the work didn't go away so you have to automate so you can get more productivity out of each asset that you have in the company. That type of thinking really resonated during the pandemic. Many businesses saw the value of digitizing and automating their processes and actually they accelerated their investments. But today with all this recession talk I just wonder when you meet with C. E. O. S or their chief technology officers, do you find that it's harder to make the same case for them to invest more given that interest rates are high and inflation is at a 41 year high and the forecast for a recession, it doesn't take more work on your part to convince them to invest. Now we had to reorient our whole company for ready to run business solutions that are tailored to industries and various personas like the C. I. O. Of the ceo that you mentioned And we have to have things come out of the box and go live in less than 90 days. So customers get immediate value from our systems and that's really our great differentiator because you're absolutely right. I call this era the era of great re prioritization. We went from uh kind of operating systems, databases and applications now. Two platforms and customers are gonna be super thoughtful about the platforms they bet on and any platform they bet on, it has to deliver results. That's why they like ours so much. Well you talk a lot about your expansion plans and you've been predicting for a while now That sales at service now will hit $16 billion 2026, which is only three years from now. That's also more than double where the revenues are right now. Do you have to do something different to hit those numbers? We're right on track and in fact this year, you know, we reiterated our guidance and actually raised our guidance for the full year. So we need to keep innovating. Um keep taking great care of our customers. All our numbers are driven through organic innovation. And the reason for that is we really believe that business simplification is the art form that we bring to the enterprise that no other company has been able to match. We're gonna keep it simple, keep executing our strategy, keep taking care of our customers and keep building the best team in the business. You know, Bill, you have a remarkable track record as a leader, your many years of Xerox at S. A. P. And also at service. Now tell us what defines your leadership. Why have you been so successful leading so many big businesses? Well, I've always believed that the true measure of a leader is not what you take from this world, it's what you give it. And I think that the bigger the organization, the more visible, in a certain sense you are and if enough people care because they know you care, you can move mountains. And I believe we've always had a dream big mentality and we've always tried to make make sure people were uh first and and always inspired to love the work that they are doing and understand the connection between the work they are doing and the problems they are solving for the customers that pay our salary and our highest calling is to make sure that they're super satisfied. But I've always understood that you can't make them super satisfied unless you have a highly inspired, knowledgeable, determined, resilient workforce that wants to win.