ServiceNow boss on riding the tech storm: ‘I was the first one that basically said no lay-offs. Period’

ServiceNow chief executive Bill McDermott is the bearer of good news. Great news, actually; the digital workflow company has just announced plans to add 400 jobs to its Irish operation over the next three years.

That is relatively unusual at a tech company these days, in an environment where you are more likely to be counting the cost of downsizing rather than celebrating an expansion.

Dublin is now a big hub for ServiceNow. Last year the decision was made for chief strategy and corporate affairs officer Nick Tzitzon to relocate to Dublin in a show of commitment to the European hub.

This latest growth will see the Irish operation double its employee numbers in the coming three years, adding staff across digital sales, engineering, research and development, part of the company’s wider growth plan for Europe, the Middle East and Africa. That may turn out to be a conservative estimate – both for the jobs and the timescale.

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McDermott is particularly proud of being able to grow the Irish operation. “Our flag is in Ireland and we have good executive leadership. We have lots of innovation going on here. I’m really proud, especially with a name like McDermott, to have a flag in Ireland,” he says. “We think that Ireland is really a gateway to the European Union. There’s just so many things that especially US companies gain from their relationship with Ireland and what we think we can do to really digitise business in Ireland is pretty dramatic.”

[ Tech company ServiceNow to create 400 roles at Dublin office ]

If McDermott says Ireland will be important for ServiceNow, you can believe it. As he once told The Irish Times, he can “see around corners” when it comes to companies. In February 2020, before Covid hit and lockdowns began, he hinted at significant growth for the Irish office in the coming years. At the time, he described it as “the biggest show in town”. That was when ServiceNow had 70 employees in Ireland. Now it has about 400 and growing.

The company is set to move into a new office on Dawson Street early next year, which will serve as its headquarters here, another sign of its growing footprint. Its original office, in the Sharp Building in Dublin’s city centre, no longer fits its needs.

McDermott has been at the head of ServiceNow for five years, steering the company through the tumult of the pandemic, when an increase in demand for digital services boosted many a tech company, and the subsequent downturn in the tech sector.

The company offers a cloud-based platform for automating workflows, using a variety of different technologies that simplify how businesses work, making them more efficient. It hits all the right notes for companies that want to cut costs and increase productivity without sacrificing service, something that may have contributed to its success.

[ ServiceNow on the move as it eyes room for expansion in Dublin ]

Not only is it growing but ServiceNow has also managed to avoid the large-scale lay-offs that have hit the tech sector in Ireland and seen thousands of jobs lost across the sector. That was a conscious decision on behalf of the company – look after the people and in the future, they may look after you.

“I was the first one that basically said no lay-offs. Period. Because no matter what crisis we have to fight through, in the end the people will define us,” he says. “And if you can’t fight hard for the people when they need you most, how can you possibly ask them to fight for you when you need them, to step up and achieve something that’s incredibly difficult to achieve, whether that’s innovation or a dream?”

He isn’t unrealistic about the situation, though. ServiceNow may have come through what is hopefully the worst of the tech crisis without cutting jobs, but the chief executive acknowledges that at times, it can get a bit sticky.

“In the short run, there can always be a difficulties; we understand that and I understood that when we made a commitment,” he says. “But I believe that if enough people care, you’d be surprised how you can get through difficulties and how you can figure out new ways to create enough revenue where you can afford to pay people and still have a fair margin leftover for the shareholders. And that’s how it works.”

[ McDermott has world domination in his sights after near-death experience ]

Shareholders will be happy once the returns are progressive, he says, and in ServiceNow’s case, it has fast revenue growth on its side, and a margin profile that keeps them on side. But the key to keeping it that way is looking after the people that keep ServiceNow at the top of the pile. McDermott points to ServiceNow’s retention rate for engineers, which he notes usually have a high turnover rate in the tech industry. It all has a purpose. “Happy people equal happy customers. Happy customers equal happy shareholders. It’s a virtuous circle.”

McDermott has a long history of success. He hails from a working-class family from Amityville in Long Island, New York state. He began his career as a teenage entrepreneur, buying his first business – a local deli where he used to work shifts – at age 16 for $7,000 (€6,444) in promissory notes. That business helped pay his way through college. He later worked for Xerox, where he spent 17 years, before he joined research company Gartner.

But it was his tenure as chief executive of SAP, the company he left to join ServiceNow, that cemented his reputation. He joined SAP in 2002, becoming co-chief executive in 2010, and four years later he was named the first non-German chief executive of the software company. By the time he left the role, the company’s market value had soared to $156 billion.

I remember being in the meeting with the management team, and I said if we don’t help solve for Covid we will never be a great global brand

Now he is intent on continuing that run with ServiceNow. So far, things are looking good. In the first quarter of the year, revenue rose 22 per cent to $2.1 billion, beating expectations and continuing a run of growth. In the five years since he took over at the helm of ServiceNow, the company has quintupled its workforce. In Ireland, where the company was very much in a fledgling state in 2019, that growth has been more pronounced.

In the early days of Covid, it saw an opportunity to do some good. “We leaned in to the crisis,” he says. “I remember being in the meeting with the management team, and I said if we don’t help solve for Covid we will never be a great global brand. Because great global brands have to rise when things are the toughest.”

That included projects with health authorities in the UK to help track Covid data, from infections to vaccines. From there, the focus shifted to hybrid working, and returning to the office safely with protocols in place for social distancing and the logistics that Covid-safety regulations brought. Innovation was the key to success here, says McDermott.

Despite the pressure that the past few years has put on businesses, McDermott still comes across as a laid-back chief executive with a focus on what is really important. While he relished the opportunity to work his way up through the corporate world, one of his greatest achievements, he says, is his family. He has been married to his wife, Julie, for 32 years and has two grown sons – “two of the greatest kids in the world”. He has counted legendary crooner Tony Bennett and Bono among his friends.

He is committed to the business. The clearest example of that was after an accident in 2015 that resulted in him losing the sight in his left eye. He underwent significant surgeries, and was back at his desk in SAP within a matter of weeks.

That determination to keep moving forward means that, although the Covid bump has long since faded for many companies, Service Now continues to grow quarter after quarter. The push for digitalisation has helped propel it forward; McDermott is clear about what is needed to stay there.

“This is a new generation in terms of what customers and companies need to be successful in this market environment. There’s a whole new generation of software in the cloud that is required to keep pace with the ever changing environment these companies are operating in,” he says. “Nine out of 10 CEOs here and across Europe are saying, ‘I need to accelerate digitalisation to keep up with the opportunities and the difficulties’, whether it’s a recession or it’s an opportunity to grow their business. The problem is 85 per cent of those companies have not achieved their digitalisation goals. And 85 per cent of those goals haven’t been achieved because of a lack of integration of the software systems that they have in their companies.”

I always remind people we’re not competing with anyone else, because we’re the only one that does what we do, the way we do it

This is where ServiceNow sees its opportunity. It is already eyeing an explosion in low-code apps on its system, and new tools such as artificial intelligence. McDermott is predicting a billion new apps will be built in the next year and a half on low-code platforms such as ServiceNow, opening it up to non-tech experts.

That also goes for the use of artificial intelligence, a new frontier for businesses, specifically large language models. But rather than shoehorn ChatGPT into the business, ServiceNow’s use of artificial intelligence is business specific, while also allowing companies to keep control of their own data.

“Businesses are now going to have regular people – it could be people in administration, people in operations, people in supporting roles, and of course engineers – who can text the ServiceNow platform and create code just from a text, or automate a business process, generate a new application,” says McDermott. “This is the power of generative AI, and what we are doing is building large language models for specific use cases on the ServiceNow platform that reinvent the way companies do their business.”

That doesn’t mean giving over control to technology, though. “I want to be clear: people are the master, technology is the servant. And the servant is AI in this case, and it only exists to make businesses and people better.”

ServiceNow is in an innovation race, although competition is thin on the ground. “I always remind people we’re not competing with anyone else, because we’re the only one that does what we do, the way we do it.” In the meantime, it is on to bigger things – specifically, fulfilling the predictions of a research note that says in less than a decade, ServiceNow will be a $50 billion company. That success will no doubt carry through to Ireland.

“I feel very strongly that our best days are in front of us,” says McDermott. “We’re on a roll.”