Full episode · 57 min
Scaling Global Organizations in the Age of AI with ServiceNow Chairman and CEO Bill McDermott
Bill McDermott says AI should amplify human ambition, while enterprise platforms provide the workflows and context that models alone lack.
No Priors · Sarah Guo
- Bill McDermott is chairman and CEO of ServiceNow.
The best minutes
- 19:16Enterprise platforms can cost less than rebuilding with AI6 min
- 36:21AI speeds implementation and changes who companies hirePro pick 5 min
- 1:34A deli taught McDermott to serve customers and bootstrap5 min
Also worth watching
- 9:36A promise to his father helped McDermott land a Xerox job6 min
- 30:25Single-function software faces more AI disruption risk6 min
- 15:41Leaders can teach agency through repeated practice3 min
- 44:03AI adoption is moving beyond pilots at uneven rates5 min
- 48:33Enterprise buyers want specific AI plans, not long discovery2 min
Skip the ServiceNow control-tower and security pitch, the internal success metrics, and the CEO's technology interests and daily routine.
Summary · 4 min read
Bill McDermott is chairman and CEO of ServiceNow. He says he bought and ran a deli at 16, then built a career in sales and leadership before leading the enterprise software company.
Bill McDermott argues that AI should amplify human ambition, while workflow platforms supply company context, integrations and execution that language models alone do not. He says ServiceNow aims to connect models, hyperscalers, systems of record and IT and operational technology as an AI control tower. He argues that recreating a simple application on its platform with a language model would cost 10 times more, and expects agents to reduce added headcount while shifting human work toward engineering, judgment and customer relationships. He says enterprise customers increasingly want specific AI plans and fast, measurable results.
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- 1:16Deli work centered customer needs
McDermott says he bought the deli at 16 after working there, using a payment note and suppliers’ first order on consignment. He served blue-collar workers, seniors who wanted deliveries and children drawn in by video games, and says learning what customers wanted taught him that repeat business depends on serving them well.
- 7:29Human connection remains central to leadership
McDermott says leaders can draw inspiration from rapid change and the challenges it brings. He recalls that Xerox interviewer Emerson Fullwood hired him after McDermott insisted he had promised his father he would return with a job; the experience shaped his belief that leaders should recognize individual potential and preserve human connection as AI advances.
- 15:41Agency can be built through practice
McDermott says he was a shy, quiet child who gained confidence through work and believes agency can be taught. He recommends practicing attentive listening and care, then using simulation, coaching and certification to help people build confidence in face-to-face leadership.
- 18:37Platforms turn AI advice into action
McDermott says ServiceNow trained employees and CEOs on how language models differ from enterprise platforms. A model can recommend steps for a compensation problem, he says, but a workflow platform uses company data and coordinates functions such as HR, finance, legal or compliance to resolve and close the case.
- 22:00Rebuilding workflows can cost more
McDermott argues that recreating a platform with generated code requires rebuilding its functions and accounting for employee time, GPU and token costs. He says ServiceNow calculated that replicating a simple application on its platform with a language model would cost 10 times more, and argues that businesses also expect software to be dependable.
- 25:13ServiceNow aims to connect AI systems
McDermott says ServiceNow intends to act as an AI control tower that connects hyperscalers, language models and systems of record rather than displacing them. He says its expanded remit includes IT, operational technology and security integrations, with visibility into assets ranging from networks and manufacturing equipment to medical devices.
- 30:25Departmental software faces more risk
McDermott says generated code and agents could put some enterprise software at risk, particularly lower-value tools serving one department. He argues that companies spanning departments or serving as hard-to-replicate systems of record are better positioned; he cited more than 85 billion workflows and 7 trillion transactions on ServiceNow’s platform.
- 32:13Platforms combine systems and workflows
McDermott defines a platform by its mission-critical role, high switching costs and ability to connect business systems. He says roughly 800 substantial systems of record integrate with ServiceNow, which can connect data without moving it and let customers change processes or build applications using AI tools.
- 36:21AI speeds deployment and shifts work
McDermott says some large ServiceNow customers now go live in under 30 days, and that faster deployments give systems integrators more projects to complete quickly. He says agents handle 90% of ServiceNow customer-service cases and expects them to curb future headcount growth, shifting people toward engineering, judgment and customer relationships. He cited 2.2 billion agents entering the workforce in the next couple of years.
- 40:54Agent use is a key success signal
To judge whether its AI strategy is working, McDermott watches customer adoption of ServiceNow’s control tower and agents, and tracks agent assists and consumption. He says the goal is to connect enterprise data and assets in real time and become central to how customers operate.
- 44:03AI adoption differs across industries
McDermott says AI adoption varies by industry and region. Citing a meeting with businesspeople from Brazil, he said only 11% of companies there had moved beyond experimentation; he described public-sector efforts as consolidating complex systems, healthcare as modernizing patient experience and financial-services firms as rethinking operations and headcount. He said the U.S. leads in AI adoption and consumption.
- 48:33Customers want specific AI plans
McDermott says enterprise customers want specific recommendations tied to their business and leadership goals, with AI-driven solutions that can go live quickly and deliver predictable value. He says customers have little patience for exploratory sales conversations and expect vendors to know their business and offer a distinct position.
- 50:48Technology should improve the human condition
McDermott says he is curious about technology that could improve the human condition, including environmental work, space and new virtual markets. He describes a CEO routine organized around global time zones and regular team and customer conversations; he said he had 72 meetings with quota-carrying representatives on his calendar that month.
- 56:10Leaders should face periods of uncertainty
McDermott says leaders should not look for an escape hatch when conditions get difficult. He urged the Brazilian executives he met to face uncertainty and prepare for challenges, saying he believes periods of rapid change bring out strong leadership.
Published Apr 17, 2026.
Transcript · 39 min read
No Priors, hosted by Sarah Guo, with Bill McDermott.
Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.
The cost to replace an enterprise platform in this SaaS-pocalypse that people talk about is an extraordinary expense. Let's take that cost and then let's take the cost associated with the human capital doing that instead of something else because the platform was doing the work for you and then let's add up the cost of the GPU factory and the tokens that will materially affect their business model. And so for a simple application on our platform, it would be 10 times greater in cost to try to replicate it with a language model. People that run businesses understand that people make mistakes. They never will forgive software for making a mistake.
Hi, listeners. Welcome back to KnowPriors. Today, I'm here with Bill McDermott, CEO of ServiceNow, and the closest thing we have to a rock star in enterprise technology. We talk about leadership in the age of AI, what enterprise customers actually want, the difference between SaaS platforms and the SaaSpocalypse theory, and the next 10 years of ServiceNow. Welcome. Thank you so much for being here. Thank you for having me, Sarah. Thank you. So I want to talk about your career and leadership and what's going on with ServiceNow, but I want to start at the beginning. I read Winter's Dream last week, and it's an amazing book.
You talk about the deli you bought when you were 16. First of all, that's a very strange thing to do, but it's such an amazing story. Can you tell me a little bit first about your thought process, and then we can talk about how you managed it.
Read the whole transcript
“So I got them to give me the first order on consignment.”
One of the things I love about being in venture is you're in the business of giving people shots. Exactly. And entrepreneurs like yourself, especially when they get to be very successful, they value it for a really long time. Well, I deeply admire what you do. And I mean, can you imagine being the guy that came from the corner store that went to the corner office? And I think about your great job that you do in the venture world and how unbelievably creative you have to be. And the benefit of seeing all these young entrepreneurial companies, it's something I've always had a great deal of interest in.
So, like, I should really be doing the interview with you right now, Sarah. Absolutely not. Um, when you, uh, um, okay. So it starts with, it starts with, you know, your, your part-time jobs in the deli and then this amazing career in sales and leadership and SAP and service. Now, um, one more piece on the leadership, uh, front before we go to, you know, talking about the companies, what's happening in the tech landscape. So in the book, you talk about resilience and ambition and disciplined execution. Yeah. When did those ideas crystallize? in your head as the way you would lead. And then, do you think that changes today, given how dynamic the landscape is? And I was just talking to the leader of a, you know, tens of billions of dollar AI company. And they're like, we have to update our strategy every month. Like, we have no idea what's going on. And so, how do you think about operating in today's environment?
I had the great pleasure last night of meeting with about 800 business people that were in town from Brazil. And we were talking about leadership. And they took me back to my book, Winner's Dream. A lot of them listened to it, which is fun because I actually read it kind of straight through in between business trips. And I'm glad I did because it added the authenticity to the book I had hoped for. But it was wonderful being with them. And they really wanted to talk about leadership. And I think leadership is the greatest profession in the world. And in this environment we're in today, which is changing, and it's dynamic like never before.
And it's fast like never before. I tell them it is fast, but it'll never move this slow again. So this is the way it's going to be. That's kind of stressful. Yeah, it is in one way, but it's inspiring in another. You know, we have to learn to get like real inspiration from the challenges that are in front of us. Because if we're able to cope with them, and especially if we're able to overcome them, we get superpower.
“it was not an interview. It was a battle for survival. Because if I get that job, I'm in control of my own destiny.”
“We have to make them do it where they actually have to simulate and be trained and be certified and understand and be coached well.”
struck me as soon as I asked you the question about leadership in the age of AI was your immediate reaction i said you know something that's a very uh common sentiment it's the the pace of change is scary and your immediate reaction was like well it's also inspiring right it's a very like positive attitude um uh for especially for you know someone running an amazing incredibly adorable platform company where you're also facing more questions than you have previously sure um how do you think about like you know in getting everybody at your company or encouraging other people to have that type of reaction to change that it's all an opportunity
“for a simple application on our platform it would be 10 times greater in cost to try to replicate it with a language model.”
I think a lot of the SaaSpocalypse discussion ignores the basic fact that I don't think most businesses want to build workflow software for everything they do internally. And I do think they want somebody to be responsible for it. And I think it takes a lot of energy to go gather that context today. It is not an automated thing. And maybe it'll become more automated. but uh but that all resonates for me i i will have to ask you you know um so lms they can in the traditional interaction mode they give you an answer when you ask a question right now you have long horizon agents maybe you have computer use people can use applications with these models does that change your thinking at all no i think we lean into it you know our our perspective is these language model companies are fantastic and they're very important and they're going to do fabulously well um we said the same thing with the hyperscalers you know it wasn't that long ago that people were like hey you know why wouldn't the hyperscalers just eat software because everything is going to go to a workload in these great hyperscaler companies and they are great
companies. They're fabulous companies. And so our perspective was we have to be the AI control tower for business reinvention that integrates with all the hyperscalers, with all the language models, and all the systems of record because they too are important companies and the data that resides in them is very important. So if we can be that fabric that connects all those nodes, now we can help you run a true agentic business. And on top of that, we made the move into security, not because we're going to do all things in security, but because U.S. is the world's largest economy, China is number two, and cybercrime is number three. It's a $1 trillion a month problem. And so we feel that being able to integrate to all the good security platforms, but manage IT and OT, which is the operating technology, with Armus now becoming a part of ServiceNow, we're going to give corporations the ability to have a full purview of the whole landscape and so for example in operating technology you know it could be networks with devices attached to it it could be manufacturing with various tools that are or aren't on a network where ai can or may not even see them it could actually be medical devices in a health care situation it could be a world's prestigious bank managing critical
infrastructure which includes the people places things but also the building and the things in it To have all of that in one automated AI platform for this reinvention of your business, it's pretty compelling. So it's all there now. And I really like see such a future and such growth in all of these businesses, our core and what we've extended it to because we're a native AI company. Even the platform itself now is autonomous. And, you know, you've seen what we did with MoveWorks, the agentic front door to the enterprise, and VESA, which is human and non-human identity, and now the security move with Armus on top of an unbelievable core.
By the way, we integrated these businesses in 20 days. 20 days. So a lot of companies don't have the engineering power to say they can do hard things quickly. But, you know, we're blessed with some real talent here. It's very impressive. I have sold companies to, you know, large enterprise software vendors where it takes like a year and a half of rebuild to get some value out of it. Totally. Yeah. I think it's a really good historical reminder that people forget that there was this fear about the hyperscalers as well, which, as you mentioned, have become very important to all of our businesses.
And yet have not replaced the need for, you know, workflow software and platforms. Yeah, as you said, you know, actually are very good partners, you know, and on the back of ServiceNow franchise, get billions in workloads into those clouds. And they're all such great companies, but they all tend to do different things super well. So for the customer to have choice is also a great idea. Just like they'll want choice on the language models and us not staying in the way of that and giving choice, but acting as that control tower is a huge competitive advantage or differentiation, whichever your perspective might be.
“If you're serving one function and what you do is not tremendously high value add”
“90% of our customer service cases now are managed by agents.”
When you think about, you're just describing, you know, ServiceNow is growing about 20% a year, 13 plus billion in revenue trailing. It's a massive business growing at scale. I think one of the things that's so interesting about this SaaSpocalypse narrative is, you know, many of the companies as described are actually like doing really well on fundamentals.
signals um what are the signals you look for in your own business besides you know what customers tell you they want to do with you right um like quantitatively or otherwise let's say like what we're doing in ai is working well the most important thing is we've expanded the boundaries of the platform so we have a company that's operating globally we operate across multiple industries in the companies that we serve. We serve everything from IT to the employee experience to our fastest growing TAM, customer relationship management, obviously all the work that the creators do, and security, as I talked about. So what I'm looking for is the adoption of the AI control tower for business reinvention. And are we the agentic front door to the enterprise?
Are we managing the humans and the non-human identities? Are we connecting in the workflow data fabric all of the nodes that are operating in an enterprise? Whether it's a data lake, a hyperscale, a language model, a system, a record, all those things should go through the central nervous system, which is ServiceNow. And obviously, when I think about IT, we know the people, we know the places, we know the things. When I think about OT, we actually know the networks, the devices that reside on them, the critical infrastructure, the shadow IT, the disconnected controllers in the case of a manufacturing company, as an example.
So this amazing real-time insight and visibility into how that company is running and how we can make that company run better, that's the ethos of everything in terms of the customer relationship, that we know more, that we care more, and that we can do more for that customer than any other enterprise company in the world. That's the game plan. And, you know, for my money, what else do I look for? I look for the AI and the assists that the agents are doing to help the humans in the companies we serve. And I want to see that the trend line of those assists and the consumption of that innovation is really going right and up to the north side of town, because by doing that, you've solidified your position as super important to the way the company actually runs.
And not to mention the fact that the shareholder value creed. takes on a whole new meaning once you kick in that consumption model on top of everything else.
“And if AI does make us better, we should see that in the ultimate profitability of the company, the revenue per employee of the company.”
“how do I transform the company in keeping with the CEO vision or the management team's vision?”
I want to close up with two maybe more personal questions. You have a lot to cover with ServiceNow, but you're also just an interested guy. What inspires you or makes you curious in AI or elsewhere in technology outside of what you're doing with ServiceNow? Well, I'm fascinated by so many things. what really interests me in technology is how it will truly improve the world, the human condition. It could be an environmental conversation. It could be what we're seeing happening in outer space. It could be a global corporation trying to do unique things in a world in new places that they've yet to conquer, but they can do so with technology now and AI, and they can simulate a presence that might not actually be physical, but it could be unique, virtual, and new.
There's new routes to market, there's new channels, there's so many new things that could be done. So I think that this is the era where everything really does evolve and possibilities exist where it just wasn't possible three, four, five years ago. So I find that, you know, it goes back to the quote that I put in the book, since you mentioned what is dream, when the great Robert Kennedy once said, you know, some men see things as they are and say, why? I dream things that never were and say, why not? So I always try to look at things that didn't exist or don't exist with the application of technology or just a great dream.
What's possible? And then in terms of just the day-to-day in between your dreaming, what is the day in the life of Bill McDermott as ServiceNow CEO look like? Well, it depends on where you're physically at at the time based on what you're doing because the time zones are all different. But if you're in California, which we are today together, you know, you start your day off. It's really easy to understand this. With Europe, you migrate yourself then to the United States and you wrap up with Asia. So you always have to keep the tempo around the time zones and what's happening in the global economy.
I just try to be a global person and be a leader that's involved in all dimensions of the company in any time zone in the world. So that's one aspect of it. And you're talking to your teams there, hearing what's going on with customers, what's going on with them. Today, I've been in two out of the three with the regions of the world, and I'll finish up with the third. And absolutely, I want to hear what's going on with them, what's going on with the customer, what's going on with the business, what's going well, what's not going well, based on where they're at at any one moment in time. I can see and I feel things very deeply, and I'll offer my suggestions.
I try not to make the decision for everybody, but I'll offer my suggestions just on observations. And then, you know, we have an open, honest, riffing relationship on ideating on something, and then ultimately we get someplace quick. You know, there's no time to screw around. We got to get to the point and move on. A lot of time with customers. You know, I feel that I really get grounded with the customers and understanding what they're trying to accomplish and how I can help them. And, you know, a lot of people talk about, you know, sales and, you know, the idea of running corporations. It's all based on the customer and the customer alone.
They determine whether you win or lose. And if you never lose that in your heart, you're closer to success than failure. The other thing is I listen to the employees, you know. for example yesterday I started my day with 17 conversations with 17 quota carrying reps wow that's a lot okay 17 and I got 72 on my calendar this month 72 and it's inspiring because anytime you need to feel like feel good talk to the people that are closer to the customer And you realize just how great your company is, how great the people are, how smart they are. And, you know, they have so many good ideas and they're doing so many good things.
You know, one woman said to me yesterday, you know, she was most proud of the health check of her customer. And she told me all about the customer. The health check is our heuristics around customer satisfaction, the performance of the system and so forth. And it just inspired me. And then, you know, always try to do, you know, one-to-one, one-to-few, and one-to-many. And last night, I, you know, wrapped up my day with 800 executives from Brazil. And it was, like, amazing. And they wanted to, you know. Talk about leadership and many of the things that, you know, you want to talk about. And I think everybody is in the mode right now where they want to learn.
They want to experience what you think and they want to grow. And they are uncertain. And to some extent, you know, they don't have all the answers. And sometimes they're even afraid. And I explained to them, you know, don't look for the escape hatch. you know this is the moment when leaders really matter because as the waters get choppy you know we see who's tough and who's not and when the tide goes out you want to be fully dressed and even if things don't look so good you'll figure it out if you're fully dressed and you're ready for the battle and i think that um this is bringing out the best and real leaders and I live for this moment.
We seem like a leader for that moment. And I love the confidence that you have that other leaders want to meet that change too. Thank you, Sarah. Awesome. Thanks so much, Bill. It was an honor meeting you and spending this time with you. Thank you very much. Find us on Twitter at NoPriorsPod. Subscribe to our YouTube channel if you want to see our faces. Follow the show on Apple Podcasts, Spotify, or wherever you listen. That way you get a new episode every week. And sign up for emails or find transcripts for every episode at know-priors.com.
