The NY Jets’ Mike Tannenbaum and SAP’s Bill McDermott: Creating Leaders On and Off the Field

New York Jets general manager Mike Tannenbaum has always been interested in what makes successful leaders tick. While still a young trainee and lower-level employee in sports management, he started calling leaders he admired to get their thoughts on which qualities were the most important. “When I became general manager of the Jets [in 2006], people suddenly started answering my phone calls,” Tannenbaum noted.

Among those who returned a call was Bill McDermott, co-chief executive officer of SAP, the German business software firm. It turned out that McDermott, who is based at SAP’s North American headquarters in Newtown Square, Pa., was a huge Jets fan. Although Tannenbaum was seeking McDermott’s advice, McDermott was impressed by Tannenbaum’s ability to turn a 4-12 team into a perennial playoff contender. “Mike was clearly a man who knew what to do and did it,” McDermott noted. “We could both learn from each other.”

An odd pairing on the surface, McDermott and Tannenbaum appeared together to discuss what works and what doesn’t for leaders in sports, business and beyond at a recent Wharton Leadership Lecture. The talk was moderated by Kenneth L. Shropshire, a Wharton professor of legal studies and business ethics and director of the Wharton Sports Business Initiative.

While McDermott acknowledged the stress related to receiving quarterly earnings reports, he noted that Tannenbaum and the Jets have to put themselves on the line every week, season after season. “The only way to do that is to create a great team and have them all on the same page all the time,” said McDermott. A big part of that, according to Tannenbaum, is making sure your employees can move on quickly after a loss. “It is relatively easy to do that with about 200 people,” noted Tannenbaum, who went to work for the Jets organization in 1997, “but Bill has to do that with 55,000 employees. That is what is tough.”

According to McDermott, who joined SAP in 2002 and was appointed co-CEO in 2010, gaining employee buy-in and focus on common goals was one of his greatest challenges after arriving at the software firm, which was coming off a run of five CEOs in six years. “I had done my homework. I had competed with SAP at other jobs, and I used to win all the time against them. These guys were the ‘Bad News Bears’ and could not get out of their own way,” he said. “They had fantastic technology and a deep-seated loyalty among employees and customers, but somehow they missed estimates 24 quarters in a row.”

According to McDermott, there had been too much “wishy-washy” leadership at SAP, and many managers at the firm were afraid to tell the employees working under them what they were doing wrong. Although he did fire people, overhauling the firm was more about getting the staff on track than getting rid of employees. “The most important thing a leader can do is give people feedback,” McDermott said, recalling a meeting where an executive was complaining about a mistake made by an employee. “‘What did he say when you told him about it?’ I asked, but there was silence.” Employees deserve the respect of candor, McDermott noted, and they need to know what is expected of them and have a clear understanding of their employer’s strategy and culture.

McDermott and Tannenbaum agreed that a leader has to focus on promoting an overall vision for his or her organization rather than dwelling on the small stuff. For Tannenbaum, doing the job right is not about having a marginal winning season, but heading toward a Super Bowl championship. For McDermott at SAP, success is not defined by simply breaking into some aspect of the technology business to make a profit, but to be the best in whatever area the company decides to enter.

“Our thing is to go big or go home,” McDermott said, noting that SAP has had many opportunities to buy companies that would catapult the firm into a new business category. But the company is looking for acquisitions that would make SAP number one in a particular sector. “I want something that will shake the world, as opposed to something small that is incremental, and, frankly, a distraction. If you spend less time on the big thing, it takes energy and time away from what your goal is…. You do not do something just because everyone is doing it.”

That holds true for running a football team as well. Tannenbaum, Jets coach Rex Ryan and other executives talk regularly about their specific long-term strategy for the team. “With all due respect, we do not do things because the New England Patriots are doing it, or do things the way the Philadelphia Eagles do. We have a Jets vision, and with each move we make, it is evaluated within that vision.”

In 2010, the Jets made 208 player-related personnel moves, Tannenbaum noted. “I can assure you we did not go 208 for 208,” he added. “But each time, we said, ‘Is this a move we feel is good for the Jets? Does this move head us toward the Super Bowl?'” Similar to McDermott’s experience at SAP, there were plenty of good players out there who just did not fit into the Jets system. “You can’t listen to talk radio or the blogs. You have to focus on what will be good to get us to the Super Bowl. And when it does not work out, you have to forget that one and move on.”

Character Education

When hiring new employees, McDermott and Tannenbaum are looking for qualities beyond what is listed in a player’s or job candidate’s resume. As an example, Tannenbaum recalled a 2007 tryout with several highly regarded players. “Two nights before the draft, I happened to be in the car driven by the guy who had driven about 30 of the pre-draft guys.” Tannenbaum asked the driver to give his impressions of the players. “He said this one particular guy was a real gentleman — always with ‘please’ and ‘thank you’ and respect even for the driver and everyone else around.”

The exchange changed the way Jets leadership handled the player interview process. “When we brought a guy in for a physical, [we started looking at] how did he treat the MRI technician? When he was on the cell phone in the car, did he treat the person on the other end with respect? What did he say to the equipment manager? How did he act with the waitress? Your character is what you do when no one is looking. That will make for a better team, where everyone knows what everyone else’s job is, and we all work together.”

McDermott agreed. “[From a resume] I can see you went to Wharton or got this grade point average,” he said. “But I want to go back to the beginning. My first questions are: Where are you from? What is your Mom all about? What do you believe in? What inspires you? What jobs did you have growing up? I can tell you for sure that what you become at 50 is what you were at five. If I can find that out about your character, I will know whether you can fit in with the SAP vision.”

An effective leader is one who makes a decision and sticks to it, the two men said. “We may haggle about things during the week, but once that opening kickoff comes, we have our plan and we are not going back on it,” Tannenbaum noted. “Preparation leads to confidence, and if we are confident in our vision, we will more often than not succeed.” McDermott recalled a meeting with an executive who came to him on the Monday after a big strategy meeting. The executive told McDermott that he had thought the matter over during the weekend and wanted to propose what he thought was a better plan.

“That would have been interesting [before the meeting], I told him, but now I had many more decisions to make Monday, Tuesday and every day,” McDermott said. “A wishy-washy decision is worse than no decision at all. I have 55,000 employees who will dig me out if I make a bad decision. But if I don’t make a decision, I have 55,000 employees going nowhere. Fear of failure is no excuse. Lack of vision and movement means you are not a leader.”

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