25 minute read
BENIOFF’S WAY
The Salesforce founder changed the world by ushering in the cloud computing revolution more than two decades ago. His latest disruption may have an even bigger—and more enduring—impact. “We’re not coming back the way we were.”
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BY DAN BIGMAN AND TED BILILIES
IT’S CREEPING UP ON 6 P.M., AND AT THE VERY TOP OF SALESFORCE TOWER, 41
floors above Bryant Park in the heart of midtown Manhattan, company founder and co-CEO Marc Benioff is having one of the more important discussions of his year. He’s holding court with an elite group of Salesforce superusers—“Trailblazers” in the company’s lingo. Over spring water and finger foods prepared by Michelin-rated chefs, surrounded by a panoramic view of New York City, they’re dissecting an early draft of Benioff’s September keynote for Dreamforce, the 40,000-person-strong annual takeover of San Francisco that’s the centerpiece of his year.
From a product standpoint, the purpose of this year’s presentation is the formal rollout of “Genie”—a substantial rewrite of the Salesforce data platform that’s at the heart of the $26.5 billion (FY2022 revenue) company, one that will allow for more “customer magic.” It brings drag-and-drop ease and efficiency to the customer-data revolution for companies from the enterprise scale of Ford down to midsize marketing agencies.
But exciting as it is, Genie isn’t what’s really resonating in the room. What’s really got them revved up is the idea of a “family reunion” at Dreamforce. “The last time we all got together was in 2019,” a young superuser in a checked blazer tells Benioff. “This is the first time we’re going to be back together since then. You should make a bigger deal about that.” Benioff nods in agreement, looks over at his head of marketing, who meets his eyes. Connection. Reunion. Family. Got it. It’s a tiny moment that speaks to something much, much “For more than two larger: While Benioff’s style of decades, Marc has been business, liberally combining enviroa towering exemplar of mentalism, higher purpose and a Dawhat it means to be an vos do-gooder tag innovative and forward- may elicit eye rolls in jaded newsthinking leader.” rooms and redder statehouses, it —Ken Frazier, Former CEO, Merck resonates like crazy with millions of his customers and employees.
The Connector
That’s because, in an era of social media bubbles and deepening societal disconnection, Benioff’s way—emphasizing social responsibility, trust, environmental stewardship and massive charitable giving—is catnip to the community he’s convened. It makes them feel like part of something larger, something with meaning beyond software or nailing quarterly goals. It’s fueled Salesforce’s perennial presence atop best places to work lists around the world for more than a decade. And it is helping to propel one of the most incredible growth stories in modern business, a revolution that, in many ways, may come to eclipse 58-year-old Benioff’s first disruption: leading software from desktop computers to the cloud.
The company’s 78,000-plus employees— up from 4,000 in 2010—are part of a global Salesforce “ecosystem” involving millions of businesses, independent consultants and app makers generating more than $1 trillion of estimated economic activity a year, on track to hit $1.6 trillion by 2026.
From 2017 to 2022, the company’s net income clocked a compound annual growth rate of 35 percent, and its five-year total shareholder return is 57 percent, a performance helped by co-CEO Bret Taylor, who ascended to the job in 2021, and juiced by a recent string of blockbuster acquisitions, including Mulesoft for $6.5 billion in 2018, Tableau for $15.7 billion in 2019 and Slack for $27.7 billion in 2021.
Meanwhile, the company pioneered the adaption of what’s come to be known as the 1-1-1 model of corporate philanthropy—giving away 1 percent of profits, 1 percent of equity and 1 percent of employee time—annually. As a result, Salesforce has donated more than $500 million, and its employees have volunteered over 7 million hours of service time during the past 23 years. Benioff is personally one of the top philanthropists in the United States, donating more than half a billion dollars in the past decade, including $100 million in 2021 as part of his effort to plant more than a trillion trees to combat climate change.
This singular combination of doing incredibly well while also doing an incredible amount of good led his peer CEOs to name Benioff Chief Executive’s 2022 CEO of the Year. “For more than two decades, Marc has been a towering exemplar of what it means to be an innovative and forward-thinking leader,” says Ken Frazier, the former chairman and CEO of Merck and our 2021 CEO of the Year, who served on this year’s selection committee. “As the founder and CEO of Salesforce, he consistently has achieved exceptional business and financial results for customers, employees and shareholders while standing tall in the public square for policies and principles that will foster greater sustainability, prosperity and equity within the business community and broader society.”
“Marc created a company and helped create an industry,” says Brian Moynihan, chairman and CEO of Bank of America
and our 2020 CEO of the Year, and also a member of this year’s selection committee. “Salesforce’s track record is among one of the premier companies in recent decades. At the same time, he has proved a company can deliver on profits and purpose and do it consistently. He has championed stakeholder capitalism and demonstrated its value.”
‘No Software’
The creation story of Salesforce is well known: A young, talented programmer growing up in the heart of San Francisco during the wild days of the 1970s and ’80s, Benioff came of age as a top salesman at Oracle under Larry Ellison during the company’s most explosive period of growth in the ’90s. Rather than sticking it out for the lucrative long haul there, he quit, and with Ellison’s support, started Salesforce in his apartment in 1999.
For those who weren’t there, it’s hard to grasp how unconventional Salesforce’s model was at the time. Software was something you installed via disk on your desktop PC or the realm of secretive armies of “IT guys” and their inscrutable, blinking, overly air-conditioned server farms. Benioff pushed for something new. Rather than buy and manage a room full of your own machines, you could simply lease his solution, a “software as a service” CRM housed “in the cloud,” on offsite servers his team monitored, upgraded and made easily scalable depending on your needs. Salesforce listed on the NYSE in 2004, and over the next decade, with a brash “No Software” marketing campaign and a series of bet-the-company pivots, Benioff proved to be that rare Silicon Valley founder who scaled his leadership in step with the explosive growth of his company.
All the while, he was pairing his desire for growth with a passion for charity, fueled by a family with a legacy of social service, including his grandfather, Marvin Lewis, a crusading trial lawyer known in San Francisco as the major force behind the creation of the Bay Area Rapid Transit system. As Benioff’s company grew and his personal wealth ballooned, so did his conviction that business had a more muscular role to play in society. Through his involvement with organizations like the World Economic Forum, Benioff famously advocated for a new “stakeholder” capitalism model, with a strong emphasis on the environment and employee well-being.
Covid marked another transformational period for Salesforce. Benioff—to the dismay, at times, of other CEOs—was outspoken about adapting a more flexible workplace. Salesforce began practicing “success from anywhere,” allowing many employees to forgo ever coming into the office, a policy that remains in place today.
But Benioff has sensed a deep desire by many in the Salesforce ecosystem to get together—in person—once again. He’s now experimenting with the Salesforce Trailblazer Ranch. Modeled on GE’s legendary Crotonville Training Center, it’s a location-TBD outpost where Salesforce’s culture can be imparted to new employees and renewed by veterans in multiday offsites and team meetings. How that will come together is still, he admits, very much a work in progress. Like so much else in his world, The Ranch feels experimental, unconventional, a bit ahead of its time—and yet tough to bet against given the Salesforce track record, much like Benioff himself.
Under Benioff, the software company he started in his San Francisco apartment has ballooned into one of the most influential technology firms in the world, with a long-term revenue trajectory that shows no signs of slowing despite the decades. $13.3B
$17.1B $21.3B
$3.1B $4.1B $5.4B $6.7B $8.4B $10.5B
ANNUAL REVENUES
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Chief Executive talked with Benioff in late August about his journey from startup founder to enterprise leader, the changing role of the CEO and how he stays a step ahead of whatever comes next. The conversation was edited for length and clarity.
It’s a time of tremendous change, a lot of volatility. How do you lead differently in times like these? What are the keys?
Number one—always number one—is knowing what is important to you and your core values. When you have this much volatility and this much change going on in the world, when things are uncomfortable or frustrating or difficult, it fundamentally gets back to: What is the most important thing to you? What are your core values, and how are you going to operationalize those into your company or into your life or into whatever you’re working on? That is more important than ever.
At Salesforce, it’s trust, it’s customer success, it’s innovation, it’s quality, it’s sustainability. The values are your true north. When we went through the pandemic, one reason that we were able to succeed and accelerate was we just kept coming back to our values over and over again. What is it that we really want to achieve here? What is our number one thing that really matters to us?
You’re one of the few people who have gone from founder to enterprise CEO. You’ve had to continuously learn. How do you learn? How do you go to each level of leadership?
We talk a lot about beginner’s mind. The Japanese have this great word, shoshin, this idea that everything has to be looked at anew. When we look at the pandemic, that was a moment where we all had to kind of say, “What’s really happening here, and how are we going to go forward?” Things that applied before no longer applied. The way we worked didn’t apply. The technology we were using didn’t apply. For a lot of CEOs, they were able to succeed because they started with a blank piece of paper and said, “Okay, now what am I going to achieve?” People who tried to do what they were doing before found that turned into a series of obstacles for them. It prevented them from moving forward.
One of the reasons I enjoy going to Kyoto, Japan, a couple of times every year and going to those gardens is because it reinforces to me, are you working on your beginner’s mind? Are you taking time? We even bring that into our business at Salesforce, where we have Zen monastics come in and guide our executives through a beginner’s mind meditation. We just had one last week. We had 500 executives come together. We had two monastics there. A lot of our executives have never meditated before, but I think in today’s world, they need that kind of grounding. They really need that ability to put the stress, the anxiety, the fear away to get a little bit clear about what is it that they’re actually trying to achieve right now.
How do you carve out the time to do that?
A meditation practice has really paid off for me as CEO. Because I had that before I even started the company, it’s paid off for decades where I’m cultivating my beginner’s mind. I’m trying to encourage my executives and my company to do the same thing.
At the start of every year, we write something called the V2MOM, which answers five questions: Vision, what is it that we want to achieve for the year? Values, what is the most important thing to us, in priority? Methods, how are we operationalizing those values? What are we actually doing? Value by value, how are we actually creating that into the business? Obstacles, what is preventing us from achieving each one of these values? And measurements, how do we know that we have
succeeded? What are our KPIs? Those five simple questions are remarkably difficult for an organization or, sometimes, for an executive. And it’s going to change. When we “You have to trust yourself. If went through the pandemic, all of those you lose the trust in yourself, answers changed. So, you have to be then you’re in trouble.” ready to shift and change also. That’s one reason why you need to be developing a beginner’s mind, so that when you ask those questions, you’re not just repeating the same answers over and over and over again, that you’re trying to come up with something new.
You have spectacular people on your team. How do you put those A players in place, and when do you know to make a change?
In terms of management teams, different managers and different executives have different capabilities at different levels of the business. As the business scaled, we have had four or five CFOs, four or five heads of sales, four or five heads of technology, four or five heads of marketing, four or five heads of every major function in the organization, because different people are needed at different levels.
Sometimes, somebody can go all the way from the beginning of the company to where we are now. I’m an example, and my cofounder is an example, but not every person is going to be able to move in that kind of scale. So, that’s something that you just have to have your eyes open for. A lot of founders hold onto their management teams too long, or aren’t willing to hire quickly enough or fire quickly enough. In today’s world, hiring fast and firing fast become more important than ever.
Founders sometimes get tripped up by feeling loyal to the people who were with them at the beginning even when they’ve clearly outgrown the position. Any advice to CEOs in that situation?
It’s important to have loyalty, in our friendships, in our marriages, in our relationships. In business, loyalty also matters. But realism also matters. Being able to look and say, “Is this person really going to get me to where I want to go?” If they’re not, you don’t necessarily have to fire them or remove them from the company. Maybe they can be repositioned.
It’s not uncommon for a head of sales who is managing 10 or 20 people, or 100 or 200, or even 1,000 sales executives to not be the right person to manage 10,000 or 20,000 sales executives. That doesn’t mean they can’t be a great chief customer officer. It doesn’t mean they can’t still motivate and inspire a team, but maybe their role on the team can change. That’s extremely important. You have to have that flexibility when you’re looking at people.
How do you engage with people to make those calls? How do you know when it’s time to make these kinds of changes?
You have to trust yourself. If you lose the trust in yourself, then you’re in trouble. If I don’t trust myself and I don’t have trust and exude trust, then I’m going to have a problem. This has to be the highest value in the organization, because if you do end up with an executive where people don’t trust them, or they feel like there’s a problem, that’s an issue.
We all have had that situation where all of a sudden there’s an executive in the organization who people don’t trust. There could be an integrity issue. There also could be a substance abuse issue. There could be lots of things where all of a sudden people are like, “I am not able to trust this person’s ability to guide us or lead us or make a decision.” This is the moment where you have to come in and make an immediate change.
Can you tell us about the Ranch?
The thing about the Ranch idea was that it was clear to me that people still need to get together, but they were leery about coming to the office for whatever reason. We’re in the middle of a pandemic. So, I said, “Well, maybe they’d like to go to the Ranch.” Of course, there was no Ranch. It didn’t exist. Nobody understood what I was talking about. And I said, “Yes, we’ll have a Salesforce Ranch. And it will be amazing and magical, and people will be able to go there and have an experience.” Everyone was ready to go. Of course, it didn’t even exist.
The Ranch is a code word for “we’re coming
back in a new way.” It doesn’t have to be someplace in Montana. It just has to express to everybody that everything’s changed, and we’re going to come back together in a new way.
It’s not that we aren’t successful or productive in a pure digital environment; we are. In some cases, people will never come back to the office. That’s just how it is. Some CEOs get upset when I say that. We’re not coming back the way we were. We have to come back in new ways.
We’ve gone through the Great Resignation, the Great Relocation. Ultimately, this was the renegotiation between us and our bosses and ourselves and our families. What makes you happiest? Where do you want to live? What do you want to do? What are you doing with your life? This is a very powerful moment for everybody. Everybody had a chance to look in the mirror and say, “Where am I?”
That’s why you saw a lot of CEOs leave their jobs in the last few years. Their renegotiation with themself was, “Well, I’m not in a place where I want to be, so I want to make a change.” When you look at that, then you can say, “Okay, what are some of these other areas now that we need to do?”
In the world, we need to look outside and say, “We need, I would say, a regeneration of our planet.” That’s what inspired us around the idea of planting a trillion trees. These things are extremely important right now, that we have to keep looking at how we’re getting to the next level. It’s a re-creation.
Is some of this about competing to hire more talented people?
Absolutely. You have two kinds of CEOs. Those who are giving mandates: “You must be in the office four days a week, that’s how it is.” Or reasons: “We need to be in the office for these five reasons, because we’re doing professional development, we’re launching this new product, we’re mentoring our young executives.”
If you can’t articulate your reasons, your mandates are not going to work. They’re going to work against you. You can see now the number of employee letters that have gotten created because of mandates. You have to be aware that it’s a different environment, and how you’re communicating with people has to be different.
It’s not just here. I’ve been in Australia, Japan, Europe. I’ve been throughout the United States. It’s a little bit different everywhere, but it’s remarkably similar in that this has changed everybody.
You led one of the biggest revolutions in technology, the move to the cloud. Where do you see technology going in the years to come?
It’s becoming more than just the fabric of how we operate. We don’t even know when we’re using technology in a lot of cases. That’s also the scary part of technology, that it’s more intelligent and more automated and more real-time. That’s where you can see that certain countries have very significant surveillance operations now. That is not where we were with technology only a few years ago. I recently landed at the airport from another country, and the customs officer who came in on the plane just had a camera. They didn’t even know my passport number, and they knew who I was. We’re on a new level with technology. We’re not going back.
It fundamentally is changing everything, and it’s also why values matter. We’ve seen how certain companies, especially in social media—and I’ve spoken about this to exhaustion—have basically put their values aside to increase their monetization. They don’t care about the fundamental interaction with the consumer or what they’re doing with the consumer. In foreign countries that maybe don’t have the same kind of watchdogs that the United States has, they don’t realize the kind of shenanigans that have happened from these social media companies.
On the positive side, we have the ability to be better educated, healthier, more connected to our friends and families. Today, you can go in and have a scan of your heart. You will know the exact health of your heart. My father did not have that opportunity. He didn’t know what the health of his heart was
until his doctor said, “You need to have a bypass operation.” Everybody has that story in their family from our generation. But in the future, I don’t think that will be true. People will know more about their health in real time. They’ll be able to tune their meds. They’ll have the ability to live longer, because we’re using technology in new ways.
You’ve been at the vanguard of a school of thinking that says, businesses should be a force for good. In the decade to come, how do you see the role of business changing?
Business is the greatest platform for change. This is a fundamental thought that permeates our whole company. “In today’s world, with We manage for all of our stakeholders, technology, if you’re not not just our shareholders. These are listening to your employees, core values of ours. you’re going to have a very We don’t use Milton Friedmanism. We’re serious problem as a CEO.” using the idea that, yeah, shareholders are important, but employees are, customers are and our community is. Public schools are important, and the planet is a key stakeholder, which is why we’re a net zero company today, why we build products to help companies become fully sustainable. This is extremely important. Some of our best leaders in the world today are not in government. They’re in our businesses, and we all know that. They don’t want to go into government because they don’t want to be thrashed around with a bunch of nonsense. But these leaders need to be empowered and enabled to improve the world.
There’s been pushback though—some people have branded it “woke capitalism.” What do you say to that?
I understand how people can misinterpret that. What they don’t realize is that companies have these assets called employees in them. And in today’s world, with technology, if you’re not listening to your employees, you’re going to have a very serious problem as a CEO. People call it woke capitalism right up to the point where I’m not actually listening to my employees when they have a serious problem. [In 2015], our employees in Indiana were upset about a law that was being passed that was discriminating against their LGBTQ community. They asked us to talk to the governor, Mike Pence, and say, “Please change the law,” and he did. But when we first did it, it was like some revelatory thought that we should be able to say, “Please don’t discriminate against our employees. They’re upset.” But if I don’t advocate for my employees’ well-being, then who will advocate for them?
Maybe this isn’t the traditional role of the CEO, but it will never go back because employees are going to hold their CEOs accountable for their values and also for taking care of them. My job, fundamentally, is to have my employees’ back. It’s not to support any one particular group or to advocate for any one particular belief or any of that. It’s just, “Do I have my employees’ back?” It’s going to make them happier, more successful, and more productive in my organization.
But if [your] employees don’t think you have their back or they’re afraid, then you won’t have the company that you want. Your employees have to feel like you’ve got their back. With so many crazy presidents, mayors, governors, elected officials all over the world, employees need to know that companies—who have tremendous resources—that there’s some button that they can push and say, “Help me.”
If they don’t feel that, they’re not going to stick around in your company. They’ll find a company that is that. It’s not woke capitalism. It’s just paying attention that you have many stakeholders. If you don’t realize that, then you’re blindfolded as a leader.
I heard a political leader, I won’t tell you who it is, but a significant one, recently saying, “Well, companies should stay away from ESG.” And I’m like, “Well, that’s interesting right up to the point where our employees don’t agree with you, because then I’m not going to be able to hire and recruit and have a company. Our employees want to belong to companies that are taking care of the environment, that are practicing the right things for society, that are doing mentoring in schools, that the governance is
happening in the right way.”
This isn’t about right or left, or it’s not about any political belief. It’s fundamentally about what kind of company you are building. Are you building a company that supports your key stakeholders, like your employees and your customers? You go down this elevator right now and walk out on the sidewalk and look around. Are those not my stakeholders? If my employees think that I don’t even care about the people on the sidewalk, who are right outside our building, then they know for sure I don’t care about them. Somehow Milton Friedman convinced us of the wrong thing. It’s not only about shareholders. It can’t be. If you do make it that, you can be around for a little while, but you’re not going to be around for hundreds of years.
I’m sure CEOs call you and ask for tips on this. What do you tell them?
I talk to CEOs of the largest companies in the world all the time. Especially when they get into trouble, they call me first. What I tell them is exactly what I’m telling you. Reconceptualize your relationship with your employees, number one. Number two is your communities. When they get out there and they say, “Well, I’m not going to talk about it,” or, “This isn’t how I look at business,” they abstract themselves as CEOs, they disassociate themselves from their employees. If they feel like they’re separate, when they don’t feel like they’re connected to everybody or everything, that’s when they’re going to get into the most trouble.
You mentor CEOs. What’s your best advice on how CEOs can school themselves for what’s coming?
It comes back to the beginning, the first thing we talked about, shoshin, beginner’s mind. Good for that CEO who does call me and says, “I am running one of the largest companies in the world, one of the most well-known brands. I’ve been in this company 40 years. I worked my way up to be the CEO. I think something’s not right. Help me.” What’s your situation? “Well, I seem to have a problem where I received this letter, saw a news article, or a board meeting is being called because I said something I should not have said.” I say, “What is it that you said?” In all cases it’s that they forget that they are connected to everybody else, and everything is connected.
When a CEO reaches that pinnacle of their career, and yet they actually think they are not part of a total ecosystem, then my job is to hook them back up. That’s it. That’s what I do.
I have had to navigate a lot of complex situations as we’ve grown this company from an idea to almost 100,000 employees. I’ve gone through all of these crazy things that can happen to you, maybe not everything, but the vast majority. What I find is that when I’m talking to CEOs who are in trouble, it’s because they’ve lost that connection.
The CEOs who will never have that problem are the ones who come across almost as priests, as rabbis, as monastics. They are people who maybe seem a little more spiritual, have a little bit more of a religious ethos about them. They’re very impressive, these leaders. It’s interesting. In a lot of cases, I talk to them and their brothers and sisters actually have gone on into religious areas. Maybe that’s part of it; their family had values that never let them get disconnected.
This is the “do unto others.”
It can be do unto others, but ultimately it’s not just do unto to others. It’s ultimately to realize that we’re one and we’re connected. When you lose that thought, then you’ve lost the whole thing. CE
Dan Bigman is the editor of Chief Executive. Ted Bililies, managing director and chief talent officer at AlixPartners, serves as an adviser to the CEO of the Year selection committee.
CHIEF EXECUTIVE OF THE YEAR 2022 SELECTION COMMITTEE
ADAM ARON President and Chief Executive, AMC
KEN FRAZIER Executive Chairman, Merck & Co. 2021 CEO of the Year
DAN GLASER President and Chief Executive, Marsh & McLennan
FRED HASSAN Former Chairman, Bausch & Lomb; Partner, Warburg Pincus
MARILLYN A. HEWSON Former Chair and Chief Executive, Lockheed Martin 2018 CEO of the Year
TAMARA LUNDGREN President and Chief Executive, Schnitzer Steel Industries
BRIAN MOYNIHAN Chairman and Chief Executive, Bank of America 2020 CEO of the Year
ROBERT NARDELLI Chief Executive, XLR-8
THOMAS J. QUINLAN III Chairman, President and Chief Executive, LSC Communications
JEFFREY SONNENFELD President and Chief Executive, The Chief Executive Leadership Institute, Yale School of Management
CARMINE DI SIBIO Global Chairman and CEO, EY
Exclusive Adviser to the Selection Committee:
TED BILILIES, PH.D. Chief Talent Officer, Managing Director, AlixPartners
