October 18, 2019 / 2:24 PM / 24 days ago

Breakingviews - Review: Salesforce’s activist CEO has solid pitch

SAN FRANCISCO (Reuters Breakingviews) - Marc Benioff is spreading his activist CEO gospel. A new book by the Salesforce.Com boss argues that doing good is a business imperative. Though his call to action at times reads like an advertisement for the $128 billion company, he demonstrates how helping society can also boost the bottom line.

Marc Benioff, chairman and CEO of Salesforce, speaks at the WSJD Live conference in Laguna Beach, California, U.S., October 26, 2016.

“Trailblazer: The Power of Business as the Greatest Platform for Change”, written with former Wall Street Journal reporter Monica Langley, is well-timed to address the growing questions about capitalism’s negative side effects. The Business Roundtable, which brings together the heads of the biggest U.S. companies, in August called for firms to be run for the benefit of all stakeholders, including employees, rather than just investors. Companies are also stepping in when policymakers fail to act. Walmart announced in September that the retailer would stop selling handgun ammunition in the wake of mass shootings.

Benioff preaches that values create value and calls on other companies to join him. The cloud computing guru makes a business case that younger generations are devoted to higher purposes, which will affect how they decide where to work and what to buy. For businesses to thrive, he says, the question to ask is no longer “are we doing well?” but “are we doing good?”.

This mantra is common among CEOs these days, but the San Francisco native was ahead of his time. When Salesforce started in 1999, its co-founders pledged to donate 1% of its products, 1% of its equity and 1% of its employees’ time to certain causes. This has so far resulted in almost $300 million in grants and workers volunteering four million hours. Meanwhile, shares in the customer-management software provider have generated a 3,500% return since it went public in 2004.

The political dilemmas that Salesforce faced are the most illuminating. In 2015 Mike Pence, then the governor of Indiana, signed a law that critics said would allow discrimination based on sexual orientation. Salesforce workers in the state, home to the company’s second-largest U.S. office, said the measure sparked fear.

At first, it didn’t occur to Benioff to step in. It wasn’t until an executive pointedly asked what he was going to do about the growing backlash that he realized how Salesforce responded would say a lot about the company. He announced on Twitter that the group would dramatically cut its investment in the state.

His efforts to galvanize other executives met with a mixed response. Several ignored him while others criticized him for putting his own values ahead of those of investors. But some rallied round, including Apple boss Tim Cook, and Pence eventually compromised. The incident raised Salesforce’s profile and made it a more attractive place to work. The company’s revenue rose by nearly 25% the following year.

The early lesson in employee activism taught Benioff that if leaders won’t act, “they’ll have to face the bayonets poking up from below.” That’s even more true today. Last year, Alphabet-owned Google dropped out of an artificial intelligence contract with the U.S. Department of Defense after employee protests.

Doing good, or at least avoiding doing bad, is a constant process. Just last year, hundreds of Salesforce employees publicly opposed having the U.S. Customs and Border Protection as a customer at a time when migrant children were being separated and detained at the U.S. border with Mexico. As employees questioned whether Salesforce really stood behind its values, Benioff was cut off from the world on a “digital detox”. When he came back, he decided to appoint a chief ethical and humane use officer to ensure Salesforce technology wouldn’t be used for nefarious purposes. 

At times, Benioff comes across as self-serving. The book is sprinkled with laundry lists of causes that he and Salesforce have been involved in, like the water recycling system at the company’s San Francisco headquarters. He also weaves in references to helping customers like Home Depot after the financial crisis.

But Benioff redeems himself by showing he practices what he preaches. One of his most compelling case studies comes at the end of the book. A San Francisco ballot measure to slightly increase taxes for big companies to fund efforts to fight homelessness was unpopular when Benioff became a vocal proponent. Car-hailing service Lyft and payments group Stripe opposed it, as did Twitter Chief Executive Jack Dorsey. The feud between Dorsey and Benioff helped the proposal gain traction and it passed with about 60% approval from voters.

Benioff goes well beyond the platitudes mouthed by other CEOs by taking a stand on controversial topics. Just this week he called for Facebook to be broken up. These high-profile positions beg the question of whether he might follow in the footsteps of his grandfather, a former San Francisco supervisor, and enter politics. Whatever happens next, though, his demonstration of how doing good can pay off makes him a credible agent of change.

Breakingviews

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