Opinion: Salesforce should get used to having Marc Benioff in charge, because he’s always chasing his chosen successors
Salesforce Inc. twice promoted a seasoned executive to co-CEO, and both times were seen as signs that the cloud software pioneer had found a successor. last place for co-founder Marc Benioff at the helm.
But both of those chosen successors also chose to leave, as Benioff refused to step down, leaving himself and the company in a difficult position. Hiring another potential successor will be difficult after seeing respected executives Keith Block and Bret Taylor walk out the door, leaving the Salesforce path
CRM,
is in the hands of an executive who seems to have focused more on his many philanthropic and other ventures in recent years but still seems unable to fully transition the company. for new leadership.
Daniel Newman, founding partner and principal analyst at Futurum Research, said: “Marc struggled between wanting to relinquish control of the company, and seeing the stock drop in price, he started to come back. “.
Salesforce revealed on Wednesday afternoon that Taylor plans to leave at the end of the company’s fiscal year on January 31, to return to its “business roots”. It’s been exactly one year since Taylor Appointed Co-CEOafter being guided to the top after acquiring his software company Quip for $582 million in stock, an agreement is considered an acquisition.
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Benioff’s former co-CEO, Block, resign in February 2020, after only 18 months in this position. The departures of the side-by-side co-CEOs, each less than two years into the position and leaving without a solid destination, doesn’t say anything good about Benioff’s management style. , and the Salesforce co-founder looked hurt and surprised during a conference call while discussing the latest departure.
“We’re still a bit shocked, deeply saddened, and deeply saddened by the loss of Bret,” Benioff said when asked by an analyst about Taylor’s replacement. “And again I don’t need to tell you, he’s one of the best people I’ve worked with in my life and also an amazing person. And I also have to tell you that we have a lot of great people in the company.”
Benioff added that he is a good salesman and that he will stay with Taylor until he actually walks out the door. “The deal isn’t over until it’s over, but we have to tell you he’s decided to leave.”
There could be two workplace factors that prompted Taylor’s departure. One is that Salesforce’s growth is slowing — the company’s fourth-quarter revenue forecast on Wednesday was $900 million below Wall Street expectations — leading Benioff to be more aggressive in the months ahead. recently when the market got tough.
“After a year of steady declines and average growth — and this is a company that used to beat and elevate — it certainly didn’t realize its potential,” Newman said, adding that he believes Benioff’s thoughts were focused on how he needed to turn around and do more to get the ship to turn around.
Taylor can also see opportunity in the current tech downturn. Many analysts and entrepreneurs have noted that recessions represent great opportunities for those who can take advantage of them, and Taylor has a proven track record in growing software companies. immature.
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“Bret is an entrepreneur,” said Jason Wong, an analyst with Gartner Group. “If you are finally in a position to do that, then this is a really good time, knowing that over the next 12 to 36 months the valuation will be lower. It’s the right time when Bret does what he’s best at and Marc does what he’s best at, and that’s growing Salesforce.”
Before Quip, Taylor co-founded a company called FriendFeed that aggregates social media updates. Facebook, now Meta Platforms Inc.
META,
purchased FriendFeed in 2009, two years after its founding. It was decommissioned in 2015. For the past year, Taylor was also recently the non-executive chairman of Twitter, before it went private in the $44 billion acquisition of Tesla Inc.
TSLA,
CEO Elon Musk.
Put yourself in Taylor’s shoes for a moment: Imagine that you see the CEO, whom you expect to succeed, regain more control of the company during difficult times, and know that Your resume can get you many top jobs that you wouldn’t otherwise. must share the limelight. His current path, and the reasons for it, seems clear.
Whether Benioff will seek another co-CEO is a big question. Benioff was raised at Oracle Corp.
ORCL,
where Larry Ellison has stepped down as CEO, but still runs the company de facto as chief technology officer and president. Until Mark Hurd’s sudden death in 2019, Safra Catz and Hurd were Oracle’s co-CEOs for about 5 years, one of the rare instances where co-CEOs seem to be productive. and now Catz takes that position alone.
While Benioff sometimes gets the impression he’s trying to leave some of the day-to-day management of Salesforce, Wong said he would be surprised if Benioff stepped down anytime before 2026.
“He’s always talking about the $50 billion goal by 2026, I assume he’ll be there at least until then.”
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Benioff is a proven Salesforce leader, but Wall Street would still like to see a strong executive team around such a leader, especially one who has spent a lot of time in Hawaii in recent years. purchased Time magazine and was active in many fundraising activities. Investors were clearly taken aback by the news, with Salesforce stock down more than 6% in after-hours trading though mostly strong numbers.
“Given that Mr Taylor is seen as the ‘clear heir’ at CRM [Salesforce]this raises a lot of questions about the management team and frankly offsets some of the positive narratives around margins entering CY23,” Evercore ISI analyst Kirk Materne wrote in a note. on Wednesday night.
If Benioff doesn’t convince Taylor to return, he needs to change his approach if he hopes to find another potential successor who will truly stick with the company. He should either publicly or privately name the date he will transition to company president and stick to it no matter what, or should Salesforce investors just plan to trust Benioff without no backup plan.
