Continuing with heartwarming inspirations from the world of business, Marc Benioff, the iconoclastic founder and co-CEO of Salesforce has to be right up there. Ahead of the release of his latest book Trailblazer: The Power of Business as the Greatest Platform for Change, Marc’s interview with the Fortune magazine gives a peek into the mind of someone who walks the talk when it comes to building a business with purpose and using business as a platform for change. For example, whilst most people talk about gender based pay discrimination, Salesforce actually undertook three successive pay adjustments to eliminate any gap costing the company millions of dollars. Similarly, when it comes to ensuring ethical use of its product, Salesforce is happy to walk away from deals where it believes the use of its technology is unethical even if the customer is the state (Salesforce backed off when it learnt that its software was being used in the government’s border operations, which had resulted in the separation of migrant children from their families). Such acts of standing up for your beliefs even when it costs you is what inspires us at Marcellus (read here about why the name Marcellus). Not just us, more than 9000 companies have been inspired and have implemented Marc’s famous 1-1-1 model (giving 1% of a company’s product, 1% of equity, and 1% of employee time to philanthropic causes). Salesforce has shown that all this doesn’t have to come at the cost of shareholder value creation either. Since IPO in 2004, Salesforce shares are up a staggering 5300%, a compounding of 30% annually and now a $131bn market cap company.
“The new capitalism is one where we value all of our stakeholders: our customers and our employees, our public schools, our planet, as well as our shareholders. And going forward, this stakeholder return is as important as the shareholder return. That’s why we’ve given $300 million in grants towards worthy causes, our employees have volunteered 4 million hours to the community, and 40,000 nonprofits and NGOs use a billion dollars of our software for free each year.
(About equality in pay)…Because this is a subconscious bias, you have to monitor and measure it on a regular basis. So this is just happening automatically when people are getting hired. But number two is, we didn’t realize that when we acquired companies, we weren’t just buying their innovation, we were also buying their pay scales. And that can really, really impact you as a CEO—if you buy a company and you’ve done all this good work, and now you discover that they had the wrong pay scale.
…What business books talk about that? Even go back and look at every article ever written in Fortune magazine. You’re not going to find an article that says, “When you acquire a company, make sure you not only look at technology, but that you also look at the culture, and the ethics, and the leadership—Oh, and look at the pay scales as well.” That’s not part of how [most companies] do things.
But now, we have to look at it constantly and transactionally. So when my head of corporate development comes in and says, “Hey, we’re going to buy this company,” I will say, “Okay, how much are the workers paid? Show me the pay scales. Are men and women paid differently?”
….When I went to business school, which was from 1982 to 1986 at USC, I didn’t take any classes on equality. Or on sustainability. Or on stakeholderism. I took none of those classes. The classes I took were on accounting, marketing, organizational behavior, leadership. That’s what business was. Well, that’s not what leadership and business is today.
…a year ago my company put in place an Office of Ethical and Humane Use, led by a team of people who do nothing but ask what you just asked—which is look at how our products are being used. Because that has to be the cornerstone of how we operate. That’s also why we recently banned assault weapons (and products like bump stocks) being sold on our commerce cloud—because they determined that it was not ethical. That’s our new world.”
If you want to read our other published material, please visit https://marcellus.in/blog/
Note: the above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India as a provider of Portfolio Management Services. Marcellus Investment Managers is also regulated in the United States as an Investment Advisor.
Copyright © 2022 Marcellus Investment Managers Pvt Ltd, All rights reserved.
