When Salesforce acquired Quip in 2016 for $750 million, it gained CEO and co-founder Bret Taylor as part of the deal. Taylor has since risen quickly through the ranks of the software giant to become president and COO, second in command behind CEO Marc Benioff. Taylor’s experience shows that startup founders can sometimes play a key role in the companies that acquire them.
Benioff, 56, has been running Salesforce since its founding more than 20 years ago. While he hasn’t given any public hints that he intends to leave anytime soon, if he wanted to step back from the day-to-day running of the company or even job share the role, he has a deep bench of executive talent including many experienced CEOs, who like Taylor came to the company via acquisition.
One way to step back from the enormous responsibility of running Salesforce would be by sharing the role.
He and his wife Lynne have been active in charitable giving and in 2016 signed The Giving Pledge, an initiative from the The Bill and Melinda Gates Foundation, to give a majority of their wealth to philanthropy. One could see him wanting to put more time into pursuing these charitable endeavors just as Gates did 20 years ago. As a means of comparison, Gates founded Microsoft in 1975 and stayed for 25 years until he left in 2000 to run his charitable foundation full time.
Even if this remains purely speculative for the moment, there is a group of people behind him with deep industry experience, who could be well-suited to take over should the time ever come.
Resurrecting the co-CEO role
One way to step back from the enormous responsibility of running Salesforce would be by sharing the role. In fact, for more than a year starting in 2018, Benioff actually shared the top job with Keith Block until his departure last year. When they worked together, the arrangement seemed to work out just fine with Block dealing with many larger customers and helping the software giant reach its $20 billion revenue goal.
Before Block became co-CEO, he had a myriad other high-level titles including co-chairman, president and COO — two of which, by the way, Taylor has today. That was a lot of responsibility for one person inside a company the size of Salesforce, but promoting him to co-CEO from COO gave the company a way to reward his hard work and help keep him from jumping ship (he eventually did anyway).
As Holger Mueller, an analyst at Constellation Research points out, the co-CEO concept has worked out well at major enterprise companies that have tried it in the past, and it helped with continuity. “Salesforce, SAP and Oracle all didn’t miss a beat really with the co-CEO departures,” he said.
If Benioff wanted to go back to the shared responsibility model and take some work off his plate, making Taylor (or someone else) co-CEO would be one way to achieve that. Certainly, Brent Leary, lead analyst at CRM Essentials sees Taylor gaining increasing responsibility as time goes along, giving credence to the idea.
“Ever since Quip was acquired Taylor seemed to be on the fast track, becoming president and chief product officer less than a year-and-a-half after the acquisition, and then two years later being promoted to chief operating officer,” Leary said.
Who else could be in line?
While Taylor isn’t the only person who could step into Benioff’s shoes, he looks like he has the best shot at the moment, especially in light of the $27.7 billion Slack deal he helped deliver earlier this month.
“Taylor being publicly praised by Benioff for playing a significant role in the Slack acquisition, Salesforce’s largest acquisition to date, shows how much he has solidified his place at the highest levels of influence and decision-making in the organization,” Leary pointed out.
But Mueller posits that his rapid promotions could also show something might be lacking with internal options, especially around product. “Taylor is a great, smart guy, but his rise shows more the product organization bench depth challenges that Salesforce has,” he said.
That may be so, but consider that with Slack, Salesforce also brings in CEO Butterfield, who will continue to run Slack, just as Adam Selipsky, CEO at Tableau and Brent Hayward at Mulesoft continue to lead their organizations. These three men have both helped build their companies and sold them to Salesforce for enormous sums of money. Salesforce bought Tableau last year for $15.7 billion and Mulesoft in 2018 for $6.5 billion.
They are also savvy executives. Butterfield helped build Slack from nothing to a company with a $7 billion valuation before going public in 2019, and while his organization isn’t anywhere near the size of Salesforce, he has proven to be a successful executive.
Meanwhile Hayward has been with Tableau since 2013, and like Benioff is a former Oracle guy with a strong background in sales, much like Block was. Selipsky is an even more intriguing option having spent more than a decade as an executive at AWS including the COO role. That means he helped build the cloud division from its humble beginnings to the point where it really began to take off into a multibillion business.
But Mueller says there is always a chance that the founders move on when their contractual obligation to remain expires. “Acquisitions are often a chance to upgrade bench strength, but it usually evaporates into middle management and vanishes after the golden handcuffs have expired,” he said.
He’s also skeptical that these executives that come to the company via acquisition will buy into the culture enough to be able to take over running the company. “Usually culture and scale are tough for acquired company executives to adjust to. Even in the case of acqui-hire, we don’t see many executives succeeding. Not invented here is always a strong argument and ‘remember we bought you’ is also a strong argument,” Mueller said.
There are other options as well, like Alex Dayan, president and chief strategy officer, who has been with the company since 2008, and Gavin Patterson, president and chief revenue officer, who joined the company in May from British Telecom. He also has a deep sales background and strong executive experience.
There are a number of high-ranking women and people of color in the executive suite, including Amy Weaver, president and chief legal officer, Tony Prophet, who is chief equality officer and Ebony Beckwith, chief philanthropy officer and CEO of the Salesforce Foundation, but these folks don’t appear to be aiming for the CEO’s chair.
What will Benioff do?
If you want to look at what Benioff might do, it’s useful to look at his mentor, Oracle chairman and CTO Larry Ellison, who encouraged him to launch Salesforce over 20 years ago. At 76, 20 years older than Benioff, he is still working, effectively still running the company he started way back in 1977.
Ellison has taken on a number of roles over the years, but he stepped down as CEO in 2014, keeping the titles of executive chairman and chief technology officer. That’s when he split the CEO role between Mark Hurd and Safra Catz. When Hurd passed away last year, Catz took over the full role.
It’s unknown of course whether Benioff will follow in Ellison’s footsteps and stay with the company for another 20 years, but what is clear is there is an abundance of executive talent inside the company should he decide to ever step aside or even just slow down. The company would appear to be in good hands should that happen with plenty of good choices for filling his rather large shoes.