Davos 2019 - Digital Trust and Transformation A Conversation with Marc Benioff

Good afternoon, it's a great pleasure to have this dialogue with Mark Benioff, actually someone whom I consider to be one of the most successful entrepreneurs. He incorporates also very well the spirit of the forum with a commitment to improving the state of the world. And actually, Mark, I remember when we met first, I think you had 18 employees, you told me in 2002. And today, how many do you have now? We have almost 40,000. So just imagine, from 18, we made you at that time a young global leader because we knew you would succeed. I think it was... Well, thank you for all your support also. I mean, it's been a great relationship and I've learned so much here over two decades at the forum. Thank you. It was in 2002, I think. 2002. If you remember, it was the New York Davos because we moved Davos after 9-11 to New York for support of the United States, which was great. And that was my first experience. And I remember very clearly, I didn't really know much. I was a young executive in my 30s and I was sitting there in a hotel room and you walked in and everyone said, well, here comes Klaus Schwab, the founder of the World Economic Forum. You looked me in my eyes and you said, are you Mark Benioff? Yes, I am. Integration is the number one word you need to think about for your business. And then you walked out. And I said, wow, what does that mean? And I was like, what does that mean? And then I was like, yeah, you know, that business can't be separate from the world and from non-profits and from governments. And that's very much what Davos is. It's integration. We come together as one. Mark, you said, actually, when I see you and I observe you, you are nearly a missionary. You are on the mission to save technology from itself. What does it mean? Why are you so much with your heart and soul engaged saving technology? Well, Klaus, I think, you know, you've done such a brilliant job as the visionary of the Fourth Industrial Revolution and I've been honored to co-author some of the books with you and be the chair of the Fourth Industrial Revolution Center in San Francisco. And it's amazing what's happening in the Fourth Industrial Revolution with artificial intelligence and autonomous vehicles and CRISPR. But, you know, I have to tell you, what's happened to me here at this Davos has been quite profound because for me now I see that our community here and everyone in this room and everyone at the conference and all the people that we're connected to, you know, over the next decade is going to be the Fifth Industrial Revolution and that will be about saving the planet. That we have really a lot of work to do. And we can see the rising temperatures. We can see how that affects the oceans and creates acidification, changes our ecosystems. We can see how it's impacting our forests. We're still deforesting at one acre every second. And we have to ask ourselves, is this the world we're going to leave our children, you know, two decades from now? Especially when we can see the targets that have been set out in the Paris Accords by the leadership of Christiana Figueres. But with the Fourth Industrial Revolution, what we have are the technologies that have emerged to save the planet, which is kind of bringing us into that Fifth Industrial Revolution. And the people who are going to do it, and you said this to me first, is the youth. Not just the global shapers, not just the young global leaders, but really the generation still just coming in. You know, they're kind of just, they're coming out of school. They have these ideas of biodiversity and leadership. And it's very powerful. And I want to support them and help them. And I want to be the one who can, you know, help from my perspective those people. And that's why I've been so motivated here at this conference. I think you, to follow up, you prepare very well for the Fifth Industrial Revolution, not only in what you are doing, but you actually hired the first ever Chief Ethical and Human Use Officer. Yes, that's true. Can you tell me what her, it's a she, what her responsibility is? And would you recommend to everybody in the room to hire such a person? Well, absolutely, Klaus. And I'll tell you, of course, you know, when we were in business school, we learned we had to have a Chief Executive Officer and a Chief Financial Officer and a Chief Sales Officer and so forth. But, you know, in the Fourth Industrial Revolution, we had to add two additional officers. We had to add a Chief Trust Officer. Because we realized that if your highest value is not trust in your business, then what do you have? Because you can't do business in the Fourth Industrial Revolution without the trust of your employees and customers and partners. And I see that every day in my industry. I see a crisis of trust in technology. And then the second officer that we had to add in the Fourth Industrial Revolution was a Chief Equality Officer. Because the Fourth Industrial Revolution has created inequality. We can see that even in where I live in San Francisco, and you've spent so much time in San Francisco, and thank you for that, and UC Berkeley, that you've participated in. But, you know, we have a terrible homeless problem and the separation of rich and poor and housing prices that have gone up to a million and a half dollars. That's the Fourth Industrial Revolution, is creating inequality. And in the Fifth Revolution, we're going to have to have another officer, which is a Chief Ethical and Humane Use Officer. Are we using these technologies for the good of the world? Mark, you make my life difficult because of challenging. Just having published the Fourth Industrial Revolution book, and having, let's say, coined now this expression of globalization 4.0, now you challenge me. I have to write again about it. Yes, well, Klaus, you're inspiring this. I'll be very happy about it, because it takes quite some time. But let me come back to the trust issue. Yes. You, in essence, you are the CEO, or now the Chairman and Co-CEO, of one of the big platform companies. Yes. And you just said you succeeded very well to maintain the trust of your clients. Yes. But what would you suggest to, let's say, all those platform companies which have lost, actually, a large deal of trust? And it has to do particularly also with data protection. Yes. Can you explain to the audience what your stand is here? Well, you know, I think we just said in the Fourth Industrial Revolution, trust has to be your highest value. And we even have a Chief Trust Officer because of that, and we have had for several years. And I'll tell you that some companies, trust is not their highest value. And to me, that's sad. You know, I think for each one of us, each one of us in this room, everyone at this conference, we have to make a decision. What is our highest value? What do we really care about? What is the most important thing right now? Every person has that. And I know for you, and me, and for many people here, trust is our highest value. That we have the trust and faith and we listen and care about others. And for some people, they're maybe still stuck and their values may not be about trust. It may be about personal gain or it may be about making money. But you have to choose. What is your highest value? Are you about trust or are you about success? And I think sometimes people put success above trust. Now, I am all for success. I think it's great to have individual success and the success of the whole world. But we cannot put success above trust. Trust has to be our highest value. The trust and faith we have with each other and also our higher purpose and calling that is with us. And this to me is the most important thing. And everything then will flow from that. But when you put yourself above others, then you really, I think, are at odds with the future. But trust, Marc, is very much related to data ownership. And people lose trust because they feel they lose command about their own personal data. What would you recommend to some of your, how shall I say, cousin or sister platform companies to deal with this issue of data ownership? Is it the, let's say, the originator of the data? Is it the user of the data? Or is it the platform in between? Well, I think the first thing is you have to get clear what your values are and make clear that to yourself and to your employees, to your partners and others, that this is what is important to you. You've got to get clear about that, what your intention is. Then, after you're clear with that you say, wait, I do care about this and I'm going to hold this relationship we have with you, which includes your data, because they know everything about you now. What you like, what you don't like, who you know, where you're going. They know what's going to happen with you before you even know what happens. And they're monetizing that as part of their business model. For us at Salesforce, our customer's data is theirs. We don't own the data. We have a platform, we have artificial intelligence. We built our artificial intelligence in a unique way where we can't see the data that it remains with the customer. Those companies need to make a decision. Are they going to be in the trust revolution? Or are they going to be in a crisis of trust like they are now, being called in front of Congress? And you can see their executives are walking out. You can see their employees are walking out. You can see their customers are voting on this already. The thing that is most surprising to me, Klaus, is one thing, that they cannot get on a stage and say, trust is our highest value, we're sorry, we made a mistake, and we will go forward with trust. I just would like to make a test again. Who of you, it's interesting for you, who of you in the audience does not use Facebook anymore? Please. Oh, and who doesn't use Twitter anymore? That's quite significant. How do you interpret this reaction? I think that these companies have been too slow to change. The CEOs need to change. The leaders, the management team, the boards of directors need to change. Or they're going to lose their companies and look at how their brands have been impacted. If we were here at the World Economic Forum three or four years ago, we would be talking about those companies as if they just walked off of Mount Sinai. The reality is, now we're talking about, gee, where did they actually come from? And maybe it wasn't a high place. So that is a very powerful moment for us to really think about that. But you want to know what it really says to us? We have to check in with ourselves. The future is about each one of us taking personal actions to improve the state of the world. That's why I love coming here, because I always leave with an idea of something I can do. I'm so excited this time because our friends of Ocean Action and the work on the oceans has become so significant at the conference. We've had an entire ocean day today, and we saw the impact of the work with the oceans a year ago. The G7 prioritized the oceans, and now the G20 is saying that they're going to prioritize the oceans because of what they found out at the World Economic Forum. That is, I think, so exciting and really goes to show the power of this event. Now I will ask you a very, let's say, provocative question. Okay. There is a lot of resentment against the so-called elite and powerful elite. Now, you purchased with your together with your wife Lynn a Time magazine. And this exposes you to, let's say, the criticism. Yes, those people now say, even the media, you are not the first one. But what was really your intent? What is your intention behind it? Well, I'll tell you that I really think that today we need more ways to speak to everybody, all of humanity, in a trusted way. And when I looked at Time magazine, what I found was a brand that has always been about trust. It's a trusted guide for humanity. And it aligned so well with my values that I want to be able to impact the world in a positive way, to wake up CEOs, to wake up everyone to what's happening in the world. We have all this amazing technology and capability, but what are we going to use it for? You know, Klaus, is it good or bad? No, it's what we do with the technology that matters. So we have more technology than ever. But does that mean necessarily the world is going to improve? No, it will only improve if we can see where to go. And I hope that my vision and dream for Time magazine is that it will continue to be a trusted guide for humanity on how to take all these incredible gifts that we have been given, thank you, for your leadership of our Center for the Fourth Industrial Revolution, where we built now a whole network globally for what I would call global technology governance in order to make sure that we have a human-centered usage of those new technologies and do not become the slaves of those new technologies. Well, I think what you're saying is so important is that we have to look at the culture of our organizations. When we see all this technology coming in and when we see companies coming now to the Presidio in San Francisco, where we have this beautiful Fourth Industrial Revolution Center that you've built with now more than 70 experts from around the world doing governance and technology and also policy work and have impacted so many companies, those companies, their minds, they're leaving a little bit changed realizing, well, actually, remember Peter Drucker, I think he said, culture eats strategy for lunch. I think that today, maybe he's more right than ever. The technology is going to constantly extinguish itself. It's constantly going away and new technologies coming in. But the culture and the values, this is what's permanent. Mark, you were very courageous to take certain positions related to social issues, for example, DPG, the homeless and so on. And those issues are very controversial. There are different values accompanying those issues. Why should a business leader take a stand? It may cost him customers, it may cost him employees. What's your motivation? Well, my motivation is my customers and employees. It's them that are motivating me to act. In most cases, and I could give you each of those three things that you cited, it was employees and customers coming to me saying, Mark, you must act. And I think it's quite scary to act. I think that many times leaders maybe are informed but they're afraid to change. Because let me tell you, I got a call from my executive who runs Indiana, we're the largest tech employer in Indiana, and said, wow, they're passing a law against LGBTQ here. We're going to lose our employees, our customers aren't going to be able to come here. You have to act. And we did act, but what I didn't know the next day, hundreds of other CEOs all went with us through that door. In the same way, Mark, I didn't believe it, but we did a thorough audit and they were right. And we've now looked at that three times and made three changes to make sure men and women at Salesforce are paid the same, equal pay for equal work. But those are my female executives asking for that. And on the third piece, both my employees and my customers came to me and said, look at what has happened in San Francisco. It has become a train wreck of inequality. The homeless on the streets are not getting enough attention to our schools. We're not doing enough with our public health and education systems. We had to act on their behalf. So while it might appear sometimes that I'm so bold or I'm making these actions, actually I'm quite nervous and anxious, but I'm doing it on behalf of the employees and customers and partners and our communities who have asked me to do something on behalf of them. And so then I take that action and I kind of transcend my fear and I notice that they have my back. And that's what's worked out for me. And I recommend that for every leader to listen more deeply. Now I was meeting in the corridor one of our business leaders and he told me what stroke him during this meeting is he became aware how limited now politicians are in terms of their capability to act. And business has to step in. Which means business has to assume not only a social responsibility, but I would say even a political responsibility. Would you agree with this statement? Well, Klaus, I think you said it right 50 years ago when you wrote your paper on stakeholder theory that businesses have to manage for all their stakeholders and you dragged a bunch of executives here to this little town in Switzerland and said to them let's figure out how to build businesses that will be about stakeholders not just about making money. And now here we are 50 years later and this is more relevant than ever that indeed what you said is true. Business is the greatest platform for change. Because, well, look at Salesforce. 20 years ago when we started our company, Klaus, we put 1% of our equity, 1% of our profit and it was quite easy because we had no equity, we had no profit, we had no employees, we had nothing. But now we've given away a quarter billion dollars, we've done millions of hours of volunteerism and we run 40,000 non-profits and NGOs for free on our service. And, of course, we've been able to do other things including just passing, we helped get Proposition C passed in San Francisco which will help raise $300 million a year for the homeless in our city. And I have to look at Salesforce over 20 years and I agree with you. Business is the greatest platform for change. We must manage for our stakeholders. We must realize the power in our hands to create change is with these incredible gifts that we've been given which in many cases are our businesses themselves. How much should, when you give a donation, when you act for society, how much do you see just passive philanthropy on the one hand? If I'm not mistaken, $250 million with your wife for the California University Children's Hospital. Yes. How much does it need? You're owning, on the one hand you just give philanthropy, on the other hand you have to engage yourself. Yes. What would you recommend and what is your experience? Well, you're right, we've given about a third of a billion dollars to our local and non-profits and NGOs including our universities. That's separate from Salesforce and I hope that... That came out of your personal... That's my personal gifts and that's primarily, we've built two children's hospitals, one in San Francisco and one in Oakland. We built a global pre-term birth center. Now that was very interesting Klaus because that's really one of the only global pre-term birth centers in the world and that's a partnership between me and Bill Gates. We both put in $50 million for a conversation that happened here that I didn't realize that pre-term birth infected so many children under five years old that it has become one of the number one killers in the world and there was no concentrated focus of physicians and scientists focused on it and so I was thrilled to partner with Bill and Melinda Gates and we found incredible, incredible new discoveries including that there's a genetic predisposition, that there's social factors. If you were a pre-term birth yourself, that the mothers who were pre-term are more likely to give birth to pre-term children than mothers who are not. Well these kinds of insights are incredibly powerful and valuable for the world's health system and that's how it gets connected. Now I cannot manage a medical practice or run a prostate cancer research center or breast cancer research center or I can't run that, those things and if I have experts there for example at UC, which you were involved in, University of California, but we have a phenomenal university, University of California San Francisco where I live, I'm able to fund those post-docs and physicians and I give them maybe a little vision and walk away. I don't want to be involved operationally in my philanthropy. I was today in a meeting with ministers of finance and innovation and the opinion was raised that in order to take care of those people left behind, we probably have to have a switch in our taxation policy and to move again more to tax wealth, to tax high incomes and less to be dependent on consumer-oriented taxes which hit mainly those in the lower and middle classes. What is your opinion here? Well you can see the action I just took in San Francisco. With such a runaway homeless problem that we have in our city, 7,500 homeless individuals, 1,200 homeless families with an average of two children each with all kinds of assortment of problems but we don't have a shelter-in-place law like New York, that is there aren't shelters that they can all go to and say every company that's making more than $50 million in San Francisco is going to pay one half of 1% tax and we're going to build a fund and we'll pay our tax and everyone will pay a little bit and we'll get this fund and we're going to make sure these homeless people get the help they need because it turns out the medical professionals told us the key to helping the homeless is giving them a home and it reduces mental health issues, so the organization UCSF in their Center for Vulnerable Populations has published how to handle the homeless but we do not have enough money so we have to tax a little bit more, one half of 1% but do you want to know what happened Klaus? It was the parting of the Sea of Reeds, of the Red Sea, it split and there were two sets of CEOs. One said over here who are committed to improving the state of the world and paying the tax and helping the homeless and another said over here we're going to have to leave the city this will never work we can't afford one half of 1% and it was a war and then it was fueled and funded on both sides. Finally the population voted and 62% said yes this is the right thing and I think that that is very much we have to look at what is our taxation systems and I think proposition C in this fight that we just went through and it turned into actually it was so unusual but now we're going to be able to provide these services in a continual sustained way that's very powerful. Mark you're a role model for a business leader who has embraced the notion of stakeholder concept of social entrepreneurship but let me come back to your business role I mean to build in 16, 17 years a company from 18 people or 20 people to 40,000 people now what as a business leader you said how socially you created this profile but as a business leader why did you succeed? Well I think it is kind of amazing like you're saying it's 40,000 people there's 100 something billion dollar market capitalization our equity grew I think 34% last year in a down market we've had a 3400% growth since we went public in 2004 and when I look at what makes us successful in such a competitive market and in a market that has so many great companies and great products in it but yet we are clearly number one in our market I think it gets down to values I think our values differentiated us that our values created value at the end of the day and that we need to all look at how our values can create value for us it was a differentiation in our market our ability to attract high quality employees but also high quality customers too they were attracted to who we were as a company even our board members are some of the highest grade highest quality people you know I've ever met I've been so fortunate to have a tremendous board supporting us some of our board members are in the audience here today so I just feel at the end of the day Klaus if we all want to be trailblazers if we want to march ahead in the fourth industrial revolution and move to the fifth industrial revolution and save our planet and make the changes and do everything that we know that we need to make because everyone here is so well educated and knows what we need to do then we have to assess individually our values and for those who do not they'll be left behind in a crisis of trust they'll be left behind in a crisis of equality they'll be left behind in a crisis of humane use and their employees and customers and partners will not be attracted to them they'll leave they'll exit they'll walk out but you if you adjust your values you'll be like a magnet and you'll bring people to you and that's love that is how love works you know when you open your heart and you become a loving person you attract more love in your life and that is very much what we can do with our businesses as well it's a great metaphor values create value which means no values will never create value thank you very much Mark you are extraordinary business leader and we are very glad to have you in our board of trustees and I want to thank you for having shared with this audience some of the ingredients of your success thank you very much thank you