Salesforce's Marc Benioff and Bret Taylor the latest co-CEO trial
Some software companies rule their worlds with co-CEOs for years. Other co-CEO arrangements don't last long. We consider the future of Salesforce's current chief executive duo.
SAN FRANCISCO -- At Dreamforce, Salesforce co-CEOs Marc Benioff and Bret Taylor were best buds, putting on a show of solidarity that employees, customers and a horde of press and analysts hadn't yet seen in-person.
If past co-CEO arrangements are any indicator, though, it will take a lot more than appearances to make it work in the long term.
The Salesforce CEOs ebulliently introduced Salesforce Genie to customers and the loyal Trailblazers -- admins, consultants and developers. Later, Benioff and Taylor updated reporters on how they work together.
Any CEO will tell you it's lonely at the top of a company, Taylor said, and it's a privilege to run Salesforce with Benioff, a mentor he consulted when launching Quip -- his first foray into enterprise software -- in 2012. Salesforce acquired Quip four years later, which was Taylor's first step toward his eventual elevation to co-CEO late last year.
"The way it works is, I think, a partnership in the truest form," Taylor said. "We don't have swim lanes. We don't have guardrails. We talk a lot about trust being our No. 1 value, and I think that's the basis for our partnership."
For his part, Benioff described the Salesforce CEO job as "very big and very hard and very complex." He said he sees two Salesforce CEOs as better than one.
"I have found that having a co-CEO relationship is extremely important, because it allows more balance in the operation of the company," Benioff said. "If it is the right relationship, then it can have tremendous power and capability inside of the company but also give more coverage to the customers and to investors and to the stakeholders."
Co-CEOs a trend
A man with a watch knows what time it is, but a man with two watches is never sure, says the old American aphorism.
Co-CEOs can sometimes work well together. Broadly speaking, the typical arrangement puts one in charge of product or content and the other in charge of operations. When these duos work out, there is some evidence that two CEOs can yield better returns for stockholders than sole-CEO companies despite the two large salaries on the books.
Marc BenioffCo-CEO, Salesforce
Outside of tech, successful co-CEOs run Gensler, the largest U.S. architecture firm in terms of revenue. Prior to its acquisition by Amazon, grocer Whole Foods enjoyed a six-year run with co-CEOs. Sometimes, co-CEOs work well until a crisis disrupts their flow. Restaurateur Chipotle's stock -- and sales revenue -- took a dive in 2015 after multiple food-poisoning outbreaks. The company went back to a sole CEO in 2016 after seven years of having two.
In the tech world, HR software giant Workday has had co-CEOs since 2020, and DevOps stalwart Atlassian's co-founders have been co-CEOs for 20 years. Streaming giant Netflix has co-CEOs, too. Oracle's two CEOs worked for five years until co-CEO Mark Hurd passed away in 2018.
But tech co-CEOs don't always get along, and a committee of two can slow decision-making. SAP infamously tried it twice and failed. In 2018, Salesforce paired Benioff with co-CEO Keith Block, a former Oracle executive. It lasted 18 months, and Block left at the beginning of the pandemic. Taylor was elevated to co-CEO in November 2021.
Salesforce has a lot of things working in its favor this time, said Rebecca Wettemann, principal at Valoir, an independent research firm. One, Taylor's been a tech CEO before. Two, Benioff -- the senior CEO -- has other interests, such as his social and environmental causes and owning Time magazine. He's willing to let Taylor take the reins of running Salesforce day to day.
"One of the reasons why [the co-CEO arrangement] fails is ego -- the CEO brings on the co-CEO but can't let go and still has to be the No. 1," Wettemann said. "I think what we've seen with Marc is being able to say, 'I'm going to put Bret front and center and let him actually lead.'"
Predicting the future
For two decades, Benioff has perfectly navigated the "founder's dilemma" as set forth by author Noam Wasserman that has tripped up many other tech CEOs: They can stay in their roles and amass power or maximize wealth and eventually get pushed out by outside investors as they gain seats on board. Benioff has gained both wealth and power after two-plus decades at the Salesforce helm.
But it has taken two CEOs to run -- and grow -- Salesforce for a majority of the last four years, through the pandemic. How much longer this Benioff-Taylor marriage will last is anyone's guess. Companies like Atlassian prove that co-CEOs can lead tech companies. With the Block experiment, Salesforce itself proved that these arrangements sometimes are temporary.
Taylor's tech bona fides are strong, as he is also Twitter's board chair. His social network FriendFeed, acquired by Facebook, gave us the Like" button. Before that, he co-created Google Maps. If Benioff and Taylor were to call it quits down the road -- for something other than a health situation, a scandal or Taylor taking a CEO job at a company even bigger than Salesforce -- one would think it'd reflect much worse on Salesforce than it would Taylor. An in-demand Taylor could write his ticket to his next stop, and Salesforce stockholders would likely shudder at the discontinuity in senior leadership.
Considering such Damoclean circumstances this time around, Benioff has incentive to make this co-CEO arrangement work for longer than it did with Block. It's in Salesforce's best interests for its co-founder and longtime CEO to either get along with his new co-CEO or finally step aside. (That's been long rumored, despite Benioff's claim that he'll never leave Salesforce).
Like it or not, Benioff has cast his lot with Taylor. It had better work out this time.
Don Fluckinger covers enterprise content management, CRM, marketing automation, e-commerce, customer service and enabling technologies for TechTarget Editorial.