Last night was set up as an occasion for celebration.
Salesforce announced that it had surpassed analyst expectations in its Q3 earnings results, achieving a 14 percent YoY rise in revenue.
Moreover, it recorded a 22.7 percent non-GAAP operating margin – an all-time record.
Nevertheless, the announcement came with a curveball: Bret Taylor, co-CEO at Salesforce, is stepping down at the end of the fiscal year.
Taylor joined Salesforce after it acquired Quip for $750M in August 2016 – the company he founded after leaving his role as CTO of Facebook.
From there, he spearheaded the $27.7BN Slack acquisition and took on the challenge of becoming co-CEO.
Yet, his departure seems amicable, with Marc Benioff, Founder at fellow co-CEO at Salesforce, serving up a stirring send-off during the earnings call. He said:
Bret, you know that you’re always going to be our brother. You know that we love you very deeply and that you have a home here. We’re going to try to get you back somehow.
As for Taylor, he has his sights set on re-exploring his “entrepreneurial roots”.
Indeed, he seemed eager to explore more of the current technology landscape and an economy undergoing “tectonic shifts”.
However, he was quick to heap praise on Benioff, stating: “Marc, you’ve been my mentor long before I joined this company. And in the past six years, your relationship has definitely become the most significant in my professional career.”
Even after this transition, I will always, always be a part of this company and always be a part of this community.
Indeed, there seems to be no bad blood at Salesforce, which is refreshing considering Taylor’s exit from his secondary role as Chairman of the Board at Twitter in October.
In the lead-up, many will remember how he got caught up in the middle of a very public falling out between incoming Elon Musk and outgoing CEO Parag Agrawal.
As Liz Miller, VP and Principal Analyst at Constellation Research, said:
The man HAS to be EXHAUSTED. Guiding the Slack acquisition through would have been enough to exhaust mere mortals, but then deal with Twitter… I hope his next “project” is a year-long vacation.
Yet, now Taylor has announced his departure, eyes will turn to the vacant position of Salesforce co-CEO.
Keith Block first occupied the role for 18 months, from August 2018 to Feb 2020. Taylor then took it on in November 2021, staying for little more than a year.
Considering these short tenures, a potentially significant question arises: is the co-CEO strategy working?
Is the Co-CEO Strategy Working?
While the idea of a co-CEO is unusual, there are many possible benefits for a complex, multifaceted business like Salesforce.
For instance, installing different backgrounds at the top of the table brings in new perspectives.
Also, one could take care of internal functions and the other external.
As a former Salesforce employee wrote on LinkedIn: “Think of it as two halves of a brain!”
Indeed, from an earnings perspective, the approach seems to be working, given how the vendor is navigating the economic uncertainty.
Moreover, the IDC recently revealed that Salesforce still leads the CRM market – and by some distance.
Yet, the trouble is that anyone Benioff eyes as his co-CEO is likely to receive much interest from elsewhere. After all, they’ll likely offer an excellent track record in innovative thinking.
As a result, it seems the position provides a tantalizing career catapult for those Benioff picks out as his co-captains.
Therefore, the issue is perhaps not that the position of co-CEO is failing. Instead, it is more likely that the Salesforce Chairman may struggle to find his successor.
