Episode 2

Transcript

Speaker1: Welcome to the Q Talks podcast from Loyola University's Quinlan School of Business. This season, we'll be exploring issues surrounding the impact of wealth inequality, its ramifications for business and any ethical arguments or other anomalies that are a result of the inequality that currently permeates American society. Join us as we unpack important issues present in our country and our world. 

Rick Sindt: Welcome to Q-Talks. I am Rick Sindt and our series on the impacts of wealth inequality continues today with guest Jason Wild to discuss what it would mean to transition from a shareholder model to a stakeholder model in our economy. Jason Wilde is a native Chicagoan and the senior vice president of Transformation and Innovation at Salesforce. He graduated from Loyola University, Chicago in 1996 and received his MBA from Emory University in 1999. In addition to his position at Salesforce, Jason is also working on a book with Dr. Linda Hill, chair of the Leadership Institute at Harvard School of Business, which is scheduled to be released in 2022. Jason, thank you for joining us today. 

Jason Wild: Thank you, Rick. It's a pleasure. 

Rick Sindt: So we're here talking about the impacts of income and wealth inequality in the United States and you have proposed this idea of moving from a shareholder model to a stakeholder model. I am hoping that we could start by defining those things for our audience so they understand how they operate and their structures and so forth. 

Jason Wild: Yeah, of course. And I think it's not my idea to move to a stakeholder model or also known as stakeholder capitalism, but I'm certainly a big believer in it. I think even before the events of the last year in my role, leadership role at Salesforce, I've had the privilege and opportunity of leading customer client projects, transformation, innovation, growth projects in 38 countries from Peru to India, Malaysia, as well as obviously places like Japan, Europe, and the United States. And was exposed in many ways to different models, economic models, and saw different levels of how society had created inequality. So this was something that was important to me and part of the reason why I joined Salesforce, which is a great company in terms of our software products, but I just was really allured by a leadership team, starting with Marc Benioff, our chairman and CEO, who felt that there was a responsibility for business to do more than just take great products to market and make a profit from that, but also improve the world and society. And Marc actually has a quote that, you know, business is the greatest platform for change. So now we're here in the middle of COVID. We're not sure at what point, but over the last 6 to 8 months, it's given rise to a health crisis, a social crisis and an economic crisis that's created a lot of uncertainty in our lives. And I think it's only accelerated the need for stakeholder capitalism. So now let me get to your question. Shareholder model, you could point to someone like Milton Friedman, who is a very well-known economist who's no longer with us, actually was a professor at the University of Chicago, known for the Friedman doctrine, and to the question that I think everyone should ask, which is what is the purpose of business? Milton Friedman's doctrine was very clear. That is, the purpose of business is to deliver a return to shareholders, and that is the only social responsibility of a business. For me, it was kind of ironic that he would use literally terms and he wrote a fairly famous New York New York Times article in 1970 that was titled Social Responsibility, that he would use the term social responsibility, but yet make an argument that the one and only purpose of business was to deliver a return to shareholder. I'm sure if Mr. Friedman was still around, I have no doubt that he would evolve his thinking. But the notion of stakeholder capitalism is this idea that companies must elevate the interests of workers, employees, the environment and local communities alongside shareholders, that it's not enough, that actually we will fail as leaders of industry and business if we only deliver on that promise of Milton Friedman and deliver a return to shareholders, that we have a responsibility to improve the state of multiple stakeholders, including the ones that I've mentioned. 

Rick Sindt: Off my conversations, you've often said that pre-COVID ethics were optional. Would you mind expanding on that a little more? Because I think it's a very compelling statement. 

Jason Wild: I think it's kind of an extension of what we were just talking about, which is if your stakeholders at least previously only cared about return on investment or growth in the stock price of a company, it meant that other things were not a priority. And I'm not saying that, you know, leaders were operating and making decisions without ethics, but basically the system and the model clearly prioritized and rewarded a certain outcome. You know, you look at what we're going through right now, we're in the midst of a health crisis, a social crisis, an economic crisis. And I think the past 6 months have just heightened the demand for a true corporate social responsibility. A recent Salesforce survey found that a majority of people feel that businesses should give back to the community and make addressing global inequalities a high priority. I think one way of looking at it, Rick, in the past, the public really didn't demand much more from companies than jobs and wealth creation. So now every business needs to play an active role in moving the needle on critical societal issues like diversity, equity, and sustainability. So making progress on these challenges isn't just the right thing to do. It's also a significant business opportunity. So, for example, research has shown that more diverse organizations are more innovative and perform better than more homogeneous ones. And leading the pack on sustainability can really create a lasting competitive advantage. So when I say ethics are no longer optional, it's a responsibility to the communities that we're a part of in the world that we all live in, but it's also good for business and the data is showing it. 

Rick Sindt: Yeah. At the beginning of our conversation, you talked about how these values were part of why you found Salesforce compelling. Can you tell us a bit about how Salesforce has integrated models of stakeholder capitalism into their mission and purpose? 

Jason Wild: Yeah, absolutely. At Salesforce, meeting the responsibilities to all of our stakeholders has really been an important part of our culture since we were founded 21 years ago. I've only been with Salesforce for almost eight years, but I've worked very closely with the co-founders and there are many organizations that I think talk about values, but I think that unfortunately there are very few that actually live those values and live them consistently. There's mission statements, there's plaques on walls. So how does Salesforce actually do that? I think that there are a few things in our founding year of 1999, when we started in a very small apartment in San Francisco, our co-founders decided to donate 1% of equity, 1% of product, and 1% of employee time to volunteer non-for-profit social endeavors and kind of a little bit of the joke at the time was when we were a startup and we just had a dozen employees, that really was not much. But now we're going to finish our fiscal year, Rick, with 60,000 employees and we have annual revenue of around $20 Billion. So this 111 model, as we call it, that started in our founding year now is delivering impact at levels that no one could have ever imagined. So to date, as a result of this 111 model, we've delivered more than $240 million in grants, 3.5 million hours of community service and product donations from more than 40,000 nonprofits and educational institutions. And I think what's great is there's even a non for profit organization that was started as a result of this called Pledge 1% that is trying to activate companies around the world to adopt the same pledge and the same model, and organizations like Dropbox and others have made the same pledge. We're hopeful that every organization, every Fortune 500 company adopts the 111 model. Other ways that we kind of practice this is we build we're a product company at our heart, a software company. I'm also part of the services organization. And we take great pride in our services and volunteer time. But as a product company, we built Sustainability Cloud to help our customers analyze their carbon data created form climate action programs. So when we go back to your first question, stakeholder capitalism, I think sometimes really smart people have an incomplete view of how we define stakeholders, and we're a big believer that our planet and ecology is one of the important stakeholders. So those are a few examples of the way that we practice stakeholder capitalism and live our values every day. 

Rick Sindt: You talked before about the value of diversity, and I'm wondering if you could elaborate on some of Salesforce's practices to maintain a diverse and dynamic workforce? 

Jason Wild: Yeah, I think it starts with our Salesforce corporate values. Our values have been consistent for the most part since the beginning of Salesforce in 1999. Our number one value is trust. Without trust, there's nothing else. Trust is something that needs to be built up, sometimes over weeks, months, years, but you can lose trust in an instant. Our second value is customer success is one of the pioneers in cloud computing. Our model is if we make our customers successful and our ecosystem successful, it should make Salesforce successful. Our third value is innovation. I'm a proud leader of global innovation team at Salesforce, and obviously for us to continue to bring products that our markets and our customers and education institutions need, we need to be at the forefront of innovation. And our fourth corporate value is equality, and it's a value that we added for several reasons about four years ago compared to some large companies who recently decided to prioritize this. Salesforce years ago from our founding it was very important, but we wanted to, quote-unquote, institutionalize it as a value and ensure that everyone around the world understood that equality is essential to our culture and who we are and we take that very, very seriously. We've taken a stance over the years when we felt that certain legislation, for example, in the state of Indiana and state of Georgia, we threatened to remove events and relocate employees when we felt that the legislation discriminated against that corporate value and basic human rights for all people, even if it meant losing revenue or creating potentially some damage and however that could happen in the public relations, frankly, the more important priority was that we felt we needed to take a stand and represent all stakeholders and all members of our community, especially when that type of legislation was being contemplated that we felt was discriminatory against people. One of the other things that we did several years ago that was a game-changer for a large company and a Fortune 500 company was we created a new role of a chief equality officer, and that's Tony Profits. And he created an Office of Equality that established reporting information and data that's shared internally and externally, including setting specific metrics around goals that we have in terms of diversity at multiple levels. I'm excited to let you know that fairly recently, Tony was promoted to expand in addition to his role of Chief Equality Officer. Tony is now also responsible for global recruiting as a part of our human resources organization, which at Salesforce we call employee success. But Tony is responsible, in addition to the Chief Equality Officer role, for all of our strategic and execution efforts around recruiting worldwide. So those are a few examples that we're proud of. We know that we have a lot of work to do. And just yesterday, I was a judge, honored to be a judge in a panel for the first business school case competition that was focused on racial injustice in business in corporate America and Salesforce was one of the corporate sponsors, along with Walmart, Johnson and Johnson and others that was in honor of John Robert Lewis. Lewis So the John R Lewis Racial Justice Case competition. And congratulations to the University of Southern California for winning. So those are a few examples of what we try to do to, again, be a platform for change and help make the world a better place. And diversity, obviously, is clearly a priority for us. 

Rick Sindt: So what are some of the obstacles facing stakeholder capitalism today? 

Jason Wild: Yes. Well, there are many. Obviously, when you have had decades, centuries of a primary economic model or system and it's changing, it's not going to happen overnight. It's not going to be easy. I think the good news is, is that you may know Larry Fink, who's the chairman of BlackRock, a very well-known investment banking firm, sends out a notorious letter to the CEOs of all of the portfolio companies that they invest in. And in his last letter, he underlined and reinforced the importance of every organization going forward that they want to be a part of, has to have a clear purpose, has to have diversity on its board. And it wasn't soft. It was very clear that this is binary, this is not negotiable. So when you look at Wall Street getting on board and mandating a change, clearly there's momentum, let alone there's a need. But there are still headwinds. There was a New York Times article last year that did an analysis and called it kind of a report card and said it's mixed, that the pandemic and the movement for racial justice generally had kind of tested corporate pledges to elevate social concerns in addition to shareholder interests, but that many of these companies were struggling to really follow through the risk of the kind of flaring up, but then flaring out and going away. I think for many of us, I'm sure you would agree, Rick, this time feels different. I think with Salesforce, it hasn't been easy. We're clearly committed to it I think, as you've heard with the different examples of concrete initiatives and actions that we're taking. But I think a challenge of little things like business cases and how do you measure, quote-unquote, success. And we all learned in business school the concept of hard benefits and soft benefits and and hard benefits tend to get prioritized when you look at funding a project cost recovery, cost takeout revenue growth, acquiring new customers and quote unquote, soft benefits tend to be things that are not operational benefits to society, maybe benefits to employees and benefits to these stakeholders. So there's deep, deep kind of systemic--and that's just one exampl--kind of institutionalized things that need to change. And so I think you're seeing it in the headwinds in multiple levels. And it's just easier when you look at kind of the stock market being the traditional indicator of success or maybe failure or not so much success of a public enterprise. When companies are able to trigger immediate gains in their stock prices by cutting costs and restructuring or addressing or maybe slashing benefits, the system is not set up to reward the sort of outcomes that stakeholder capitalism in concept is focused on. So I'm optimistic because I think the other side of this is that as we're going through COVID 19, the social crisis, this economic crisis, the exposure and the light that's been shined on income and job inequality, I think a lot of leaders and organizations are being tested. And one of the ways is what did you do during this war? And if you look back in history and you kind of look at this as a bit of a war that we're going through right now in terms of a war on a virus and a public health epidemic. You know, years from now, I would challenge people listening to this, especially the leaders, and say, what will be your answer when you're asked, what did you do to make a difference in the middle of this war? 

Rick Sindt: As we talk about transitioning from stakeholder capitalism to shareholder capitalism, essentially the ultimate argument is to create some kind of new social contract, right? And so you talked about getting on the other side of this, and I'm wondering if you could share with us what you think being on the other side is going to look like, what kinds of practices will be in place? What kinds of behaviors do you think we should expect from companies, etc.? 

Jason Wild: Sure. So when I talk about a new social contract, it's an expansion in scope. But start with your traditional definition of a strategic plan. A strategic plan that maybe existed before COVID could have worked out for, depending on your organization and the level of competitiveness, a year, maybe two or three years. Many, many organizations. And the leaders that I've talked to and work with, in the first few months of COVID, they burned through figuratively their strategic plan. What they were planning to do and fund was either irrelevant or they had to accelerate it, including digital transformation initiatives. So many of these leaders have been kind of trying to make decisions and lead and operate their business shrouded by fog. So first and foremost, you need a more nimble, updated, modernized, strategic plan. But then when I say a new social contract, it can't be defined by those traditional stakeholders, right? Shareholders, finance and kind of the only left brain side of ROI and revenue and cost impact. The social contract needs to also be expanded to take into consideration employees, partners, the communities that were a part of, ecology, nature, and the impact that we're having. We have a clean energy strategy at Salesforce, where our long-term target is 24 by seven, clean energy grids in the locations of communities where we operate. In 2017 we achieve the carbon-neutral cloud for all of our customers. So this new social contract is really a commitment and articulation of the promises that an organization needs to make and then to hold itself accountable and responsible for fulfilling that promise through its metrics and the way it goes about its everyday business. I think every organization should think deeply about what is their social contract, what are their set of stakeholders, and what are the gaps that they need to address in the short and long term? Because, again, not all of this is going to change overnight or in a week or in a month. You obviously have to deliver short-term impact, but clearly be on a journey for long-term change. And at Salesforce, some of the things that we challenged ourselves on were really ambitious, and sometimes people said crazy, goals that we had. But if you don't think big, then big things don't happen. And I think every organization smaller or large, public and private should think about what is their social contract. Instead of Salesforce, we use something that we call a V to mom. It's an acronym for Vision, Values, Methods, Obstacles and Metrics. You can look it up on your favorite search engine if you want to, Rick, and find it. Actually, Marc Benioff wrote a blog and it's our way of a very collaborative, inclusive, internal and external contract where every employee gets to participate in the process. And we're able to see the V2MOM of every person inside of our organization and hold each other accountable. And by doing it every year, it builds new muscles in our ability to be very focused on what matters and making tough decisions, because, as someone once said, leadership is a crisis of prioritization. So that's an example of the new social contract through a V2MOM of how Salesforce does it. 

Rick Sindt: If I'm a mid-level employee, let's say, at a larger corporation, and I want to get these conversations started in my team, in my division, in my department and hopefully percolate up. Do you have any advice for those listening who would want to start to undertake these processes at their current workplace? 

Jason Wild: Yes. I think first and foremost, if you believe strongly in something, don't let anyone get in your way. I think practically because obviously sometimes these depending on the organization, they're not all sales force where you have the top down support for psychological safety and the leadership creating the conditions where tough conversations, necessary conversations, can happen. So always use common sense, but find other like minded people, people who think and feel the same way that you do. It's a cliche, but there's a lot of truth to it. Their strength in numbers, I think number two is focus. Many organizations have philanthropic, voluntary endeavors and frankly, a lot of them are under leveraged. At Salesforce were given 56 hours of paid volunteer time per year. And I encourage my team as much as I can to take 100% of that. Many organizations have similar programs, use those volunteer endeavors to find a way to not only have impact, but also use it as a platform to maybe shine a light on whatever the product or service that your company offers, how it can make a difference, how it can maybe change things and do something that creates less harm, whatever, whatever that might be. So those are a few examples. I think generally I'm a big proponent, Rick, in design thinking, whether I talk to elementary schools where my kids go to or CEOs of large companies, design thinking sounds kind of like a buzz term, but what's timeless is creative problem solving. There will always be problems, and the problems will outlast jobs. So in your free time, there's an opportunity to learn, take a course, go online, watch a video, and immerse yourself in some skills of applying design thinking to your everyday job and things that you're passionate about. 

Rick Sindt: That's a very nice segue to my next question, which is about Sales Force's Trailhead program. I think it's a very interesting approach because it in some ways is leveling the educational playing field for people to get good jobs and I was hoping you could tell us a bit about that program, how it came about, and how people can take advantage of it. 

Jason Wild: Yeah, I'm so glad you asked. Trailhead has been a huge success for us. It's an online learning platform available to the public. There's lots of courses that you can take, all kinds of courses, many of them free, that allow you to take trails. That's why we call it Trailhead. Everything from innovation, digital transformation to learning about specific products and how to become, for example, a Salesforce developer or administrator. Right now on Trailhead, there are more than 1 million open jobs in the Salesforce ecosystem. You can get credentials and certificates that have real-world value on your CV or your résumé. And there's a story, maybe if I could share, that was really inspiring to me. I'm in a global job. I heard from our German team that a refugee from West Africa, a refugee, sadly, who lost his parents and became homeless and therefore a refugee due to war and violence and ended up in Germany seeking asylum because of what he had gone through. 20 years old, just a lot, obviously tragic to go through that at any age, but very young in his life, was passionate about technology, had applied for asylum with the German government was waiting that out in Munich and waiting at a bus stop. Saw an advertisement for Salesforce and started taking courses on Trailhead took a bunch of courses got to a pretty high level of certification ended up applying for an internship at the local Salesforce Munich office got the internship. The team heard his story, rallied around him, and helped him get a full work visa with the government of Germany. And now he's a full time of Salesforce. And that's just one story, you know, hopefully an extreme story and in his personal journey. But I think when you look at Salesforce, how did this happen? One, we've grown so fast that in many ways it forced us to have to expand beyond the traditional talent pools in technology and software because of our level of growth. We're the only US public company, I don't know if you knew this Rick, that has grown 20% year over year for more than 20 years consecutively. So to continue with that growth, we obviously had to expand and create new on-ramps to a new type of talent. But I think secondly and more importantly, was back to just our values in this responsibility that we feel deeply. That it's literally our role to help people connect into this world of technology and digital change. And it shouldn't just be people with a certain pedigree it should be inclusive and everyone should have that opportunity. So Trailhead is a public way for people to engage, and I highly encourage everyone to go and check it out. My kids have taken classes on it and I've heard that people are well into their nineties, so there's something for everyone and it's something that we're really, really proud of as a way to reinvent yourself and in this moment of, obviously a crisis and the world changing, its one path towards potentially a new career. 

Rick Sindt: Jason, thank you so much for talking to us today. It's been very nice to hear about Salesforce's strategies and values and how you all have remained in alignment to them from the very beginning. Before we go, I just wanted to give you a chance if there are any final thoughts you'd like to share with our audience. 

Jason Wild: Well, thank you, Rick, for inviting me to this podcast especially around a theme that I think is really, really important and necessary. I'm a proud alum of Loyola University, Chicago. The Jesuit education that I had in my undergraduate degree, no doubt is a big part of the success that I've had. I think developing deep empathy for the community that I'm a part of and also the level of rigor that I learned in my Rambler experience. So hopefully I can give back a little bit today on your podcast and Go Ramblers. 

Speaker1: This has been an episode of the Q Talks podcast where we seek to marry the wisdom of the Quinlan community with the issues of today. Special thanks to our guests as well as Dean Kevin Stevens for his generous support of this podcast. Matt Shelley, our student producer for editing this episode, as well as Loyola School of Communication and UW for their continued collaboration. Before you leave, take a minute to support us by sharing with friends or rating and reviewing our episodes to help expand our reach. Thanks for listening. I hope you join us next time.