Salesforce – Stability of Management Teams

Salesforce is known to start this entire concept of software-as-a-service. In short, SaaS. Its founder is Marc Benioff, a charismatic and influential leader. But what’s his track record of retaining talents in his company?

• Keith Block, a former co-CEO of Salesforce, left after 18 months.
• In November 2022, Salesforce’s chief strategy officer, Gavin Patterson announced his departure.
• Now, Bret Taylor has announced his departure. This came after being elevated to Salesforce’s Co-Ceo for around 1 year.
• Also, Steven Tamm who is Salesforce’s chief technology is leaving.

Separately, there are other people from Salesforce’s subsidiaries who are leaving:

• Slack’s Steward (CEO), Tamar (chief product) and Jonathan (SVP of marketing) from Slack decided to leave together.
• Tableau’s Mark Nelson (CEO)

As an investor, I like to see stability and continuity in the management teams. Adyen has one of the best I’ve seen ever, most executives have more than 6 years of working on the management team. A company is never an empty shell, it is made up of people and people drive results. So if people are leaving, it could signify unhappiness, lack of common strategy, or some cultural issues. All these will impact the business performance of the company.

Around June 2020, we saw the news of Sheryl Sandberg leaving Facebook after 14 years. She’s known to be the stabiliser in the company. Since then, the company reported poor Q2 and Q3 results. Sheryl Sandberg might be just lucky to leave at the right time or she left the company strategically.

Similarly, in June, DocuSign’s CEO Dan Springer announced his stepping down and board chairman Maggie Wilderotter taking over his position. Then, in Nov 2022, he’s suing DocuSign and Maggie for fabricating his resignation and forcing him to step down.

All these changes in people will definitely distract the company from performing for shareholders.

For Fastly, the previous CEO Joshua decided to leave. The new CEO, Todd Nightingale, shared that Joshua went out of his way multiple times to ensure Todd will have a smooth runway and a good understanding of the business. I think that’s how the transition of leadership should be. It should be orderly, and not chaotic.

Any departure does not mean the company is bad, but when viewed with context, it gives us some clues whether it is a big issue or a small issue.