Speaker 1:
From the library of the New York Stock Exchange, at the corner of Wall and Broad Streets in New York City, you're Inside the ICE House. Our podcast from Intercontinental Exchange on markets, leadership and vision and global business. The dream drivers that have made the NYSE an indispensable institution of global growth for over 225 years. Each week, we feature stories of those who hatch plans, create jobs and harness the engine of capitalism. Right here, right now, at the NYSE and at ICE's Exchanges and clearing houses around the world. And now, welcome, Inside the ICE House. Here's your host, Josh King of Intercontinental Exchange.
Josh King:
Somewhat overshadowed by the pandemic a year ago, 2020 was the 50th anniversary of the inaugural Earth Day, back in 1970, and organized by Senator Gaylord Nelson of Wisconsin. It's hard to argue that any Earth Day since the first has had such a profound impact. That day led to the creation of the Environmental Protection Agency here in the US, and passage of the National Environmental Education Act, the Occupational Safety and Health Act, and the Clean Air Act. Now, fast forward 50 years, and if governments and corporations continue to focus on the issues, Earth Day, this year, could go down as a similar watershed moment for protecting the planet, by expanding into a year round global observance. The temporary reduction in emissions and pollution as a result of the lockdowns combined with the need to respond to accelerating global warming, has created the momentum to change business and society behaviors really forever.
Josh King:
Investors, both the retail ones and institutional, are moving in that direction with one in every three invested dollars put to work by an ESG strategy. Oh, and those dollars saw a five percent better return in 2020 than traditional investments. The issue that stakeholders are facing now is the lack of transparency in the ESG space. To quote one of our recent guests on this show who, in turn, was quoting Peter Drucker, "What you measure gets managed." But despite strong financial reporting standards, there are still few standards for ESG activities.
Josh King:
Picking up on this moment, the Biden administration has introduced a broad set of executive and legislative approaches to transform how the country handles and regulates climate issues. One action that Wall Street took note of, and our own Hope Jarkowski spoke about on this show just a few weeks ago, is the SEC's creation of a Climate and ESG Task Force in its division of enforcement. The SEC itself said it would use sophisticated data analysis to mine and assess information across registrants, to identify potential violations. And woe be to the violators.
Josh King:
Our guest today, Mark Hawkins, knows a thing or two about reporting the real hard numbers of ESG. As Salesforce's Chief Financial Officer, he's also served as the head of its appropriately named Earth Force, overseeing the company's year round service to the planet. During six years as CFO, Mark also happened to steward the company's market cap, increasing six fold to reach a 2020 high of 248 billion. During his tenure, he showed that the modern CFO must meet the needs of all stakeholders. Our conversation with Mark Hawkins, on making business a platform for change. The multifaceted responsibilities of the modern CFO, and what's next for this renowned tech executive. That's all coming up right after this.
Speaker 3:
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Josh King:
Our guest today, Mark Hawkins, is Salesforce's President and CFO Emeritus, that's NYSE ticker symbol CRM for Salesforce. Salesforce announced on its third quarter 2020 earnings call in December, that Mark was retiring in January and would serve out the rest of this year in an advisory role. He previously served as the CFO of Autodesk and Logitech, began his career with Hewlett-Packard, that's NYSE ticker symbol HPQ. And Dell, ticker symbol DELL. In addition, Mark has served on the New York Stock Exchange's listed company advisory board, where he helped guide our exchanges ESG efforts. Mark, welcome Inside the ICE House.
Mark Hawkins:
It's such a pleasure to be with you and I really appreciate the opportunity, Josh, to be here. We have had a great relationship with the NYSE for more than 20 years and I just can't thank you enough for the partnership. It's really a pleasure to be here.
Josh King:
We've loved having you at the big board, Mark. Salesforce has released an annual ESG governance stakeholder report that contains all of the company's ESG efforts and the metrics going over several years. What are your thoughts on the more active role that the SEC is taking in investigating how companies report that information that I just talked about?
Mark Hawkins:
I really appreciate you calling out our stakeholder impact report. We've been doing that, Josh, for eight years. And for eight years, we've thought that the ESG topic was important and that topic would rise and continue to rise in importance and it certainly has and certainly is. I think the one thing that we look at there, is we not only put out and try to be very comprehensive in our disclosures on ESG, but we actually go as far as to have engaged Ernst & Young to actually audit that, because we think it's very important to make sure that those facts stand in the same way. Any other facts we put out stand. And that just shows our commitment to really being serious about ESG. And it has been for eight years.
Mark Hawkins:
We believe that business is the greatest platform for change. When business mobilizes, it can move faster than just about any organization and it can have a quicker positive impact in so many different dimensions. And certainly, this critical dimension at ESG that's rising in expectation. Our shareholders have been clear. Our employees have been clear. Our customers have been clear. Our partners have been clear that this is a topic of rising importance. So, when we come back to talking about how we should address this and how now regulatory bodies are addressing this, I think business has the opportunity to lead from the front and really rally, move fast, and really contribute. And of course, there could be other organizations that are involved, but I think if business leads strongly from the front, we can make more progress, we can deliver more benefit, even sooner.
Josh King:
As ESG reporting for public companies becomes more systematic and regulated, do you think the responsibility for meeting those standards should actually fall under the CFO's quarterly reporting duties?
Mark Hawkins:
I think there's a lot of sensibility to do that. I think it could make a lot of sense. I find it to be very synergistic when we get together and try to understand all the different needs of our stakeholders. In a modern CFO, one that needs to not only report and deal with the classic financial reports that need to be put out and the interactions with the very important shareholder, which is one of the critical constituencies, but there are other constituencies that the modern CFO needs to address as well. And to be well versed in ESG, I think is a really key part. So, yeah, I think it would make a ton of sense in that respect.
Josh King:
So, whether you're tracking ESG metrics or your growth projections, the technology available to CFO's has evolved so greatly over time. You've spent your career with companies developing the tools needed for business, beginning with Hewlett-Packard. I wonder, Mark, coming out of Michigan State, did you disappoint your long rooted Michigan family by passing up an opportunity to work at GM?
Mark Hawkins:
I did, in fact, you are well informed. And what was interesting, is GM was my highest dollar offer. And for a person that worked nights for four years to get to school, even on a scholarship, dollars were important. But I decided instead, where my family hailed from Michigan for generations, to go with a company called Hewlett-Packard, that had just finished a 3.1 billion dollar revenue year. That was the beginning of an amazing journey. But I worked with them for a little over 18, almost 19 years. We encrusted around 50 billion dollars and I was involved as one of Southern business unit CFO's as we spun out Agilent Technologies. I'm actually proud to say that Agilent Technologies, today, their CEO I mentored for years and his name is Mike McMullen and he's just a wonderful leader.
Josh King:
When you think of Hewlett-Packard, you think of Hewlett and Packard in the garage, starting that business in Silicon Valley and really defining Silicon Valley. But you're in Colorado Springs. What did you learn over those first years at HP and the University of Colorado that prepared you, ultimately, to head across the pond in search of a more experience and a green Jaguar?
Mark Hawkins:
What I learned, most importantly, is I learned how critical it is to really be aligned to the values of the company. To have a sense of both the short term plan and the long term plan. I learned the power of really digging in and really focusing on excellence and continuous improvement, which really got me to really internalize that. And there's a phrase I use in every audience, and that is, "Better better, never done." No matter how much you've accomplished. No matter how much you've achieved as a business or as an individual or as an organization. We need to be forward leaning and we need to go to the future. And that was incredibly valuable as I began to go, actually, Josh, to take my overseas assignment. I was in my early 30s. I thought that would be important.
Mark Hawkins:
And the story behind the green Jaguar was actually quite fun. My boss said to me, that, "Hey, if you can get this company division up to about 250 million," and it was pretty close to a start up mode, that particular division of HP, that, "We'll get you a green Jaguar," which was quite popular in the UK. And when I left, it was well, well above that. And when I got home and I was back in the Bay Area, I opened up a little box, Josh, on my desk, and I opened it up and there was one of those model of green Jaguar's, and a beautiful brass plaque on it that talked about the achievements, where the business well crested a billion dollars not long after that. And the good news was, whereby it was a real green jaguar that I had envisioned, there were stock options in there that worked out really well.
Josh King:
Talking about, "Better better, never done," Mark. I saw you retweet your old boss, Michael Dell, a few weeks ago, saying that he started his firm 37 years ago with a thousand bucks, revenues in 1994 of six million, compared to, oh, 94 billion last year. Was it a no-brainer to make the move to Dell after 18 years at HP?
Mark Hawkins:
Well, you know, it really was a no-brainer. I had admired Dell immensely from afar, and we had been through a period where we... Keep in mind, we just split HP for the first time ever with the spin of Agilent Technologies. Ned Barnholt, the CEO, and Bob Walker, the CFO, led that charge and I was one of the Southern business unit CFO's in the company trying to support that. So there was a lot of change happening.
Mark Hawkins:
And there was another little twist, Josh, that my wife's parents lived in Austin, Texas. And we had lived overseas, we had lived in Colorado, we had been everywhere except for within any proximity of our family and so that was a wonderful extra chapter. But I learned so much at Dell, in terms of just the excellence and execution. Yet another entrepreneurial set of success patterns, if you will, to be able to learn from and to study and to try to observe, and to try to continually take my own skillset to a higher and higher level. But it was a wonderful, wonderful chapter, and I have the great pleasure, today, to still work with the Dell team, including Michael, where I'm on the board of secure works, and he's the chairman.
Josh King:
I'm staring at you right now, Mark, through a Logitech external PC camera. Logitech became your next stop, your first, I think, top CFO gig. You also oversaw IT when you were there, an area that you continued to oversee when you got to Autodesk. I was surprised to find out, Mark, that nearly 40% of CFO's wear the IT hat as well. You worked for tech companies for your career, but how'd you gain the knowledge that you needed to oversee IT operations in addition to the balance sheet?
Mark Hawkins:
For any executive in a modern corporation, and certainly in today's competitive environment, if one's not learning, they're getting behind. If one's not improving, they're getting behind. And that was my appetite. We had situations where there would be a tough challenge and some of my mentors taught me early, "Don't be afraid to run in to the fire." A lot of people run away from the fire. I'm happy to run into the fire and try to help and serve the company in any way I think about, that I can. And I heard an old Navy saying that really stuck with me, which is, "Ship, shipmate, self." And when the ship needs something, you go in there and help them in whatever way you can. And if you do a good job, more opportunity comes. And so, that happened. I thoroughly enjoyed learning IT and how to really have a positive impact there.
Mark Hawkins:
The Logitech team was awesome. Yet another founder with Daniel Borel on the board. And I just... Yet another iconic company and just they had Swiss engineering and they had global manufacturing.
Josh King:
You're talking about running into fires, Mark, but there's this reputation that CFO's stand for the chief no officer of a company, but I think for many of our shared acquaintances, this clearly is not your style. Did you have mentors that really drilled in this commercial mindset that you have?
Mark Hawkins:
I think one of the opportunities that I got early on was the criticality of the customer and how to get deeply involved in the customer. When you do that, you really can't abstract yourself away from the way the business really runs and what needs to be improved to better satisfy the customer. I'll just pick Dell as an example. Where we went from number six to number one in the US consumer PC business, and we were making so much progress that we asked our finance team after the normal team to get on the call centers to take orders for Dell computers, when we were configuring for those that didn't go all the way through dell.com. And every one of my team needed to learn about the financing program. They needed to understand the nature of the configuration. They needed to understand what the customer needed. They needed to understand what was on their mind and that changed our team. Our team could walk into any room and truly understand the business.
Mark Hawkins:
That was then. And today, on of the things that's interesting in my job, and has been for the nearly past seven years, is to meet with customers at least every single day. And at Salesforce, there's nobody in the executive committee that's not deeply constantly engaged with the customer. And it's my commentary to the entire Salesforce organization is, "Let's make the customer successful first and our success will come. Take care of the customer first." It's one of our values. It brings me to the point that I always like to say that values drive value. And certainly, customer success is one of our top values, in addition to trust, innovation and equality.
Josh King:
How does that actually work? I mean, you're the company's CFO. Are there certain things that you bring to a customer meting that helps that customer out? Where does that chemistry start?
Mark Hawkins:
Well first, it starts where I was, as a member of the executive committee, I'm one of those that actually, as a customer prior to joining Salesforce, actually from the beginning, implemented Salesforce because IT worked for me. And we went from an idea to a full successful implementation. So, I understood what it's like to be on the other side of the equation. Number two, having a global network of business leaders that I'd been engaged with for 40 years, there's a lot of relationships. Whether it's at the World Economic Forum, whether it's in New York, whether it's in San Francisco, London, Tokyo, wherever the case might be, there's a lot of long standing relationships. And I would be naturally pulled into that. I'm also executive sponsor for a number of accounts as every single member of the executive committee would be.
Mark Hawkins:
At Salesforce, what's cool, and I've always been inspired by, is that everybody gets how critical customer success is. I mean, just to give you an example, Josh, there is nobody... This is what it's like to be with a [inaudible 00:18:42] company. There's nobody, not a single employee at Salesforce, that doesn't annually get certified to tell the company message. I mean, certified in front of people that they have to present to. And when I say that, they need to understand our values. They need to understand our products. They need to understand our focus on the customer success and our road map, and all the things that we do and offer. And when I say everybody, Josh, I want to be clear. Our payroll clerks, our receptionist, our accounts payable. Anybody in the company needs to do that and that's the beginning of having a culture of focus on customer success.
Mark Hawkins:
It's more about telling somebody that this isn't about the transaction of today, this is about a relationship over the long period of time. I give customers my cell number. "You ever have a problem, you call me." I just had a major customer three work days ago, set up a 30 minute meeting just to thank me because I honored that when they asked for some help. That's what we do. That's where our passion comes from. That is our North Star, one of our values of customer success. So, I think a CFO who thinks in a more narrow view is missing the opportunity.
Mark Hawkins:
And Josh, I'll tell you something interesting. I've had the great pleasure, there's been five CFO forums at the World Economic Forum, and I've had the great honor and privilege to host all five. But one time, actually, Tom Farley was there.
Josh King:
I remember, a couple of years ago.
Mark Hawkins:
Yeah. And he was there with a fireside chat with me. And I am obsessed about learning and actually he and Larry Fink were there. And they were my two great guests and I asked Tom, I said, "I want to learn from you. You've seen so many CFO's, so many CEO's, what is the pattern of success?" I'm obsessed by patterns, Josh. And Tom was very clear. He said, "I can see it. The ones that are successful take a wide view of their job. And the ones that are less impact are very, very narrow." In today's environment, and it's leads to my view of the evolving role of the CFO, Josh, is the... Today's modern CFO needs to serve their company by taking great care of the shareholder, for sure. But also, great care of the customer. Great care of the employees. Great care of the partner relationships. Great care of being engaged in the community, because to me, that's how you're going to create generational companies. That's how you're going to create generational wealth. Creation, not wealth administration. You're going to really build something.
Josh King:
There's been recent news this week, Prince Harry got his appointment as BetterUp's Chief Impact Officer. Elon Musk, in one of their SEC filings, Tesla named him the Technoking of the company. The entire C-suite seems to be getting more specialized. You're talking to me, Mark, about the evolution of the CFO with increased responsibilities. I'm curious, going back to Michigan, was there something about the way you were brought up by your parents and the environment in which you grew up, that probably seeded your abilities to be the kind of executive you became?
Mark Hawkins:
Some of the best advice I ever received was from my mother. "It's all about the people you hang around with and you surround yourself around with. And be around people that are productive and that have aspirations and understand that great leaders lift people up when they rise." So, there were some tremendous lessons and not being afraid of hard work and challenging yourself. I remember getting up at... when I was 11, getting in the back of a pickup truck at 4:30 in the morning and go driving a tractor for about five hours when I was 11 years old. Hard work was what was expected.
Mark Hawkins:
One of the people on our board, Sandy Robertson, who's a legend for sure, in so many ways. Basically, I asked him, "Sandy, is there a lesson I can learn from you?" And he said, "Absolutely, Mark. The harder you work, the luckier you get." I think there was a lot of that. I think growing up and appreciating values and respecting people, to me, is so important because I think, at the end of the day, you're making things happen with people. You're building relationships with people. And trust is my number one value, and I think when you live in a small community, you know how important it is to always keep your word. And your say-do ratio needs to be super high. Education is the ultimate transformation for every one of us. I went to school in the day and worked at night, while at Michigan state, and my next four years I was working at HP and then going to school at night at University of Colorado. To me, that just seemed like a natural thing from where I grew up. If you have an opportunity, you run through that door.
Josh King:
What other strategies do you bring to bear every day to learn and to balance the competing needs of stakeholders? You talk about meeting with customers every day, but you have so many other stakeholders. Whether it's regulators, employees, your fellow members of the management committee. You've got to have a certain strategy that you take when you walk in the door of Salesforce building.
Mark Hawkins:
Well, at Dell, one of the things that I learned that was incredibly helpful, was this notion that, "Hey, the business is growing north of 20%, are you? Are you? And what are you doing?" And so, one of the things that I've always done, Josh, is I've always tried to step back and every year, between Christmas and New Years, I put down a set of goals for myself. But one thing I've really tried to do, is always recalibrate. This year is different. The fact and circumstances are different. The business is different. My team is different. How am I scaling up? How am I adjusting? What were things that I did last year that I could have my team do? And then I go do things that only I can do to help the company. And keep recalibrating, refactoring what is my job in a rapidly growing company.
Mark Hawkins:
Today, we're a DOW 30 company. When I started, we had just finished being a four billion dollar annual sales company, and we were going to change it rapidly. And I think one has to constantly raise their own expectations, refactor, adjust and be very intentional about that and be very strategic about that. And so, I think that that is super critical. I look at my calendar like a portfolio allocation of financial dollars, and I actually have my assistant run some things for me and I measure that and see how I'm reshaping that. Am I in a place where I can help the company the most?
Mark Hawkins:
I like to talk about... I've said this to a lot of people when I do career mentoring. I say, "Think about yourself like a small company. Let's just called it Josh Incorporated." And for Josh, for any small company or big company, you know you need to ship a lot. If you're not shipping goods and services, your company has a problem right away. If you've ever had to stop shipment in a company, that's a [inaudible 00:26:08]. And you have to ship really good services and quality, and it has to be modern services and quality. It has to be services and quality that meet the need in our competitive in the world. You then need to do research and development. If you're not doing research and development, I would not invest in any company that doesn't do research and development, so why would you not invest in your research and development? If you follow my metaphor.
Mark Hawkins:
You have to do a little marketing. You can't do too much because you've got a lot of things you have to invest in, but you have to do some to get your value proposition out. And then you have to trade off short term income and long term market cap, and enterprise value. What are you really trying to do? And some of the most important decisions I've ever made were to have delayed gratification on the long term market cap that would be good for the company. Have a board of advisors. Keep you credit good. There's a lot of parallels in your brand and your values because if you don't decide them, somebody else will. And so, I think that conceptual idea directs us to be entrepreneurs. And each of us should be entrepreneurs and lean into it and keep chasing the future, as opposed to over enjoying the past. I mean, we can enjoy the work and the accomplishments that we've all achieved together, and I am so proud of, for example, right now, at Salesforce what we've achieved together. And yet, it's all about the future. It's better better, never done. That's the tension that I'm trying to always push on.
Josh King:
You're also a life long teacher, and you're talking about your work with the World Economic Forum. I think you wrote an article in 2018 for WEF, Why CFO's Need to Rethink What it Means to Create Value. Why did you begin to look at stakeholders and how did the numbers back up what I think Mark Benioff and others have termed this idea of stakeholder capitalism?
Mark Hawkins:
For sure. I think that we've had discussions in a lot of different forums, but there's shareholder focus and stakeholder focus. And I actually see those coming together. I think the difference is the timing. And for me, if you break it down, in classic economics, whether it's Milton Friedman or whoever you want to look at, you stand back and say, "Okay, let's just think about customer. Let's take them one at a time." Give me an example in your mind, just rhetorically, of somebody that's treated customers really, really well, and what the outcome looks like, and somebody that has not treated the customer really, really well and is very short term and rough in the sense of being very transactional. And I would say to build a generation of companies, no question, treat them well.
Mark Hawkins:
Okay, employees. How many examples can you think of over the lifetime of your business career where employees were treated badly and [inaudible 00:28:55] employees were treated like a destination employer? Where they are the center of your innovation. They're the engine behind the great things that happen in your company. I could tell you how that [inaudible 00:29:05]... my experience of how that ends up. You take a look at your partners and again, how many people will... I remember a great saying by Dave Packard, where somebody had got a deal and a partner made an error. And we were going to profit off it. And David tore up the [PL 00:29:21] and said, "Go back and strike a fair and tough deal." It was like, wow. Treat your partners right. They will be there when you need them.
Mark Hawkins:
And then, of course you come down to your community and look at people who have zero interest in the community, and those that have actually leaned into the community and the community leans into them when they need it. And then I come down to the environment. Think of the companies that absolutely wreak havoc on the environment and how that ended, versus ones that didn't. To me, this is actually not only the right thing to do, but it actually promotes your success in the long term. And I think there's lots of math that supports that. But my view is that that resonates deeply with the employee population today, deeply with the customers. You call out the investors and the partners... but I also think you got to another point, is the timing. If you want to create wealth creation and not do wealth administration, you have to have a view of what you're really trying to achieve over a longer period of time.
Mark Hawkins:
And my view is, I don't want to be known for maniacal execution to a 90 day plan. I want to be known for maniacal short term execution to a 90 day plan... to a 90 day execution to a long term plan. So, it's short term execution to a long term plan, not short term execution to a short term plan. If you take a longer view, as somebody that's championed the long term plan for the company for the last nearly seven years, that has been deeply on my mind. While at the same time, happy to execute each and every day, each and every quarter, each and every year. That is the expectation and we love to execute, but we want to execute to a more thoughtful plan. And that, I think, that plus thinking about the broader set of constituencies, I believe lands you to a much better place over the long term.
Mark Hawkins:
We did the 1-1-1 model for giving back to society from the very first day we started the company and that, giving one percent of our market capital away originally to philanthropy, one percent of nearly 60,000 employees get seven paid days to give back to society, and one percent of our product to over 60,000 NGO's. And now, over 9,000 companies have adopted the one percent pledge. Business is the greatest platform for change and that certainly makes us compatico with industry and community. And I think it's so interesting when you see now, 22 years later, the Business Roundtable is signing up for the same thing. We didn't start this last year. This is at the beginning in the inception of the company.
Josh King:
And yeah, this 90 day period is so ingrained to those of us who work in publicly traded companies, who watch CNBC for much of the day. The debate around quarterly reporting and its influence on the ability to plan long term and navigate through rough waters. You can now speak freely as a former CFO. Does quarterly reporting have any impact on stakeholder capitalism?
Mark Hawkins:
I actually have a view that might be different than you expect. My view is not so much the quarterly reporting. I think that's fine because I think that keeps a focus on execution. I think the bigger issue is have companies taken a longer view, a longer term plan of what they're trying to achieve, and have they aligned their constituencies? Including their board of directors and their shareholders to their longer term plan. Because if you have done that, the fact that you're doing quarterly reporting, people are not getting confused about what you are trying to achieve over a longer period of time and you can of course show the progress along the way. But I think the bigger point, to me, is have you really convinced people about your long term plan? And if you have, I think the quarterly reporting is really a secondary issue, in my opinion. Because by the way, here's the honest truth. There's going to be a consensus whether somebody guides or not. You can have surprises in semi-annual reporting, you could have surprises over an annual reporting. I think the bigger issue is alignment on what is trying to be achieved to set expectations properly. And then quarterly reporting, I think, is a secondary issue, in my opinion.
Josh King:
After the break, Mark Hawkins, Salesforce's President and CFO Emeritus, and I, are going to discuss his tenure at Salesforce and his leadership principles. That's all right after this.
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Josh King:
Welcome back. Before the break, Mark Hawkins, Salesforce's President and CFO Emeritus, and I, were discussing his career and really how the CFO role has changed over time. Mark, when you were thinking about that move from Autodesk to Salesforce, I understand that you weighed the opportunity with your wife and children. I have two kids, one of whom is now away at school, and while I've become closer to this year of remote learning while she's been in the house, I miss these long terms hikes with my son, which I know is one of your treasured rituals. Do you see the career trajectory as a family endeavor? And how have they been supportive of you as you've made all these moves that we've been talking about? To Colorado, to the UK, to Texas and California.
Mark Hawkins:
It's definitely a family endeavor. I met my wife, Laura, when we were 20 years old. We got married at 22 and please don't ask me what I was thinking at that time, Josh, but it's been wonderful. I have two sons and I always have felt that, as a family unit, that this our journey together as a team. And we literally... I remember the opportunity when Salesforce had reached out, and Autodesk was an incredible experience, which we can get into around how to deal with a turnaround, how to deal with the fears and the error around the great financial crisis and all that. It turned out, we repositioned the company. We got it to grow again. We got it to be profitable again. We repositioned it, strategically, for the cloud. And so, there was a lot of hard work done. The share price went from, I don't know, mid teens to, I guess today, north of 250 depending on any given day. I really greatly deeply enjoyed the Autodesk team and the experience after we got through the harrowing part of it.
Mark Hawkins:
When Salesforce reached out, we all talked and then I said, "Hey, look. Here are the pros, here are the cons. You guys are the stakeholders in this. What do you think?" And my sons both weighed in. My wife both weighed in and said, "We're in. Let's do it." And so, I called my brother and I said... I'm one of five boys and I called one of my brothers and just said I wanted to talk to him and [inaudible 00:37:39] and didn't tell him the company, just said, "I'm thinking about something and might be a change." And he asked me a great question, Josh. He said, "Hey, Mark, do you have another hill to climb?" And I thought, you know what? I do. And I do because I want to learn. I want to grow. I want to continue to scale and take it to another level.
Mark Hawkins:
And I always remember something, Josh, that really impacted me. I was talking to somebody I had great respect for and we were reviewing a hire of somebody and they had 20 years of experience. And I said, "Look, this person has 20 years of experience." And the person came back to me and they said, "Do they have 20 years of experience or do they have one year 20 times?" And I was like, "Whoa, now that's a thought." And so, I've always been mindful in my learning and my growing. Can I bring more to the table? Can I run into the fire? I would be very comfortable in one situation. In a situation where we have a turnaround, where the outcome is really good, you can imagine the relationships with the board and everybody. Things are good. And yet, you can put yourself right in the mix of being brand new and having to re-prove yourself each and every day. I never want to rest on my laurels. I always want to be forward leaning and learn from people and be around great people, be around the best people so I can learn and contribute. And so, that was part of that dialogue.
Mark Hawkins:
Yeah, I mean, and by the way, when I decided after 40 years in technology, in 15 years as a public CFO, and having the opportunity to work with such iconic companies and iconic leaders, to go into chapter two, extensive discussion with my family. Not about any... I have to always be very careful. I'm super confidential about not talking about work. But I just talked about there'll be a day when I'll do something different and then you would conceptually talk about it without giving any kind of specifics about anything. And my family is like, "Hey, you've done everything that we could ever imagine to help our family. Go enjoy chapter two, where you're going to learn even more." And so, chapter two is going to be super fun and we'll talk about that at some point.
Josh King:
We'll end up our discussion on chapter two, I'm sure, Mark. But sticking on the last sub-chapter of chapter one, I think Salesforce has this well earned reputation for being a value driven company. We talked about that a little bit earlier. And it's focus on what you call Ohana. You retweeted Mark Benioff's photo of the Salesforce Management Team doing that outdoor earnings call. As you look back at the past year, which has to be one of the weirdest in that 40 year career that you've been talking about, what stands out about the company's COVID-19 response and its ongoing efforts?
Mark Hawkins:
Well, it was a year like no other year. And I would say that having been a Section 16 Officer, navigating through the great financial recession, that was a warm up to what we were dealing with here. I'll share with you, Josh, both some of the experiences of it, but also the learnings to take forward because it is about the future. So, it's like, what actually happened and then the future. As a company, my experience both in the great financial recession, but certainly in the middle of this historic situation is when you're making a thousand decisions a minute, not literally, but it felt like it more from a feeling's standpoint. One of the best things you can be guided by is having a clear vision and clear values. And so, when things hit, we knew what we needed to do.
Mark Hawkins:
The first thing we needed to do was take care of our employees, our Ohana. And with Mark's great leadership, Mark Benioff, we made a call that was a bit unprecedented even on the west coast of the United States, and we pulled people in very early to say, "You work from home." All of our employees, I'm saying all... virtually, like 99% of our employees worked from home almost immediately. And we didn't know how long this would be, and so we immediately spun that up and said, "Employees, take care of them." We started having mental health specialists come on and we had all hands calls for 55 to 60,000 employees every single week. We answered every question people could have. We had epidemiologists on. We had Buddhist monks to teach meditation.
Mark Hawkins:
I remember one person sent me a picture, their desk was an ironing board. And they put their Mac on top of that and they were going and it was quite a moment. So, taking care of the employees and spending even when we didn't have that in the budget. Then we turned and said, "How are we taking care of our customers?" And we were doing all kinds of things to literally pivot so quickly that we canceled... We have these things called World Tours, where like the Sydney World Tour I presented, there was probably 15,000 people live. I mean, this is a big event and we do them all over the world. Within roughly seven days, we went from a live session planned, canceled that, completely reprogrammed the whole thing and did it all on virtual. Within about seven days and had even more attendance and were able to pivot.
Mark Hawkins:
So, we were trying to take care of the customer. We were trying to take care of how to serve them, how to support them. And then of course, to be true to our values, we had to figure out how to help the community. And we had to take care of our sales team, where all the plans were adjusted. We had to take care of our community and honestly, Josh, this is one of the most stressful times during the entire pandemic, where I remember being at home. We were working 14 hours a day on the weekend, dealing with all of the other stuff, but then Mark said, "We've got to get protective equipment. People are not moving fast enough." And so, with the help of some really awesome executives, Ryan Aytay, a member of our team, our chief procurement officer, a number of different people. Amy Weaver and I were on the line and we literally were working through all the logistics to find 60 million pieces of protective equipment that we paid for, we had air shipped to over 300 hospitals when we had doctors that just didn't have protective equipment.
Mark Hawkins:
We did a lot of things and in our Q1, when we went to talk to the investor, this is about taking a longer term view of what's happening, we basically said, "We've made these investments at a time that was so critical to our employees, to our customers, to our community. These are investments." And I truly believe they were investments. We worked with customers in other ways to try to help them survive during this period of time. And I think someday, that goodness will come forward.
Mark Hawkins:
Our approach is, how do we, together, rally with our values and actually go get something done and achieve our... including our financial goals and things of that nature. And we ended up learning things about when is travel necessary, that we'll take forward. What is the optimal real estate requirement? We'll take that forward. What do our employees want in the future? How can we better support our customer? How can we do demand generation in new and different ways? And we've talked about all this publicly, but the lessons learned had been so powerful. Even having more investor conferences, video. And I remember being conflicted just before everything really hit. Should I go down to a particularly popular investor session down in Florida? And I talked to my audit chair and talked to Mark, and we said, "Probably doesn't make sense. They want me to meet all these people." And so I called in, talked to every single one of them. And they were thinking that was smart.
Mark Hawkins:
And so, I think if you're willing with beginner eyes to keep taking the facts and circumstances and then trying to ring out some learnings, we're going to benefit over the long term and we're going to try to pass that on to our customers in every way.
Josh King:
You've got the iconic Salesforce Tower that occupies so much of the San Francisco sky line, and I'm sure that's a lot of commercial real estate that has been idle over the past year. You're talking about your colleagues who are making desks out of ironing boards. How do you think remote work that is either a temporary response over the last 12 months or a permanent evolution of work, is going to impact this relationship between businesses, employees, those investors in Florida and communities like San Francisco?
Mark Hawkins:
Yeah, here's my thing that I learned when this new all digital work from anywhere environment, the world has changed. And it's not to say that we won't have people want to work in buildings when it's all safe to do, for sure. I just think, and I've talked to a lot of people in my chair from a lot of really well known companies. I would say the center of gravity is what I would call a hybrid model, where people will work from the office but I think people will also want some degree of flexibility, where maybe they don't do that five days a week. Maybe they do that in a fractional time. Maybe there is... it's different, instead of assigned seats, there's ways to better utilize the office space and yet keep a huge focus on the customer because it's one of our core values. Customer. Focus on collaboration. Focus on the ability to support a changing model and maybe even changing expectations in the world.
Mark Hawkins:
But we also learn from employees that where you work, when you ask a person, Josh, where they work, what people used to say, is, "I work at 415 Mission Street, Salesforce Tower." You know what people say now? A lot of our customers, other people. They say, "I work in Slack." Where do you work? The all digital work from anywhere environment is changing for sure, the world, and I think that that is a precursor of what's to come in the world. And I think there'll be a hybrid model, is my anticipation, but it certainly... One thing we saw is those companies that were digitally prepared did a whole lot better than those that didn't.
Josh King:
You mentioned Slack. It was one of our favorite events on the floor of the New York Stock Exchange 2019, one of our second direct listing after Spotify. You have overseen the acquisitions among so many others, Mark, of Tableau, MuleSoft, Slack, increasing Salesforce's market cap by 50 billion, pushing the company into the largest 50 public companies in the world. Came across several headlines as we were doing the research for the show connecting your departure maybe with the Slack acquisition. Was the deal a good bookend to your tenure or just coincidental timing?
Mark Hawkins:
Definitely coincidental timing and I'm so proud of what we've done with Slack. I've always take the view it's all about the future. We know where we all work in the future, is digitally. Not exclusively. Again, just to be clear. I think Slack is... When we think about what Slack can do for our customers, which is why we bought it. When we buy M&A, Josh, it's always so interesting. People say, "Did you get the idea from investment banker? Did you get it here? Did you get it there?" We get it from a customer. When we bought Demandware, when we bought ExactTarget, when we bought MuleSoft. MuleSoft is a great story, where Bret Taylor went around the world on a customer tour, we quantify what they needed. The number one ask was data integration. We went out a bought MuleSoft right away. And Slack is just the latest version of that.
Mark Hawkins:
But for me, again, 40 years in technology is hard to find [inaudible 00:50:01], and to have the tenure of a CFO to be 15 years in the public markets. I guess the Wall Street Journal has some stats that say it's four a half, five years, something like that. It's been... I'm a marathon runner, by the way. I love to do that as a personal thing, and this has been a marathon. It's just more... The time was something that was right for me and I was so honored to carry on in the Emeritus status and I'm working with Mark and the board on all kinds of stuff and I also am really honored to support Amy Weaver, who's an amazing executive. Super proud that she's taken the baton. She's going to carry on with the stakeholder approach. She's extremely accomplished in the company and I just think she's a terrific person, not only a terrific executive, so I feel really good about that as well.
Josh King:
Benioff described you as the foundation that Salesforce needed to scale. The foundation you're leaving is about six times larger than when you arrived. Talk a little bit about working with the company's chief legal counsel, Amy, and managing that transition.
Mark Hawkins:
When I look at any accomplishment, it's a team sport. And we've accomplished so much together as a leadership team, the ELT under Mark Benioff's great leadership. We've accomplished so much as a nearly 60,000 employees. We have an outstanding finance team that gets lots of accolades, externally, let alone internally. And Amy is a really accomplished executive. And so, the way I think about the baton pass is back to sharing everything that I can share, answer all the questions that I can answer, be a song board in that way and really... it come back to, Josh, "Ship, shipmate, self." And the ship is Salesforce and the shipmate is Amy, and my view is how do I help her and how do I help all the executive team, the board, in that journey? And I'm just so honored to do it.
Josh King:
You serve on a few companies board of directors, we've mentioned the role of the director a couple times in our conversation. What do you look for before you decide to accept a board position? And will that become more of your focus in chapter two?
Mark Hawkins:
Definitely. What I look for is back to one of the questions you asked me earlier. It's around what's really important to you. Values are important to me. The people I surround myself are very important to me. I want to be with the best. I want to learn from the best. That has been my motto that's guided my career always, is be with the best, learn from the best, serve with the best possible capability. And so, that's, to me, is important. I look at, obviously, the business opportunity, the companies, but certainly the people around that table are very, very important to me. I just would say that. But I also pick areas where I want to learn something and where I can add value.
Mark Hawkins:
The other thing that I will certainly, Josh, focus on, is being a strategic advisor in very select situations, again, where I think I could add value. And I like to share, I like to serve, I like to learn and after 40 years, you pick up having worked with some really iconic companies and people. I'm looking forward to sharing that. And then I'm going to do something... I'll do some investing and I'll do, certainly with ESG, I will be helping... I'm a global ambassador for Accounting for Sustainability, which is Prince Charles's initiative. And I really want to help on that topic to continue to elevate what I think is an important topic for all modern companies to consider. And by the way, every industry is different. Every fact and circumstance is different. We don't all have to do the same thing, but we all need to do something to try to help here, and I just want to, in a very pragmatic way, be of assistance in that way.
Mark Hawkins:
And then lastly, it'll surprise you, but I'm writing a book with my two sons. It's not about business. It's something I, and they, have wanted to do and were embarking on that. We've made some progress. And the title is Walk With My Sons. It's a three-way, three author dialogue about what we've learned from each other. And the punchline is that... I credit Laura for this, my wife, is that ever since the beginning when we had children, it was like, "You can work as late as you need to, but please have dinner with us and then please take the kids for a walk." And if you can imagine from when I had to hold them up when they were barely walking, to now one is 32 and one is 35, the first thing they want to do is go for a walk. And so, learn from each other and so, my chapter is going to be the biggest, the learning from them, but hopefully they have a few things to say, too. We may not sell more than five or six copies, but it's not what it's about. It's about spending time with my sons. That'll be a little different aspect of chapter two.
Josh King:
I'm sure set for publication Father's Day 2022, Mark. I'm curious, beyond the writing work with your boys, have you begun to noodle any ideas for what's going to be on that list for 2022 that you're going to put into ink between Christmas and New Year?
Mark Hawkins:
That's a really thoughtful question. I tell you what I'm doing right now, is I'm doing a V2MOM. And a V2MOM is a method of setting goals at Salesforce. And the V2 means there's two V's. V for vision and V for values. And then you put down... [inaudible 00:56:13], the vision for chapter two, which I have, and then the values has to be prioritized at Salesforce. You never present without it having to be prioritized, or Mark will help you... Mark Benioff will help you prioritize. And then the methods are the key things that will get you to the vision. And then the O is for obstacles. Be realistic of what's in your way. And then the metrics are how will you measure the success? So, I have it on one piece of paper. I'm actually running it by Mark and a couple other mentors and I'm fine tuning it. And the biggest reason I'm fine tuning it, and Josh, this has been an eye-opener for me, is I always knew there was going to be opportunity in chapter two, but there's even more opportunity than I thought, because I wasn't thinking about it quite like that. You're in a learning mode. And so, now I'm trying to prioritize what is going to help me the most serve and achieve that for the good of my family and the good of the people that I serve.
Mark Hawkins:
It's going to be fun. So, I'm half way through that. I'm not quite ready to tell you on the penciled notes, but you should expect that I'll be very present in the business community and some people love to golf. I always joke around and say, "If you and I were to go golfing, Josh, I'd make you sign a non-disclosure agreement." But I love business. I love what I do. I love to learn and participate. That's what I'm fine tuning right now. Give me another month or so and I'll have it fine tuned, but I've got a pretty good sketch of it right now.
Josh King:
Well, Mark, I hope when the book is ready, you and the boys will come back on the show and we'll do a three-way with them and have a good conversation about what you guys all learned from each other on those many walks. Thanks so much for joining us Inside the ICE House.
Mark Hawkins:
Josh, it's been a total pleasure. And thank you again for the great partnership from the New York Stock Exchange.
Josh King:
Thanks, Mark. And that's our conversation for this week. Our guest was Mark Hawkins, Salesforce's President and CFO Emeritus, Salesforce. NYSE ticker symbol CRM. If you like what you heard, please rate us on iTunes so other folks know where to find us and if you've got a comment or a question you'd like one of our experts to tackle on a future show, email us at [email protected] or tweet at us @ICEHousePodcast. Our show is produced by Pete Asch, with production assistance from Ken [Abel 00:58:45] and Ian [Wolff 00:58:46]. I'm Josh King, your host, signing off from the library of the New York Stock Exchange. That's for listening, we'll take to you [crosstalk 00:58:53].
Speaker 1:
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