What a difference a few years can make. In the fast-moving tech sector, innovation drives change and change itself is constant. But what has happened over the past 18 months to social media platforms in terms of erosion of consumer trust has been startling, even if overdue.
As Salesforce founder and co-CEO Marc Benioff pointed out in a fireside chat with Klaus Schwab, Chairman of the World Economic Forum (WEF), there’s been a radical change of perception:
If we were here at the World Economic Forum three or four years ago, we would be talking about those companies as if they’d just walked off of Mount Sinai. The reality is that now we’re talking about where did they actually come from? Maybe it wasn’t a high place.
Trust has been high on the agenda at Davos this week and typically couched in negative terminology - trust deficit, trust crisis, trust headwind etc. It’s a theme that Benioff has spoken a lot about and certainly since before the recent Facebook/Cambridge Analytica scandals set the current agenda. I remember discussing the same kind of data privacy and trust issues with him back in 2014 when he told me:
I’m all in favor of consumers having more power and more control over their data. As a consumer, you should have all of the rights. It’s like a cloud Bill of Rights. As a consumer or as an enterprise, you should have the right to be forgotten or to add or take away you data…When we sign a contract with a customer, we are their servant. That’s not the case with consumer clouds where the masters are different.
Flash forward to 2019 and that’s a message being heard throughout the corridors and conference rooms at the WEF annual meeting. It’s also one that bears repetition from Benioff:
Those companies need to make a decision - are they going to be in the trust revolution or are they going to be in a crisis of trust like they are now? They’re being called in front of Congress. You can see their executives are walking out. You can see their employees are walking out. You can see their customers are voting on this already. The thing that is most surprising to me is that they cannot get on a stage and say, ‘Trust is our highest value, we’re sorry, we made a mistake and we will go forward with trust’.
As to what his solution would be, Benioff’s advice is stark:
These companies have been too slow to change. The CEOs need to change. The leaders, the management teams, the boards of directors need to change, or they’re going to lose their companies.
It all comes back to trust and alongside that to culture and to values, he argues:
We have to look at the culture of our organizations…[management guru] Peter Drucker said culture eats strategy for lunch. I think today he’s more right than ever. Technology is constantly going to extinguish itself. It’s constantly going away and there are new technologies coming in. But the culture and the values are what is permanent.
That said, there are questions that need to be asked by companies of themselves:
For each one of us, we have to make a decision - what is our highest value, what do we really care about, what is the most important thing right now? Every person has that. For many people, trust is the highest value…for some people, they may be stuck and their values may not be about trust. It may be about personal gain, it may be about making money.
But you have to choose - what is your highest value? Are you about trust or are you about success? Sometimes people put success above trust. I am all for success. I think it’s great to have individual success or the success of the whole world, but we cannot put success above trust. The trust and faith we have with each other and also our higher purpose and calling, this to me is the most important thing. Everything else will flow from that. If you put yourself above others, then you really are at odds with the future.
And the future is coming up fast. While this year’s Davos gathering was still hooked around the Fourth Industrial Revolution (4!R) thesis proposed by Schwab several years back, the reality is that the Fifth Industrial Revolution (5IR) is on its way. That’s going to have a lot more focus on values and ethics and basically saving the world, suggests Benioff:
It will be about saving the planet. We have a lot of work to do. We can see the rising temperatures. We can see how that affects the oceans, changes our ecosystems. We see how it impacts our forests. We’re still de-foresting at an acre every second. We have to ask ourselves - is this the world we’re going to leave our children?
From a corporate perspective, there will be a need to rethink roles to meet new needs, just as there has been during the 4IR. Benioff cites Salesforce’s own innovation over the years to make his point:
When we were in business school, we learned that we had to have a Chief Executive Officer and a Chief Financial Officer and a Chief Sales Officer. In the Fourth Industrial Revolution we had to add two additional officers. We had to add a Chief Trust Officer, because we realized that if your highest value isn’t trust in your business, then what do you have? You can’t do business in the Fourth Industrial Revolution without the trust of your employees and your customers and partners. I see that every day in my industry. I see a crisis of trust in technology.
The second officer that we had to add was a Chief Equality Officer, because the Fourth Industrial Revolution has created inequality. Where I live, in San Francisco, we have a terrible homeless problem, the separation of rich and poor and housing prices that have gone up to a million-and-a-half dollars.
At the end of day, there has to be some corporate and individual soul searching, he argues:
What it really says is that we have to check in with ourselves. The future is about every one of us taking personal actions to improve the state of the world.
5IR? As Schwab drily observed, he’s going to have get to work on a new book!
But the underlying point made by Benioff is sound. The trust crisis is a tipping point in so many ways and paves the way for reform. We’ve written a lot at diginomica on the rise of the Citizen CEO and the 5IR will surely be dependent on he or she becoming the mainstream manifestation of executive responsibility.
That said, there are many battles yet to be fought and won around equality and ethics and societal responsibility. The recent Proposition C campaign in San Francisco - to introduce a 0.5% tax on firms with a turnover of more than $50 million and use the money to tackle homelessness - is indicative of the divide that still exists. As Benioff, who became a figurehead for the successful yes campaign, noted yesterday:
What happened? It was the parting of the Red Sea. There were two sets of CEOs. One set over here, committed to improving the state of the world, paying the tax and helping the homeless. Another set over here said, ‘No, no. We can’t do it, it’s too expensive. We’re going to impact our EPS, our shareholders. We’ll have to leave the city’. It was a war, fuelled and funded on both sides.
There will be other wars to come and many CEOs and digital leaders will have to be brave enough to “transcend my fear” of activism, as Benioff describes it.
There were two other takeaways from the conversation between Schwab and the Salesforce co-CEO that are worth concluding with. The first came when Schwab asked what had contributed to Salesforce's growth over the past 20 years, to which Benioff replied:
Our values created value.
The second is a general observation that, if it hasn’t already been learned, will have to be learned by organizations everywhere in the putative 5IR:
Business can’t be separate from the world.
To which I can only add - preach it!