Salesforce CEO Marc Benioff says that this is a 'New Day' for Salesforce, focusing on profitability above its famous 'Ohana' mantra

Salesforce CEO Marc Benioff says that this is a 'New Day' for Salesforce, focusing on profitability above its famous 'Ohana' mantra
Salesforce CEO Marc BenioffNICHOLAS KAMM/AFP via Getty Images
  • As Salesforce faces activist investor pressure, profitability is now CEO Marc Benioff's key focus.
  • Benioff is now touting a strategy called "New Day," focused solely on profitability and efficiency.

As Salesforce faces pressure from activist investors to increase growth and improve its profit margins, CEO Marc Benioff has declared that this is a "New Day" for the cloud software company.

Benioff is well-known for touting the company's stakeholder capitalism approach to business, saying the company is accountable to employees and its community as well as shareholders. He's also promoted a culture at Salesforce that has emphasized that employees should view each other as "Ohana," a Hawaiian term for family.

However, it looks like those days are over, at least for the time being. On the company's quarterly earnings result call on Wednesday, Benioff and other top Salesforce execs largely set aside mention of the Ohana (apart from one or two brief asides during the call).

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Instead, those execs hammered on that "New Day" strategy, which emphasizes profitability and efficiency over all else. Benioff told analysts during the call that profitability is his number one strategy, and admitted it's a change from how the company used to operate. It's also eerily similar to Amazon's famed "Day One" corporate mantra.

"We've never had an efficiency focus in the company before, because we've had 24 incredible years where we've had to just grow, grow, grow," Benioff said on the call. While they have had to pull back and reassess during past recessions, the focus on efficiency this time is different, he said.


In concrete terms, this approach already appears to be bearing fruit: Salesforce reported profit margins of 22.5% in its most recent fiscal year and is setting a goal of 27% this year, inching closer to the 30% that Salesforce leadership is said to be targeting to fend off pressure from activist investors like Elliott Management and Starboard Value.

The company's stock rose over 15% in after-hours trading on Wednesday after the company reported strong revenue growth and expanded stock buybacks.

"As we entered our fourth quarter, we recognized that we needed to radically accelerate the transformation plan timeframe," Benioff also said. "We need to repress the hyperspace button and bring the two year goals forward quickly and exceed them."

The new strategy is focused on four areas, Benioff and other executives said on the call with analysts: short term and long-term restructuring of the company, improving profitability and productivity, prioritizing our core innovations, and a deeper relationship with shareholders.

This strategy is reflective of the turbulence Salesforce has gone through in the last few months.


The company's recent layoffs, as well as Benioff's comments that employees haven't been as productive since the start of the pandemic, have weighed on employee morale. Former co-CEO Bret Taylor and other top execs like Slack CEO Stewart Butterfield have also departed Salesforce in recent months. That tumult, coupled with the larger slowdown in the tech sector, have led to a difficult period of change for Salesforce.

Salesforce executives for their part are seeing this moment as a time to "reassess," Benioff said.

"Changes that used to take weeks are happening in days, and changes that used to take days are happening in hours," Benioff said.