Salesforce is saying it’s controversial ‘performance culture’ contributed to strong earnings result

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The tech company has reported a first quarter revenue of $8.25 billion—up 11% year-over-year—fortifying the company’s full year revenue promise of up to $34.7 billion, a boost of approximately 10% year-over-year.

It’s been a hard-won struggle however, after Salesforce shed 8,000 members of staff after its stock price fell by around 50% in 2022.

Perhaps unsurprisingly, the culture of the company has shifted as a result.

As well as CEO Marc Benioff being blasted by his employees for “evasiveness” around the layoff issue, the staff fondly referred to as “Ohana”—or family—now find themselves embedded in a high-performance culture.

As he discussed Salesforce’s latest financial results on call with investors this week, Benioff said Salesforce had “reignited [its] performance culture by focusing on productivity, operational excellence, and profitability.”

Benioff said the company was “just getting started” on its transformation, adding: “We continue to scrutinize every dollar of investment, every resource, and every spend.”

The CEO was echoed by his chief operating officer, Brian Millham, who similarly reiterated that a change in culture was a key driver of the company’s success thus far.

“Our focus on performance, culture, and operational excellence contributed to our strong first quarter results,” he explained.

“We clearly defined our return in remote office guidelines for employees, and it’s been great to get together even more in our offices and with our customers around the globe. I had the chance to visit many of our offices this quarter, and the energy is incredible.”

Some staff aren’t a fan of the harder-line approach, sources told Insider, with employees questioning whether performance-related terminations would make up any of the wider layoffs across 10% of the company’s headcount.

However former managers told the outlet that the move was necessary, as in the past legitimately “terrible” employees hadn’t lost their roles because of how difficult it was to fire people.

Where has the change come from?

Benioff has been pushing his high-performance and efficiency agenda since the end of the pandemic.

In an internal memo seen by Fortune in February, the CEO wrote: “Wellness culture overpowered high performance culture during pandemic. Fear of escalations for people-related issues (burnout, psychological safety, equality, etc.) can make managers reticent to performance manage their teams.” 

However the cofounder of the company may have been spurred into action by incoming active investors including Elliott Management and Starboard Value, who threw down a gauntlet for the company to cut costs and boost profit margins.

The pressure also shows no sign of letting up, as Benioff pointed out that Salesforce’s customers are continuing to analyze every detail of their services, as well as pausing longer-term projects in favor of “quick wins and fast time-to-value”.

And although chief financial officer Amy Weaver said the company has “largely completed the restructuring” announced in January, “organization structure” remains one of the three pillars of the next “implementation phase” of the business.

Weaver explained: “As we shift to the implementation phase, we’re executing against three key pillars: optimization of resources and organization structure, product investment prioritization, and operational rigor.”