What are the advantages of an ethical business? What type of business model does Salesforce follow?
According to Marc Benioff, the best approach to business is to place moral principles at the forefront of organizational decision-making, which is a model called principled business. In this model, profit isn’t the sole driving force; instead, it’s balanced with a commitment to social responsibility, environmental sustainability, and internal fairness and equity.
Let’s look at how ethical businesses drive success, using examples from Benioff’s company Salesforce.
How Principled Business Benefits Everybody
Benioff credits Salesforce’s immense financial success to its practice of principled business. To support the belief that there are advantages of ethical businesses, he cites a variety of statistical evidence: For example, one survey shows that customers are more likely to approve of (and therefore buy from) companies that demonstrate social and environmental responsibility.
(Shortform note: This trend has held fast since Trailblazer’s 2019 publication: In 2023, experts shared that consumers are more likely to buy products whose labels claim their makers exercised social and environmental responsibility, especially when more than one such claim is made. But consumers’ preference for principled products is mediated by their budgetary limitations: As post-pandemic inflation shrinks consumers’ spending power, they’re more likely to seek out affordable products, and data suggests they may not be willing or able to pay a premium for more socially and environmentally conscious products.)
Additionally, Benioff says internal research shows that one reason employees are drawn to work at Salesforce is that they feel they can stand behind the company’s principles and feel good about their contributions to society. Attracting and retaining talented employees helps Salesforce accomplish its larger mission and make profits, contributing to the company’s overall health.
(Shortform note: Research suggests that most US employees don’t feel that their companies’ stated principles translate to their daily job activities. This may contribute to an ongoing crisis in employee engagement (the measure of how invested employees are in their jobs), which is partially determined by employees’ feeling of pride in their work and sense of contribution to society. Since practicing principled business means that Salesforce prioritizes its principles in every organizational decision, it’s more likely that employees will see their work as meaningful and aligned with admirable principles, leading to higher levels of employee engagement and, therefore, improved performance and better profit margins for Salesforce.)
Principled Business Is a Solution to Modern Global Challenges
Benioff believes that humanity is on the cusp of the Fifth Industrial Revolution—an era where moral responsibility will be built into technological innovation as the industry’s underlying purpose and guiding ethos. As we transition into the Fifth Industrial Revolution, he says, principled business will become a matter of course because stakeholders will demand it. These stakeholders include conscientious customers and employees, an enlightened society that is increasingly intolerant of businesses’ bad behavior, and a global environment that demands sustainability to prevent large-scale ecological collapse. Since principled business leads to better financial outcomes, investors and stockholders will demand it, too.
Benioff also explains that the global public’s confidence in the technology sector is quickly declining because it’s neglected to adequately regulate itself, citing mass privacy breaches and technology-mediated political manipulation as examples. At a 2018 meeting of the WEF at Davos, Benioff warned tech moguls that if their companies don’t correct these problems, governments may step in and more strictly regulate their activities. Practicing principled business is an alternative that can help companies avoid that outcome.
