Salesforce, Inc. (CRM) Earnings Call Transcript & Summary

Yes. So they can log on to www.billiondollarroundtable.org. A survey will pop up just so that the BDR understands which industry they're in and what level in the organization the respondent is. And then it will begin to share best practices and ask the survey respondents what best practices they have. And then they'll also be able to see who are the 30 companies that are part of the Billion Dollar Roundtable.

Excellent. Thank you so much for sharing that. Thank you. Dee, I'm going to turn to you next, representing the minority business community on this panel. We know that there are some diverse suppliers in the industry that are afraid to actually state that they are diverse. And sometimes they don't get certified or registered with any of the NGO organizations that are there to advocate on their behalf. What type of feedback or coaching or information with use, which you give those suppliers to help them leverage their diverse status during this time right now?

Thank you, Adrienne. Let me start off by saying, one, WWT is in a blessed position, that we've been in business for 30 years, and we're celebrating our 30-year anniversary this year. And when I talk to NBEs and they say to me, well, I shouldn't get certified, I say I got 13 billion reasons why you should be certified. And that's the amount of revenue that WWT did last year. And that $13 billion isn't all from just being a diverse supplier. Of course, you got to be great at what you do. But a lot of times, the conversation with a customer may begin with around supply diversity. And we've been blessed at when we talk about the Billion Dollar Roundtable, WWT does business probably with about 90% of them. So when companies say that they're nervous about being a minority-owned company and I said, well, been the largest minority-owned company, a $13 billion company, I think, is really important because one, it aligns with some of the things that our customers are looking to do. And more importantly, when you start talking about being a minority-owned company, you have an obligation to give back to the community. And when you hear companies like Intel and Johnson Controls speak earlier about what they're doing, it aligns to what WWT is doing as well. So what better way than to tell a potential customer that you align with all of their business needs from being a minority-owned company but to make a difference in the minority community as well. So 13 billion reasons why you should be minority certified.

Those are some great reasons, right there, 13 billion of them. So thanks for sharing that. And I think you're absolutely right when you -- one of the things that we try to tell minority business is that it's not about being a minority business. It's about being a great business that just happens to be of minority status. So make sure they lead with their business solution and business strategy first. And then you're right, the benefit of that is being able to connect back to those diverse customers that they represent in the communities that they're serving. So thank you for being a leader in the space. And creating those opportunities for other minority businesses to follow. Craig, I'm going to turn to you next. Salesforce, as we know -- well, first of all, the tech industry overall has really trying to build their Supplier Diversity supply chain and in Spain. You talked a little bit about salesforce and with a salesforce commitment to supplier diversity overall? And how do you get the leadership team to embrace it the way that you have so far?

Thank you. Good morning or actually, right now, good afternoon. A little good afternoon here on the West Coast. To my fellow panelists and Adrienne, thanks for asking me to join. So when we think about Supply Diversity and salesforce, so tech has struggled overall when Supplier Diversity. Tech has struggled with diversity. So I think we should just call it sort of as we see and we put it right out there. We go from the number of suppliers that we employ and get on our roles in pay to the number of employees from lower level to evacuate. It's been a problem, and it's well documented and well known. Salesforce is a bit of a different company. And we're 21, almost 22 years old this year. And our founder is still here, Marc Benioff and has been very focused on the culture of the company, and we have a very inclusive culture, and that manifests itself in a number of ways. So we think about diverse suppliers, they come and we employ them in a number of different areas, all the way from celebrities to any of you've been to dream for us. All the way down to folks that help us run the business. But we know that we can do more. With what's happened in the country very recently with the world will pandemic be receptor infection the current amount of civil and the risk that we have and the challenges we have around national leadership around some of these issues more imperative that we can refocus and get refocused on what it means to truly engage the power of diversity in the company. And we do in a couple of different ways at salesforce. Very recently, we called together a task force, like Larry mentioned the task force. We have a task for us, direct report to the CEO. And it follows the principles that Mellody Hobson had talked about. She talked about the 3 Ps, people, purchasing, philanthropy, and we added policy. So we call them the 4 Ps. People, like, don't be afraid of the numbers, right? The numbers are your numbers, your goal is to improve them. So milestones, measurements and money, right incentives, the right milestones and make sure you're measuring and your fortunes will improve relative to people. That's no different than what suppliers. When I have this talk, I say, guys, I'm just by recruiting team. I want to diversify suppliers, right? I don't make -- want to make sure that we have a diverse slate and that we are selecting some from the diverse slate. Purchasing, the CEO of Pivot and say, hey, Craig, what are we doing on purchasing with diverse suppliers. There's a lot of things that we can do with diverse suppliers. And we can do more dedicated amounts of spend, better payment terms, we think about semi. Semi is not -- there are very small businesses that are in semi, right? They're big businesses in semi. Small businesses have a problem getting paid, make sure that we understand those challenges because, as we all know, cash is key. What are we doing with our charitable giving, where is that money going? Is it going to education? Is it going into communities that need it? And then we think about things like policy are we -- or as we have done as a company, stood up for a number of issues that impact underrepresented minorities and groups so those are the things that we do around diversity and inclusion in our company. Specifically, in my area, we have committed to increase our spend with diverse suppliers, 25% year-on-year. We've committed -- I have committed with the company, $100 million directly to black suppliers, right, over the next 3 years. And we've committed $100 million in our ventures fund, so a separate ventures fund for investment in black on business. So we are putting our money where our mouth is which we've always done, we're talking about it more than we used to, and we've doubled down in a number of areas.

Excellent. And again, thank you for being such a leader in the space. You definitely have been representing the industry overall in terms of your ability to get momentum and have inclusion going throughout the supply chain. I'm going to turn the next question to Mary. And it's a little bit tied to the question that's come from the audience. I'm going to put a little bit of a spin on it. So welcome, Mary to this. Can you hear us okay, Mary?

Yes. Can you hear me?

Yes, we can. Thank you. Thank you. Representing Tokyo Electron, being a Japan based organization, can you talk about how you've been able to get the commitment to supplier diversity being from a company that probably represents more of a homogeneous demographic group and what type of strategies you've been able to use to get the type of buying necessary to drive supplier diversity inclusion?

Sure. And thank you for having me. I would say, working with diverse suppliers give us a competitive edge. And in Japan, we have recognized women-owned businesses. And so now we are working as a global company to explain all levels of our about Supplier Diversity, what Supplier Diversity is. And working with women-owned businesses directly in Japan, so suppliers that we have in Japan, understanding -- explaining to our suppliers what diversity is and that they qualify and then helping them through that process. Also helping all levels of employees to understand what diversity is and how we can use diversity, both for -- within the semiconductor industry. I think at times, people think that diversity or suppliers are small businesses and only used for what we would consider something not going on our tools, so indirect. And that's not a true statement. So trying to expand that. I think it's all about communication and the commitment of the executive team to understand and how -- about Supplier Diversity and how to drive that competition?

Excellent. Thank you for that. And again, we know that a lot of that has to do with how you educate and drive awareness within your organization. And as I mentioned, coming in at the very beginning, understanding what parts of the world you're doing business and what does diversity mean to that part of the world or where you're trying to build your supply chain. So thank you for giving those examples. I'm going to circle back to Shaheen now because as we talk about making progress with Supplier Diversity, we know it has to be that the best practices tell us driven from the top of the organization, right? And given the progress that Intel has made, obviously, that's something that your leadership has embraced. Can you talk how -- talk about how Supplier Diversity fits with the corporate values and the direction in the business strategy for Intel?

Sure. Thank you, Adrienne. So corporate core value for us is inclusion. And if you look at Intel's vision, right, it's -- our purpose really is to have a world-changing technology and use that technology to really enrich the lives of each and every person. So it's really core the whole inclusion, making sure that we have -- that the supply diversity concept is embedded in our core values and our purpose. So it's very deeply embedded in there. And if I look at what Intel has done, and you're absolutely right about having the vision and the direction from the top. So in 2015 is when Intel made a commitment at that time -- our CEO made a commitment to have $1 billion spend for diverse suppliers. And at that time, we were just about $250 million or so in spend. We have that goal to hit it to 2020. We actually achieved our goal a year in advance because of the initiatives we've been driving with our supply base, we make it part of our supply chain of how we drive our suppliers and how we expect our suppliers in their supply chains also to drive supplier diversity. And we have doubled down. We've got goals now that are -- by 2030 that we would have $2 billion in spend and I mentioned some of the goals, specifically for the minority and the black owned businesses. We also have our -- we are one of the largest venture funds of its kind intel cap that focuses on diverse suppliers there. And that is diverse businesses, and that is really $400 million that we've had in spend in there. So the thing I want to point out as we look at these initiatives, right, you mentioned about having the diverse businesses need to focus on their business offerings. And what I want to say about supplier diversity and how it is really embedded in is this whole program that we have is not because we want to really help necessarily, we're looking at it from a business perspective. It's a business imperative for us to get the best options, diverse options, different capabilities and the way we are going to have access to those capabilities and be able to innovate is that we have an equal playing field. And today, that is the problem. We don't have a equal playing field. So we don't have ways to reach out to talented amazing capability that exists, and that's the whole initiative of including making sure we are getting those initiatives so that then we can drive our business forward.

Excellent. Thank you so much. Thank you for that. I have a question from the audience. I'm going to post to all of you and whoever feels comfortable address this, please feel free to jump in. But one of the questions is, if the best supplier is selected, what steps can that diverse supplier take to encourage their customer to qualify the product when they are very confident and established with a current incumbent product. So it sounds as if though -- of a competition piece where you have a diverse supplier that's coming forth to participate in our RFP process. But there is a strong incumbent there, how do you ensure that they get a level of advocacy that can help them get their product to the table for consideration. You want to take that? Okay Reg.

Yes. So I -- yes, this sounds like you're reading my daily diary, right, my journal. This happens at Johnson Controls all the time. So first of all, just like Intel said, you have to have the infrastructure to have the buying teams even open to considering diverse suppliers. So that being said, those are table stakes, right? The diverse supplier is selected for more consideration. Then our Supplier Diversity team begins to work with them on helping them identify what are the gaps in our existing supply chain that they can fill. In other words, it's easier to provide a solution that the incumbents are not providing. So we make sure they prioritize those solutions that the incumbents are not providing. The next thing. I should have put that first, they have to be competitive. So in other words, they have to be able to provide whatever the product or services at a better price than the incumbent. A lot of people assume, oh, they can't do that because that's diverse because they're diverse. Absolutely not true. Absolutely not true. So we make sure that the diversifier knows that we know the pricing levels of the incumbents, and we make sure that they know they can be competitive. And if they need help with that, we tell them, okay, you should look in this type of area, you should look in delivery, you should look in logistics. Oh, that's the other thing. When we are looking at a supplier candidate, we're looking at the total value that they're bringing, not just the price of the widget or the price of the service. So we encourage them to think beyond just the pricing, but what delivery are you going to do? How are you going to manage the supply chain below you? How are you going to have just-in-time resources for us? Because if they understand the full picture of what they're competing against, we found that they compete just as well as anybody else.

Absolutely. Thank you for that. Anybody else want to add to that?

I'll add from a MBE perspective. At WWT, we realized that we're just bidding when the RFP comes out that we already lost a gain because there is that incumbent who has a relationship. So going back to the question that I previously answered about being a diverse candidate, our company and why you should be certified is using your network, using the NMSDC network to build relationships, and to build relationships so that when you get to that point, that you can be that you're not an unknown. Supplier Diversity managers can help companies in a lot of different ways in building that relationship. And so what I see a lot of times is that people wait on RFP to come out and then try to respond in your unknown commodity. Versus building relationships before the RFP comes out. And then when it comes out, people have a better idea of what your product is, and then that will give you a better chance of winning. So leverage the network that you have in front of you. There's 23 councils at NMSDC that you can be a part of. You can meet diversity managers, you can build a relationship there. You can get introductions to the right people. So that when the RFP comes out, you're not coming from a blind spot, but you're coming from a spot, hey, I know this guy or I know this company that I can introduce you to that has a great product that they've been telling me about versus nobody knowing about your products or services. So your network is the most important thing that you can have, leverage the NMSDC network, leverage your diversity status and build upon that, so that you're not coming from the dark because if they have an existing relationship, and they don't know you, it's going to be real hard to overturn that relationship.

That is a great point. I remember telling folks when I was leading a Supplier Diversity at Toyota, I had 3 pile. I had my A pile, my B pile and my see-you-later pile. A pile were the people who showed up, they were engaged. I knew who they were, and I knew how to facilitate those introductions. The B pile were the folks who we had some initial conversations. The C ones were the ones we never saw, and all of a sudden, wonder why they would put in on the RFP, and it couldn't get a response back. Well, we don't know who you are. We have to go to the whole betting process. So that is excellent advice on how to make sure that your brand is known throughout the NMSDC network or wherever you're trying to do business, I think that's really key. Jay, this question is for you because one of the things we've noticed is that supplier diversity is now really aligned with sustainability efforts, ESG efforts. It's a much broader discussion. Can you talk about how you see supplier diversity fitting with investors' commitment and developing work around ESG?

Yes, absolutely, absolutely. Rightfully so, Supplier Diversity can be heavily metrics, goal oriented and governance based activity. And I think that's how sometimes people may want to interpret it through the ESG lens, right? But I believe that we could reach higher. I believe that our diversity, without inclusion is not enough right? So it's not only about diverse and diverse spending. It's about inclusive partners, right, that can help you differentiate, that bring value and are absolutely sustainable, right? So we call that DVS in our world, differentiated, valuable and sustainable. That to me is a partner that is part of my journey and is inclusive. The data suggests that more inclusive businesses like Intel, I know for sure, based on their outreach and the work that they've done, I really want to thank Shaheen as well. She has been -- and Intel has been a great partner for us and a guiding light and a mentor on our journey. And I don't think we would be where we are without their support and help. So Shaheen, thank you so much. The data suggests that these inclusive business cultures are 2x more likely to exceed financial targets and 6x more likely to innovate and be more agile. And let alone, I think that you're going to be more attractive to future generations. So really linking Supplier Diversity to our value system has been critical to mobilizing our strategies. You heard it from Shaheen. You're going to hear it from me. Supplier Diversity is directly linked to our ESG strategies. And it's directly linked to our culture of inclusion. I believe personally that environmental sustainability and social sustainability business practices are already differentiating how companies are valued. Consuming rises, without regard to their environmental impact, the social impact, and the human impact is not aligned with our values, right? Our mission is to make possible a better future. And through these platforms and through our work on ESG, that's how we're going to accomplish it.

Excellent. Thank you for that. And again, it's kind of a much broader conversation. So I think the folks need to understand that and understand how it drives a broader strategy for companies. So thanks for that perspective. We only have a few minutes left. So I'm going to ask this final question for -- I'm going to start with Craig first and then ask either Larry or Mary to jump in with some final words. But I know that for the semiconductor industry, some of the programs are really new. A lot of companies are just getting started. Craig, what lessons or advice, which you have for those that are just getting their program started to get the traction that's going to be necessary for them to make progress with inclusion?

I think there's a lot of alignment that's required throughout not only just procurement team, but also to the company, right? This is something that even though it may manifest itself as a procurement program, it's a company program. And so driving that understanding in our senior leadership support, the CFO, the COO, the CEO is very important. And then once you get that and we understand the business case because it's a business case, it's not a nice-to-have. It is -- this -- we get better outcomes. We make more money. The last time I looked, we're about making money. That's the part where we created companies, most of us. I don't know why the wait for doing that. It becomes a platform for change. So we talk about business being one of the biggest platform for social change. This is one of the ways in which we can do that as stakeholder in corporate America.

Excellent. Thank you. Anything that you add, Larry or Mary from a Tokyo Electrons perspective?

Yes, yes. I would add to that, you need leadership behind you, you need to start small. You can't tackle it all at one time. You maybe work with your current supply base. I would say that we were very surprised when we ran our supply base through some metrics and found out that we had suppliers that were diverse but we were not counting them as diverse. I would also say, ask the questions upfront out when you're starting to speak with new suppliers, or even your current suppliers, are you diverse? And maybe they are diverse but they don't haven't read just through that whole entire process. I think starting small, having some software to assist you with that process of collecting that data and those certificates. And just having a team and leadership behind you to just hold you up to help you through that process and understand how to track it, what you're looking for and just getting -- having agility in that space and understanding that it's a slow process.

Great. Thank you for that. And Dee, from an MBEs perspective, what are some advice you would give to those that are looking to, again, get the business visibility with some of the industry -- some of the companies in the semi industry that are looking for diversifiers, what should they do? You gave some examples around how to engage with NMSDC, but are there other things they should do from a business perspective to help better position them.

Well, the first thing I'm going say is call it WWT. At WWT, we're real blessed that we're not only an MBE, but we have our own supply diversity program. And one of the things that we've done with several companies is best practices, right? And so iron sharpens iron, as Dave like to say. As we do business with the Billion Dollar Roundtable companies, they've helped us shape our Supplier Diverse program that we turn around and doing that favorite to other corporations that are trying to start their Supplier Diversity program, and we have built out a whole program for those who are interested and trying to establish it. But the one thing you learn about in the Supplier Diversity world is that everybody is a friend. Even if you're a competitor, you're a friend and everybody wants you to be so successful. So you can call up almost any diversity manager or anybody who's in the diversity world and they're going to be willing to be there to give you some advice to help you through those times. And it's going to be some tough times as you're trying to get out all suppliers and bring in new suppliers to get people on board and stuff. And so the NMSDC network is good all the way around from trying to establish a diversity program, trying to leverage contact to get business. And trying to establish a diversity program. So -- but I'm serious when I say call it WWT, not just to do business, but we can help you with your Supplier Diversity program as well. And give you that MBE perspective and walk you through all the things that we've learned in the process as well.

Thank you, Dee. And for those on the line, there are 13 billion reasons why you might want to reach out to them. So anyway. Thank you to all of our panelists today. You guys have been fantastic. You've shared some great information. Carlos, if you go to the next slide, the final slide. For those that might be interested in how you can get involved and engaged, we'll say first is, be bold, take the lead, don't wait for someone else to ask you to join. You can get involved to reach out to any of the members of the manufacturing ownership diversity group. You can join them in this work. And make sure that you try to influence the work that you're doing where you are locally and get your own program started. You've heard some great resources today on how you can get your program started, talk with your senior leadership team and make sure it's a policy that's driven from the top of the organization. And of course, being the President of NMSDC, I have to say this, make sure you align yourselves with an NGO organization, advocacy group that can help you get your program off the ground and running so that you can become more involved and get information from these types of thought leaders that we have represented on this video conference today. So you can make contact with any of the member of the MOD task force to guidance information, and you can also see the website that's listed here. So thank you all so much for tuning in today. Thank you again for the panelists for sharing your thoughts, your information. It's been a great conversation. I'm hoping that the audience was able to take away some nuggets that will help them advance inclusion within their supply chain. So -- and thank you for having me as your moderator. I really enjoy hearing from my group here and all the partners that have been able to provide information that's going to help us as we look at economic inclusion across the semi industry. So thank you a lot for being here today.

Thank you, Adrienne.

Thank you so much.

Thank you for the opportunity.