Victoria Barret - Upside Potential - Forbes

For the current cover story of Forbes magazine, we teamed up with disruption expert and Harvard professor Clayton M. Christensen. He has developed a new way to spot companies making bold bets for the future, and has a recently-released book detailing the findings called The Innovator’s DNA (Harvard Press) . Marc Benioff of Salesforce.com tops his list of great innovators. What follows is my story on Benioff, and a glimpse into the mind of a relentlessly forward-thinking leader.

Marc Benioff is in Hawaii on vacation. Which means that, aside from catching up with his family and stepping back from speaking gigs and customer visits, he’s tinkering with new toys and new ideas. He’s been playing with Google+. He’s been cruising in a Chevy Volt—“the most fun car I’ve ever driven,” he says. He’s been trying out four tablet computers and having a fling with new Web-publishing software.

The cofounder of Salesforce.com, which sells business software in the “cloud,” says he has also been “aggressively” hanging out with young entrepreneurs. It’s how he stays plugged into the current of innovation—which may lead to who knows where? Last fall he introduced Drew Houston, the 28-year-old cofounder of the file-sharing website Dropbox, to Pearl Jam. Months later Houston came to Benioff’s San Francisco home when President Obama dropped in for a $35,800-a-plate dinner. Houston was there again when California Governor Jerry Brown broke bread with an exclusive tech crowd.

Why does Benioff, who is 46 and a multibillionaire, bother with this kid? “He grew up in the Internet,” Benioff explains. “I didn’t. He is the next generation of innovation.” Salesforce is figuring out how to borrow Houston’s ideas to make software more fun to share. (Example: Dropbox gives its 25 million members extra storage for sharing files with nonmembers.) “My job is to guide Salesforce,” says Benioff. “I can’t sit in headquarters and pretend I’m in touch. Odds are, what we’re using today will be obsolete in a few years. The past is never the ­future. But it’s easy to get caught up in the continuum.”

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Benioff is a disrupter in the classic Clay Christensen sense: By bringing business software to the Web—an idea ridiculed a decade ago—Benioff upended Siebel Systems (later acquired by Oracle Systems) and built a company on track to reach sales of $2 billion in fiscal 2012, ending Jan. 31. Its “innovation premium” of 73% earns Salesforce the top spot on the list of the world’s most innovative companies. Meanwhile, the industry is following Benioff’s lead in taking software from disparate servers inside companies to the cloud.

But that’s so yesterday. Benioff is onto the next “transformation,” which he calls “the social enterprise.” Last June he launched Chatter, software that acts like a social network inside companies, allowing co-workers to update groups on projects and deals, solicit comments and spark conversations.

The social bug bit five years ago, when Benioff starting using Facebook as his personal marketing machine. In late 2008 one of his top engineers e-mailed him a simple shot of Facebook’s news feed inside Salesforce software. Benioff ­ordered half his developers to drop what they were doing to focus entirely on making the company look and feel like a ­social network so that a deal, for instance, could be tracked and commented on by groups of employees.

Old projects die hard. Coders balked; the idea seemed a fantasy, a dangerous distraction. By June 2009, with Chatter way behind, Benioff phoned from his Big Island retreat and yelled for an hour. Parker Harris, a Salesforce cofounder and close friend, told him to back down. Benioff refused.

By dint of his cajoling and bullying, Chatter took hold inside Salesforce. At the company’s annual management meeting last August, a gathering of 300 executives, Benioff set up video cameras so that any employee could hear the discussions and comment—via Chatter. For a few minutes, as the cameras rolled, nothing but the crushing weight of silence. Then someone from Singapore chimed in, and employees from San Francisco to Sydney, Australia piled on. “With that,” says Benioff, “the culture of our company changed.” Now 100,000 companies are trying out Chatter, which is largely free—a loss leader to spread Salesforce’s reach within clients.

Benioff isn’t done with “social”-izing. “Now I’m advising customers to put their products on the social network,” he says. When Toyota Chief Akio Toyoda visited, Benioff told him his cars should be linked to social networks. Look for it in Toyota’s electric and hybrid cars, starting next year.

via blogs.forbes.com