Return to office: ‘There’s a rhythm’ to meeting with your team in-person, Slack CEO says

Slack CEO Stewart Butterfield speaks with Yahoo Finance's Brian Sozzi at the 2022 Dreamforce Conference about why working in-office can be more beneficial to employees than working from home.

Video Transcript

[AUDIO LOGO]

SEANA SMITH: All right. We have been covering Salesforce's big Dreamforce conference this week. Well, Yahoo Finance's editor-at-large Brian Sozzi sitting down with Slack CEO Stewart Butterfield and getting his take on what it's like being a leader in the tech space, the company's integration into Salesforce, and the future of work. Let's take a listen.

STEWART BUTTERFIELD: I make this argument. It goes like this. If, in March of 2020 in some parallel universe, we were allowed to keep on meeting in offices, traveling for work, using conference rooms, commuting, and all that stuff but you took away the software, then every large enterprise would have just disintegrated, like, it would have ceased to exist in 24 hours. I find this very compelling evidence that we, as a matter of objective fact, kept going, and even thrived in many cases, through the pandemic despite the fact that we couldn't go to the office.

But if we were allowed to go to the office and you took away the software, it wouldn't have worked. So there is this-- we say digital HQ is a marketing term, but there is this digital infrastructure that supports productivity and collaboration that's really essential that, from my perspective, I think people have underappreciated or underinvested in because it's intangible, because it's invisible.

And, look, if you were a manufacturing company, you're relentlessly looking for ways to optimize the factory floor and the productivity. We don't do that so much for knowledge workers. So this is a long answer to your question, but I'm just starting to see that kind of creep into the consciousness. People are realizing the possibilities to transform the way they work, to rethink organizational design, management structures, peer feedback, performance reviews, all that stuff really leveraging the digital technology that we've taken for granted.

BRIAN SOZZI: What is the evolution of Slack? So I caught the keynotes. I've talked to your Chief Product Officer Tamar. There seems to be a new evolution-- or an evolution playing out in Slack now that it's really been integrated inside of Salesforce.

STEWART BUTTERFIELD: Yeah, I guess there's-- so there's two things. One is you just mentioned the integration into Salesforce, so this kind of deep across the Customer 360, Service Cloud, Sales Cloud, MuleSoft, Tableau, the whole thing. And obviously there's a lot of Slack customers here. There's a lot of Salesforce customers. There's a lot of people who are customers of both. But there's a lot of curiosity about the power of that integration and kind of Slack's traditional idea that we want to be a multiplier on the value of your other software.

The other thread, I think, is if you imagine starting to work at a new company where they use Slack, you can scroll back to the last six months of conversation with your team, you have all this archive, all this history, you can search. On the other hand, if you join a company where the primary means of communication is email, you start with an empty inbox. And it's, like, anyone wants to share any of the hundreds of millions of messages you're cut off from, they have to do it one at a time manually. So there is this accretion of value the longer an organization uses Slack.

But what we want to do now is look at the 30 hours a week we spend on video calls where there is no-- there's not even a receipt left at the end that says that the call happened and start to think about what can we do to facilitate the curation, collation, collection, organization of the materials that were shared, the notes that were shared, and start to think about a different way of working live that really captures some of that value so that, in my dream, in the future, a couple of years from now, you can get invited to a meeting, and you're, like, no, I'll just catch it after because right now there is no catching it after.

BRIAN SOZZI: Why are we still meeting like it's 2019? I just had somebody put something on my Google Calendar. It feels-- it feels outdated.

STEWART BUTTERFIELD: It's-- there's such a strong bias towards the status quo. And I think the other part of it is at the extreme, there's, like, the Amazon six-page memo format where you have to know PowerPoint, write it all out. We're going to start the first 10 minutes of the meeting in silence while everyone reads. But we're human beings. So if you have-- like, here's your two choices.

Choice A is carefully write out your thoughts and edit them for concision and clarity and be careful to articulate and all your arguments are in order. And then receive the written feedback of your peers and carefully read that and incorporate their thoughts. But the other one is, like, option B, let's have a meeting for 30 minutes. This is, like, Brussels sprouts and broccoli and stuff. And this is, like, a Snickers bar. So people are always going to choose this easier path. So how can we make this path the easy, obvious, simple one?

BRIAN SOZZI: Last time I saw you was Davos, and we were just starting to get these return to offices, notably out of the banks, but a lot of other companies. Does that just drive you crazy? Why are we mandating people to get their butts back in the seats in the office when we have tools like yours that we don't need to be in there?

STEWART BUTTERFIELD: Yeah, but certainly, the idea of people going back to just hundreds of thousands of square feet of desking, I sometimes say, like, factory farm, battery chicken housing for people to sit and use their laptop by themselves with the headphones on, they're not even talking to each other, that part you could do anywhere. I mean, I think, obviously, there's value to getting together in person, depends on the team and the function.

But I feel like there's, in the ideal world, a rhythm where you get together, maybe it's only once a year, maybe it's every other week, and you build up a lot of work to do, you kind of prioritize things. And then the execution mode, give people flexibility because they demand it. We've had the mandates get back to office. And I think outside of a handful of smaller exceptions, San Francisco is 30% still, New York is 50%. There's not significant movement coming on this front.

BRIAN SOZZI: Lastly, now that these platforms have been integrated-- Stewart, you're a serial entrepreneur-- what is it like being an entrepreneur inside of a much larger company?

STEWART BUTTERFIELD: It's interesting. Obviously, there's a lot-- there's a lot more inertia. I don't mean that in a critical-- I guess there's a lot more momentum, let's say. And there's, like, the same class of problems to solve at a bigger scale. So I think there's both additional challenges and kind of also additional opportunities.

Salesforce is in a really interesting position where I think there's a lot of top-line growth left-- and we've talked about a goal of $50 billion in revenue by fiscal '26-- but also really significant improvement in margins going from 20% just now, 25% in that same time frame that'll have a huge impact on the bottom line.

BRIAN SOZZI: Do you miss being a public company?

STEWART BUTTERFIELD: I don't know if I miss this particular six-month period.

BRIAN SOZZI: You don't miss our chats for earnings?

STEWART BUTTERFIELD: I-- well, I do miss that. But, gosh, the last six months have been pretty rough. I got a lot of public company CEO friends, and it's tough.

BRIAN SOZZI: Do you think when you're-- I'm not saying to predict stock price or bottoms here, but what is going on out there? And what is it going to take for some of these tech stocks to just come out the other side? I mean, is demand that bad to warrant some of these sell-offs?

STEWART BUTTERFIELD: I think the multiples have probably come down to something that looks pretty reasonable. A lot of-- I think the average, even for software across the board, is something, like, 5x forward revenue, which is, yeah, compared to-- I don't even know what the average was-- 18 or 20x or something like that at the peak.

I think the open question for investors is still, do we see a change in demand, and therefore an actual change in performance because the multiples are probably about good? And if we collectively determine that we're not going to see a real decrease in demand, we're going to see a real decrease in economic growth, then I think we have a lot of upside from here.

DAVID BRIGGS: Stewart Butterfield, the Slack CEO, with Brian Sozzi.