Why Salesforce Bought Rypple and What It Means

Last month, cloud-based corporate software provider Salesforce acquired social performance management company Rypple. Going forward, Rypple will become Successforce. The deal is not yet finalized, but right off the bat it raised a number of questions. First of all, was this acquisition Rypple’s goal all along?

“No, this is not something we were looking for,” said Daniel Debow, co-founder and co-CEO of Rypple. “The motivation for building the business was to reinvent a lot of how things were done. Basically, the world of work changed so much in the last 50 years, but the approaches we were taking toward managing people and helping to get the best out of them – performance, really – were pretty consistent, and in fact most of the technology that had been brought to bear was really forms automation on a large scale.”

Some call this the “pave the cowpath” approach. Rypple sought to counter that stagnancy in performance management by offering a social performance platform that helps organizations track and manage feedback to employees. But Debow isn’t sure if this is why Salesforce moved to purchase the company. “You’ll have to ask John because you don’t ever know; they never tell you specifically,” he said.

John Wookey, executive vice president of advanced applications at Salesforce, will be heading a new HCM division to manage the re-launch of Rypple as Successforce. According to Wookey, Salesforce and Rypple were brought together by a common customer – Facebook – and Salesforce decided to move forward with the deal when it recognized what he terms “an alignment of vision.”

“It was where Salesforce believed they needed to go next to really help bring to reality this vision they had of the social enterprise,” Wookey said.

Salesforce will initially offer Successforce as complimentary to Chatter, its cloud-based social networking platform. Wookey plans on an eventual “tighter integration” of Successforce and Chatter. “They’re definitely going to play nicely together and work together and we’ll see where it goes,” Debow said. “There are a ton of ways that Rypple can enhance not only Chatter but also some of the core Salesforce offerings of automation, service cloud, sales cloud and other products.”

You can sense a lot of ambition here, and Debow admitted that Rypple looks at this deal as a way to “dramatically accelerate” its growth and evolution as a company. But he acknowledges that this isn’t going to happen overnight and toward that end is waiting for some of the dust to settle from the acquisition itself.

“So I know that on day one it won’t have everything that we want it to have. Not now doesn’t mean not ever,” he said, and was similarly circumspect when asked to speculate how long it will take for the changes in HR software that Rypple represents to take hold across the industry. “It’s already happening in our customers. How long until everybody everywhere takes us on? I don’t know.”

Debow feels his company represents a change not so much in HR software as in business software overall. “Successforce isn’t just about building a better performance management tool and it’s not even about building a better HR management,” he said. “It’s about how do we look at, from a completely different perspective, how business gets done.”

I have to admit, when I first heard of Rypple, my initial read was that it was so continual and socially driven that it would move performance management right out of HR and into the hands of managers and employees, which is perhaps where it should reside. Debow acknowledges this potential shift head-on.

“The management of human capital is not the sole purview of the HR department,” he said. “It’s actually managers who do that more than anybody, and one of the things we’re really focused on is how do people become better employees and managers. It’s not solely by automating processes that have traditionally been managed by the HR department.”

This is why Debow can’t really say what, if anything, in HR Rypple is meant to replace. “We’re not trying to just replace an HR process. Quite candidly, HR processes are a byproduct of improving the core process, which is how do you help people get work done better,” he said. “We’ve focused on what’s the stuff about human beings and management that actually makes them perform better – regular coaching, regular feedback, regular recognition for doing a good job.”

Wookey agrees that Successforce represents taking performance management beyond HR. “While it’s certainly a move into an area that traditionally was human resources, the much stronger focus is on helping companies embrace these new social models when it comes to their core management processes,” Wookey said. “So that means everything from how you acquire talent; how you on-board it successfully; how you manage people’s performance, and those are processes that are inherently social.”

OK, so performance management is going social, or so it would seem from all the chatter surrounding this deal. But how much of the appeal of these new tools is generational? That was a core question I had going into this, as any time a business process is overhauled via a social network, you wonder if it’s to appease millennial employees. Wookey broached the subject himself.

“You’ve got people now in their 20s and 30s and in some cases 40s who are not only the core of the people getting the work done now but increasingly are the first-line managers,” he said. “These people have been raised in the very different world of technology than the original audience for which ERP and CRM systems were built and the expectations they have for software are very different.”

Once these expectations have been met, Wookey said, the appeal of a social performance management tool becomes more general because everyone in the workforce has experienced frustration with performance management. “Their one goal was to make sure that once a year everybody got a performance review,” he said. “That was perfectly fine and they met that goal, but they didn’t do anything to really enable a better working relationship across the entire company.”

This, Debow pointed out, is exactly why millennials want these types of tools. “The next generation is always looking for a faster, better way of doing things,” he said. “People don’t frame the problem the right way. They think ‘Oh, it’s just these young kids who want this thing.’ I don’t think that’s it at all. I think it’s spread amongst those because they naturally gravitated to the things that would help them get their ideas out, collaborate, find people.”

Debow thinks millennials find it important to take work seriously but enjoy it as well – to have some fun. He added this philosophy is aligned with Rypple and Salesforce’s company cultures, which is part of the reason they came together. But, he said, in approaching the market for performance management tools, Rypple met a great deal of resistance to this idea.

“People take themselves really, really seriously,” he said. “Of course, this is a serious business; this is big dollars. But I think people sometimes get over caught up in the portentousness of the importance of the thing they’re doing instead of saying ‘Hey, does this actually help?’”

So does it? As talent manager, are you satisfied with the performance management process you have in place right now? Does it actually help your company overall perform better? Does the idea of a social performance management platform appeal to you or are you already using one? And do you think this change in HR software is the wave of the future or a passing fad?