Leading the People into the next millennium

PeopleSoft has had a difficult few years, and has brought in Craig Conway to inject a new level of “intensity” into the traditionally laid-back company. While at Vantive2000 in San Francisco, he spoke with ComputerWorld Canada senior writer Chris Conrath about lessons learned, corporate culture and the next wave of enterprise applications.

CWC: What lessons were learned from the tough years of 1998 and 1999?

Conway: I think that it is important to remember that 1999 was a tough year for the whole enterprise application industry because of a market issue. So I think lesson one [was that] market issues happen. That led to a second awareness [which] is, how well is your company prepared for adversity? I think from that perspective PeopleSoft learned [that], although it was huge as a software company and had the outward appearance of a fully mature company, in reality the company had grown so quickly it didn’t have all of the infrastructure, the processes, in fact the people, to run a company of that size.

In the year that I have been here there has been a complete transition of the senior management team. The processes, which I would consider well intentioned, have become firmer. What we have added to the company is a level of accountability, focus and intensity. When you are growing at 80 per cent plus per year you don’t necessarily notice when infrastructure issues are softer than they need to be. That has really been the dramatic change in the last 12 months. Our company is run like a $2 billion company would be expected to be, by people you would be expecting to be running a $2 billion company.

CWC: What is happening in the enterprise applications industry?

Conway: This year, probably in the next 60 days [to] 90 days, enterprise applications will fundamentally change again for the first time in 10 years. Every 10 years or so there is a total architectural change in enterprise applications and the whole deck of cards is reshuffled. Some of the cards fall out. Ten years ago Dun and Bradstreet and MSA were the two largest enterprise application companies.

After client\server technology became the standard architecture, and they could not keep up, they were gone. I would say every trade magazine in the industry, in the next three months, will write the same article: “We looked at the new Internet apps and here is what came out on top.” We are confident that PeopleSoft’s architecture can be shown to be completely superior. We think that once again we will look like the company that maybe didn’t have the greatest marketing plan, but once again came to market with better products.

CWC: How do you inject a level of intensity into a company like PeopleSoft, with its laid-back image, without overturning the carts?

Conway: The answer is a complementary process. The company has become a world leader with a strong brand and a strong culture. So at the same time, if you want to [change] you have to do it in a way that doesn’t alienate employees that have been attracted to the company because of the culture and customers who were attracted to the company because of the culture. The company published, 10 years ago a list of eight values. Dave Duffield (PeopleSoft founder) wrote those values. They include things like integrity, respect, customer satisfaction, profitability and having fun. At a company meeting about six months ago I announced that we would add three to the list: accountability, intensity and competitiveness. When a CEO sets a tone it does tend to filter throughout the company and that is what is happening with PeopleSoft. Today it is a company with a great blend. You will not find very many people who will say PeopleSoft’s culture is worse than it was before.

Actually, I think what you would find, if you went and interviewed a whole bunch of people at PeopleSoft, that we like having a bit of the edge, we like having a little bit of this ability to throw punches. We were conscientious objectors in a war of high technology. We didn’t believe in violence. Today if somebody pushes us against the lockers, we push them back.

One of the reasons that we have never challenged the culture at PeopleSoft is that there was no reason to. We went from no products 12 years ago to the number one company in HR…so we never had to question being a non-violent type. The neighbourhood is tougher today…and I think [intensity and competitiveness] will allow us to continue to be a leading provider in a much tougher neighbourhood.

CWC: How do you keep stock performance from influencing corporate direction and discouraging employees?

Conway: There are two levels. One is a personal level. What is the impact on me, does it concern me, does it challenge my beliefs, do I change my behaviour? And the second one is the impact on the company. In the first case, it is easy because one of the things that comes with age and experience is you note that stock prices, in many cases, have little to do with the reality of the company. You realize the stock price doesn’t mean anything other than the people who know 100 times less than you are speculating on your direction. The real difficulty is the impact on the company because it is the single greatest mood setter for employees.

If it goes up five points employees are ecstatic, if it goes down five points they are demoralized – and dealing with the fallout is the thing that has to be managed. How do you obviate those swings? What we have tried to do is accelerate the communication channel to employees. I put out employee correspondence probably every 10 days. Everyone in the management committee does the same. Employees are reassured of the validity of the direction [of the company] and their confidence remains high even though there might be a fluctuation here and there.

CWC: If customers are unsure about using your company as an ASP host, how do you deal with that?

Conway: You show that the level of security built into your ASP is greater than the amount of security that a customer would have. When you are running an ASP you’ve got multiple layers of security on top of security, so ultimately customers have a higher degree of security with your ASP than they do with their own operation. None of them (companies Conway has spoken to who provide ASPs) have mentioned security as a critical decision factor for their customers.

CWC: Can a company have too much information?

Conway: We have talked about [information overload] for many, many years and this might be the era you really do see a sense of saturation in information, simply because of the readiness of it via the Internet. As a company, in corollary to that, everyone wants to better understand the customer and the buying patterns and the information that will help them do their job. I think the key will be distillation. I think the most exciting analytic apps in the next couple of years will be applications that present a distilled, well-organized metric-like information vs. what I consider to be reporting-type analytic capabilities. I think there will be a trend in that direction. I think distillation of information will become a key area.

CWC: Are you working distillation products?

Conway: With the PeopleSoft Enterprise Portal, everything on the screen that has to do with your job is colour coded: green, yellow or red. If you look at your screen and anything is in red, click on it. So instead of looking at anything that is doing pretty well, you can immediately drill down to reds. Navigating a PeopleSoft application will be largely a colour-coded exercise. When you look at an SAP, Oracle or PeopleSoft, we are all claiming to have the next-generation of enterprise applications. PeopleSoft has a completely different kind of interface. It is a totally Web user interface, hyper-linked [and] colour coded.

CWC: With everything moving onto the Internet, did you rebuild applications or build from ground zero?

Conway: We started two-and-a-half years ago and rebuilt from ground zero. We noted that when an architecture changes fundamentally, the companies that tried to tweak their architecture took so long, and the result was so disappointing, that they lost viability. Once you lose viability in this industry you are dead. So in order to take advantage of Internet architecture we felt that we had to totally go back to scratch. Keep in mind this is a huge undertaking. I mentioned in my speech that we spent 27 per cent on R&D – I am not that sure it is necessarily because we wanted to. We had to do that.

CWC: We often hear the customer is an integral part of the business process. Has the Internet been the last piece to that puzzle?

Conway: That is right. I think the Internet put the tools into the hands of your customers to allow them to become part of the process, part of the business. You see it at a business level with e-procurement and supply chain management, where, in seconds, you can alter your company to capitalize on an opportunity or to avoid a threat to your business, through superior relationships with your suppliers. On the consumer level you have the ability to extend the lead over your customers or suffer a competitive blow by the kind of relationship you have with your customer.

CWC: Where will PeopleSoft go in the next two to four years?

Conway: I think the strategy comes down to using customers and suppliers and employees as part of your business advantage. If PeopleSoft can help companies harness the Internet, to make their employees and their customers and their suppliers part of the advantage of doing business, that is Nirvana for an enterprise software company, and that is our strategy. We, through our Internet architecture and the breadth of our applications, have harnessed the Internet for the use of your employees, suppliers and customers such that [they] are now part of the competitive advantage. I think that is the strategy of PeopleSoft.

CWC: PeopleSoft is known as an HR company. What should we call you now?

Conway: A provider of Internet-based e-business applications to run your business to include employees, suppliers and customers.

CWC: If you retired tomorrow, what would be your legacy?

Conway: I’d like people to say Craig developed PeopleSoft into a next-generation, aggressively-competitive company.