Humane Technology - PeopleSoft

David Duffield of PeopleSoft Inc. shows how powerful computers, linked to a world-wide network, can generate productivity - and let loose the human spirit.

Last April, Phil Cullen, 36, vice president of quality for PeopleSoft Inc., faced a high-stakes dilemma. His company was riding a breathtaking growth curve for sales of its software - powerful applications that big companies (including AT&T, Boeing, and Toyota) use to automate processes such as payroll, manufacturing, and order fulfillment. Indeed, so many customers had become so addicted to the company's flagship product that they were demanding the new version, PeopleSoft 7, three months ahead of schedule.

Hence the dilemma. PeopleSoft had achieved its remarkable success by doing whatever it took to make customers happy. What would make them happy now was not shipping a major upgrade on time (something that even the best-managed software companies find hard to do) but shipping it early. And that, Cullen understood, meant courting disaster: "We had more than 4,000 employees and more than 2,000 customers, and this upgrade would affect all of them. You don't make a decision like that lightly."

Especially since PeopleSoft 7 is a mission-critical product of awesome complexity. The fully featured version comes with 20,000 pages of technical documentation. Figuring out whether an early release was possible - let alone writing the code for it - was a process "that could take months at most companies," Cullen says.

Not at PeopleSoft. Cullen decided that the best way to explore whether the company could speed up the delivery of PeopleSoft 7 was to take advantage of one of the company's special skills: turning its expertise inward. His team used Web-based tools and a Lotus Notes database that automated the exploration process. The system included a checklist of "universal criteria" that 50 different departments could use to forecast the impact of an early release, to spot the risks and benefits, and to flag potential "showstoppers" - problems that could bring the project to its knees.

In two weeks, Cullen's team consolidated thousands of pieces of information from employees all around the world - all the feedback and follow-up that top management needed to approve an early release. "It was really amazing," Cullen says. "Then again, it's how we do things around here."

Lots of companies compete by selling cutting-edge technology. And lots of companies use cutting-edge technology to make the products they sell. But few companies have pushed as hard as PeopleSoft has to devise new ideas for competing, new models of working, and new ways of using cutting-edge technology to turn those ideas and models into reality. "We're creating a 'virtual' PeopleSoft," declares Steve Zarate, 51, the company's chief information officer. "We're creating an organization that exists not in a specific place, but wherever its people are. We're on the leading edge of what will become commonplace."

PeopleSoft is certainly on the leading edge of the marketplace. It was founded in 1987, went public in 1992, and already commands a stock-market value of more than $10 billion. It is a powerful force in one of the technology field's hottest sectors: enterprise resource planning (ERP) software. As recently as 1994, the company had 650 employees. But it added 2,000 employees in 1997 and expects to add another 3,000 this year. Put simply, PeopleSoft is one of the most successful young companies in the world.

But don't get the wrong idea. Walk the halls of PeopleSoft's campus in Pleasanton, California, 30 miles east of San Francisco, and you sense that this is no collection of humorless code warriors and maladjusted geeks. This is a company that's serious about its values - and one of its most serious values is fun. Employees call themselves "People People" - and act like the luckiest people in the world. There's even a house band, the Raving Daves, which was initially funded, and is still occasionally fronted, by guitarist Dave Duffield, PeopleSoft's president, chairman, and CEO.

Duffield, 57, is PeopleSoft personified. He has silver hair, a healthy tan, a permanent twinkle in his eyes. He likes to compare PeopleSoft to a cougar: "We're fast, nimble, and competitive, but we have a cuddly way about us. I don't let bad behavior enter the place. And if it sneaks in, I get rid of it."

Anyone, Anytime, Anywhere

To appreciate the people-centered role of technology at PeopleSoft, don't start with the company's intranet or its Lotus Notes databases. Start instead with a blue-and-black backpack - the first "hardware" that new employees receive. It's a stylish piece of gear with room for a laptop, a pager, a cell-phone, and a personal digital assistant - tools that are part of life at the company. "It's information-to-go," says Zarate. "If you have power, you also have responsibilities. If you have responsibilities, you need tools to get things done. We provide those tools."

And they are power tools. New hires at PeopleSoft each receive the same laptop: a top-of-the-line model with a CD-ROM drive, a high-speed modem, and lots of performance enhancements. One purpose in giving everyone the same computer is to underscore the company's aversion to hierarchy. A more important purpose is to support its all-important global network. At PeopleSoft, a laptop isn't just a personal-productivity device. It's the point of entry into a massive information infrastructure that spans continents and time zones. "You can take your laptop to any of our offices anywhere in the world, plug it in, and the network recognizes you as if you were in your home office," Zarate says with obvious pride.

So in one way, every laptop at PeopleSoft is the same. But in another way, the laptops for each of a half-dozen groups - salespeople, developers, account managers - are unique, and always changing. According to each group's profile, computers get preloaded with access to the most relevant databases. Word-processing software comes with templates for the documents - memos, press releases, requisition forms - that each group is likely to create. Moreover, when updated software becomes available, it gets downloaded automatically the next time a user signs on. "It's so easy to get the information and applications you need that people just take it for granted," says Zarate. "It's embedded in how we do things."

Zarate has a nickname for this digital infrastructure. He calls it the PeopleBorg - after the alien race in "Star Trek" that shares a collective consciousness. The Borg "think as one and act as one," he says. "That's what we're trying to do here. You can be anywhere, at any time, and do what you need to do. We are one company, no matter where we are. Time and space are irrelevant."

Put People First

PeopleSoft's first commercial application, launched in 1989, automated human-resource functions for companies hungry to streamline their bureaucracies. Today PeopleSoft may be its own hungriest customer. Back in 1993, total head count was 362. The company now adds about that many people every six weeks - and expects its head count to reach nearly 7,500 by the end of 1998.

The hardest part about adding so many bodies, argues CEO Duffield, is maintaining your organizational identity. "Our true core competency is our culture," he says. "That's what attracts people and keeps them here. It also helps sell customers. Customers want to work with companies that are competent, trustworthy, and fun. Winners like winners."

Which is why so many of PeopleSoft's internal applications focus on the people factor: finding great employees, getting them up to speed quickly, providing the resources they need to do the job - all with a minimum of delay and paperwork.

For example, more and more job applicants are introduced to PeopleSoft electronically, through the company's Web site. A few mouse clicks produce job descriptions, experience requirements, and details on which offices are trying to fill which slots. Candidates apply electronically, filling out online forms and pasting their resumes into an onscreen window. The resumes then travel to an applicant database. The system automatically kicks out a postcard to confirm receipt of the application - although recruiters have often arranged an interview before the postcard arrives.

But the no-bureaucracy model really kicks in once people get hired. Successful applicants receive their job offers by overnight mail, along with an orientation package called Day One. That package includes a temporary-access password and an 800-number. That's all the information it takes to access PeopleSoft's automated enrollment system. In minutes - over the phone, with no human assistance - employees complete state and federal tax forms and the other "administrivia" associated with a new job. They also choose when they will attend an orientation class, at which they will use a Web-based application to select benefits. Their insurance data goes directly to PeopleSoft's carriers (electronically, of course). Employees use Web links to review and decide on mutual-fund options for their 401(k) accounts.

Employees also use automated systems to order equipment and supplies (through a Web link to Office Depot), and they even design their own business cards: An online order form lets them enter a title and select which phone numbers and addresses to list. The card then goes to the printer, "straight to plate."

"Nobody jumps out of bed in the morning and says, 'I want to go to work and fill out forms,' " says CIO Zarate. "We create systems that let people be brilliant rather than push paper."

CEO Duffield is even more direct: "When you get rid of the BS, it's amazing how much work you can get done."

"Everyone Should Know Everything"

PeopleSoft didn't need fancy technology to create its value system. Fun, egalitarianism, agility - these values tend to thrive in the fast-paced world of software startups. But the company has relied on technology to maintain those values while building a workforce of thousands that spans the globe.

PeopleSoft is using information systems to create what Zarate calls an "infomocracy" - a transparent organization that provides open access to information for all its members. "Everyone should know everything," he insists, "good news and bad news. PeopleSoft has a really strong democratic strain - a sense of equality. There's no hierarchy because everyone has access to everything."

He's not exaggerating. This is a company with some 400 major databases - few of which are off-limits to employees. For example, an automated sales-tracking system called SPIKE (Sales Productivity Intelligence Knowledge Engine) makes sure that all 500-plus members of PeopleSoft's North American sales and marketing teams have as much information as possible about prospective customers. With SPIKE, sales leads get assigned electronically, usually in an hour or less. The system also tracks each lead's progress through the sales cycle, from first contact to close, ensuring that the right team members are involved at the right time - and that they always have the latest information on each client.

The company also maintains a competitive database, which stores information on rivals such as Baan, SAP, and Oracle Corp. This database gets updated regularly with financial reports and news clips. It also features an area called the Sales Lounge, on which reps can post field notes about encounters with outsiders and report outside-the-company opinions on PeopleSoft products and services.

But perhaps the most significant source of group intelligence is a Lotus Notes application known simply as the Key Stuff database. It features information on all company projects: where they are in the development process, their technical documentation, the problems associated with them, and the like. "Any person in the company, at any time, can see any product's development status," says Row Henson, 49, vice president for product strategy in human-resources software. "Most software companies avoid letting people in the field - sales reps, account managers - see what's planned for future release until it's ready to be announced. We believe that these people ought to know - have to know - as much about what's going on as anybody does."

Duffield agrees. "What our competitors are doing shouldn't really affect our plans - or vice versa," he says. "If a competitor's strategy is right, it'll win. If our strategy is right, we'll win. We're not going to win or lose by keeping information secret."

Thus far, Duffield and his colleagues have been winning big. In the near term, he says, the company's biggest challenge is adding enough talent to keep growing as fast as the market demands. In the long term, the challenge is just to keep pushing - to stay hungry even after enjoying more success than anyone thought possible.

"We can't take ourselves too seriously," Duffield says. "We can't get caught up in our own success. You can never think you've 'made it.' The challenge isn't to keep your eye on big competitors. It's to pay attention to the innovators. We don't want the next PeopleSoft to sneak up on us."

Paul Roberts proberts@nwi.net is a frequent contributor to Fast Company. His most recent article was "Kinko's - The Free-Agent Home Office" (December:January 1998).

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