PeopleSoft was a Great Brand
Recently I gave a workshop on branding for small tech businesses at the Entrepreneur Center in San Jose. In my talk I covered a couple case studies of great technology brands, one of which was directly from my own experience.
I represented PeopleSoft from 1994-98 during its hypergrowth heyday while at leading industry PR firm The Horn Group. For those readers new to the market, PeopleSoft was a client/server applications pioneer during the early/mid 90s that helped lead the drive to put more computing power on the Windows desktop. PeopleSoft debuted with human resources software and then expanded into Financials (GL, AP/AR…), Manufacturing, and finally CRM.
From my vantage point on the front lines of the early client/server marketplace, where bigger competitors like Oracle and SAP should have eaten PeopleSoft's lunch, I was able to directly observe the power of a great technology brand to clearly differentiate itself and reap the financial rewards. As with all great brands, PeopleSoft was fully actualized along functional, emotional, and aesthetic dimensions.
Functional: PeopleSoft had a great product. Its powerful, intuitive software made full use of Windows UI and was built from the ground up for client/server. It aligned its corporate mission with a larger trend - to leverage the PC revolution (that had hit consumers only five years earlier) and translate its benefits to the workplace. To compete against formidable enemies, PeopleSoft positioned itself as the alternative. Where SAP was the stiff, hierarchal German software that insisted customers reengineer their businesses to fit its model...PeopleSoft was the flexible, friendly software more easily customizable to the customer's business. Where SAP's implementation approach was an expensive, "Big Bang", multi-year process...PSFT stressed a speedier app-by-app rollout for more rapid return.
The psychographics of the initial human resources buyer matched PeopleSoft's own promoted style - relaxed, non-competititive, and willingly referenceable. HR was a low risk corner of the enterprise for IT to test this new-fangled client/server computing, and gave PeopleSoft a beachhead from which to upsell Finance and Manufacturing later. With a solid account management model, its rabid focus was customer satisfaction. The motto: “Positively Outrageous Customer Service.”
Emotional: PeopleSoft appealed to the user's desire for empowerment. Rather than rely on centralized IT for the information needed to do their jobs, line managers wanted to find out the answers for themselves. PeopleSoft didn't singlehandedly create the “knowledge worker” we know today, but tapped into its customers drive to work smarter. If brand is a reflection of alignment between internal organizational values and customer values, then PeopleSoft had it down.
PeopleSoft's internal culture reflected the laid-back, positive nature of its founder/CEO, Dave Dufflield. His organization was famously flat, light on policy, and hated politics. His employees themselves were empowered with his famous motto, “Don’t ask for permission, ask for forgiveness.” The company handbook said it all, “no bulls**t.”
Aesthetic: PeopleSoft's very name and visual language reflected and re-inforced its initial target market of HR. But it didn't stop there, understanding that every employee and the company's very offices were ambassadors of the brand. The "PeopleSoft Uniform" of khakis and a blue denim shirt (now a cliche in the Valley) were adopted shortly after The Gap signed on as an early customer. Dogs were allowed in PeopleSoft offices long before the dot-coms got all the press. Reception areas and hallways were decorated with large pictures of individual employees posing with their primary hobby or outside interest. A Wall of Fame framed letters from happy customers and users. The whole operation was a warm, inviting, living brand carrying PeopleSoft's mission and vision to the marketplace.
A Great Story. As the PR guy, I pushed this “cult of Dave” more than anyone. The media loved the story. How Dave mortgaged his home to start the company. How Dave answered his own phone and worked from a modest office (despite his shares being worth half a $B at the time). How the employee band was called “The Raving Daves” (Dave purchased their instruments; they played all company meetings). How Dave loved animals and supported the local SPCA. How PeopleSoft actually used its own software (you wouldn’t believe how rare this is). We even once PR’d the fact that the head of PeopleSoft's own HR department was not cutting his hair until the organization went completely paperless!
The Results? Well if anyone argues with me that strong brand equity doesn't translate to financial equity, I cite this case example. PSFT went public in 1992. The company’s CAGR was north of 100% for 5 years in a row, making them the fastest growing business software company in the U.S. By 1995, PeopleSoft had captured 77% share of the HR software market. That year, the company's market cap was $1.6B with a PE Ratio of 90+ (more than twice Microsoft at the time).
In overall client/server application market share, PeopleSoft was poised to overtake Oracle (which it eventually did). When Duffield handed over the reins to Chris Conway, the original brand eroded. PeopleSoft continued to successfully deposition Oracle as locked into and distracted by its own database business. Oracle had to acquire PSFT (at a 10% premium on its closing value) to finally silence this argument.
