ANALYSIS: Corporate Case Study - Fresh look at PR installsPeopleSoft's chance at revival

In 1999, the Y2K scare and the loss of key staff left PeopleSoft in utter disarray. The company is still recovering, and getting its PR affairs in order was the first major step toward a turnaround.

In 1999, the Y2K scare and the loss of key staff left PeopleSoft in utter disarray. The company is still recovering, and getting its PR affairs in order was the first major step toward a turnaround.

Back in 1999, it was hard for a company like PeopleSoft to get media or analyst attention amid the growing clamor of the dot-com carnival.

Without an adequate PR team in-house, it was virtually impossible.

PeopleSoft is an enterprise software company that provides applications for use in human resources and financial management. Last year, it added software for use in customer relationship management (CRM) and enterprise services automation.

When director of corporate PR Steve Swasey joined in 1999 after working in the consumer packaged goods sector, only three people staffed the PR team, reporting to a VP of marketing communications. Although the company retained a PR agency, Swasey says the relationship was not working out.

And PeopleSoft had bigger problems than just PR that year. Dave Duffield and Ken Morris founded the company in 1987, and its fortunes rose quickly.

PeopleSoft had its IPO in 1992, and gained ground internationally. Between 1994 and 1998, its earnings doubled each year. In an industry famous for fun and excess, the company became as well known for its casual dress code and party atmosphere as its products.

But in 1999, the company hit the wall. "We had, at that time, the PeopleSoft 'perfect storm,' explains Swasey. "First it was Y2K - the biggest non-story of the millennium. The fear among large companies making software purchases was that the Y2K bug would cause computer systems to grind to a halt when the calendar turned over to the year 2000.

As a result, these crucial customers put off their buying decisions and hurt the bottom lines of companies like PeopleSoft and Oracle. PeopleSoft had seen its stock price go from a high of $60 in April 1998 to a low of $11 the following year.

Another big problem was the change of leadership when Duffield resigned as CEO and became the company's president. CNET reported this was "no ordinary transition, but a sign that the company needed drastic changes in order to be profitable once again.

Craig Conway, formerly an executive at Oracle and OneTouch Systems, took on the job of CEO as the attrition rate in the company was reaching 27%.

Key senior managers and other staff were departing for internet jobs, so the company was experiencing a brain drain in a time of serious turmoil and doubt.

Rebuilding the brand with a PR overhaul

Taking a fresh look at the PR team was essential to revitalizing the brand. "We were a 12-year-old company, but we were still operating as a start-up, explains Kara Wilson, VP of corporate communications. "Most of the work was outsourced to the agency."

"It was a firehouse really in disarray, and yet there were raging fires at the door, agrees Swasey. He and Wilson set about staffing up the team, and by spring 2000, they had a full complement of 10 in-house PR staff - a level it maintains today. The VP of marketing and communications left the company, and that position was effectively divided in two. Nanci Caldwell, SVP and chief marketing officer, joined the company in 2001.

One strategy of the PR team was to gain Conway's confidence in spite of the fact the new CEO had major issues to manage. Swasey says he got Conway's attention by writing a profile of him and submitting it to Conway as a template for creating the "Craig Conway Story, which needed to be told both internally and externally to coordinate the company under its new leader. "Craig Conway leaves no doubt who is in charge of the next phase of PeopleSoft's growth, it reads, "or that the company's surge into e-business and internet applications will be anything less than successful."

Swasey says that early on, Conway made PR a priority, making himself available for media tours about twice a year. A new image of the company began to find itself into the pages of the business press beginning with the San Francisco Business Times, which ran a profile of Conway that literally juxtaposed a photograph of Duffield in his iconic Hawaiian shirt with Conway in a suit and tie.

The party ends, and business begins

The message was getting through - the party atmosphere was an anachronism.

"I want to maintain the culture, but ensure that the business climate is not casually focused, Conway was quoted as saying. A headline in Business 2.0 in February hinted at a slightly more severe tone. "Attention underlings, it read. "That's MISTER Conway to you, and I am NOT a people person! On the other hand, BusinessWeek put Conway in its 2002 list of top 25 managers.

Ultimately, the goal was to pave the way for the launch of PeopleSoft 8, a group of internet business applications for things like customer support, supplier management, and employee information that are entirely web-based. PeopleSoft 8 Customer Relationship Management (CRM) was launched in June 2001. The launch was done at the company's first annual Leadership Summit, which is an invitation-only networking and educational event for senior executives.

The PR team has also focused on developing the profiles of other key executives in the company. As Conway has become more high-profile, it is simply not possible for him to tackle every media project. Wilson says the PR department has established an aggressive strategy for its executive platform program, which involves drawing up specific goals for each key person at the beginning of each year to reach a certain number of industry audiences.

PeopleSoft's PR team retained a new PR agency in 1999, Phase Two Strategies, after cajoling firms to take an interest in the company. "It was very, very difficult getting the agencies to talk to us if we weren't offering equities and Craig Conway in the capabilities presentation, Swasey says.

While Phase Two added significant value to the brand overhaul, the company recently picked Porter Novelli in a protracted review that reflected an increasingly global focus. "Barring a conflict, we talked to the top five agencies in the world, Wilson says, adding that Porter Novelli has revitalized the PR team. "They are relentless, she says. "The amount of passion and energy they've shown is outstanding."

A key PR hire has been pending in the department for several months.

"I am currently interviewing for a global PR director, confirms Wilson.

While she says she has seen a great range of resumes and people, she has not yet found one that embodies the right mix of corporate sensibility and an agency-level sense of urgency.

Wilson says the PR team's focus in the next year is to continue to engage the business media in the solutions PeopleSoft offers companies, especially as it continues to eye competitors like Oracle and Siebel on the business pages.

But this company has not completed its turnaround just yet. In April, PeopleSoft's first-quarter results revealed that sales were down 13%, even as earnings for the quarter were up 28%. The PR team cannot afford to relax just yet.

SVP, chief marketing officer: Nanci Caldwell
VP, corporate communications: Kara Wilson
Director, corporate public relations: Steve Swasey
Director of industry public relations and analyst relations: Laurie
PR Agency: Porter Novelli
Budget: undisclosed

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