Here Comes Attack Of The Killer Software

How's this as an incentive to keep your eye on the ball: Imagine you're a manager who has ordered a product from an outside supplier. The order fails to arrive on time, but no one has explained to senior management why it will be late, so a software program shuts down all of the computer systems in purchasing. To get them back up, you have to contact the supplier, gain a new commitment for delivery, and report the news to your chief financial officer.

It sounds downright Orwellian. But such scenes are enacted monthly at T. J. Rodgers' Cypress Semiconductor Corp. "Killer software," as Rodgers calls it, is based on a simple insight: An ordinary computer program can be a dramatic productivity-enhancing tool. But so can the threat that it might be turned off. To call attention to boo-boos as varied as a late order or forgotten inventory, Rodgers invented the equivalent of electronic bloodhounds. They scan, for example, computerized purchase orders to sniff out delivery dates that haven't been met, and then magnify the minor problem by shutting off critical software until the problem is solved.

'DEATHLY AFRAID.' To outsiders, it may seem a draconian, even self-destructive solution. But Rodgers says the benefits gained from increased productivity outweigh the costs of an occasional shutdown. "It draws everyone's attention," he says. "They say: 'What happened, and how can we make it never happen again?' " The killer software is a critical tool for a business so complicated that minor slip-ups can spread like spilled marbles. And managers from other companies, including Hewlett-Packard and Alcoa, have begun experimenting with Cypress' techniques.

The idea was born nearly three years ago, when managers found 500-day-old parts languishing in inventory. The company started tracking parts electronically and created a software routine that would shut down the inventory system if parts sat more than 200 days. Then Cypress gradually cranked up the timing, until the limit reached just 10 days.

Killer software is proliferating at Cypress. A finance-department version works in reverse, automatically restoring credit to customers put on the credit-risk list if their status is not reviewed within six months. "The finance guys are deathly afraid of that one," says Rick Foreman, director of strategic systems and administration.

One of the company's most rigid systems isn't designed to zap laggards but to give employees more autonomy. Called the "goal system," it is a project-tracking setup that helps people organize their work and lets top management monitor the output of some 11,000 people--every employee except factory workers and laborers. The idea is to let them set their own goals and deadlines, and to intervene only when goals are not being met.

Rodgers designed the system himself over the years, from a chalkboard to its current form on a network of computers. On each line of a spreadsheet, employees list all their current tasks or goals, along with codes that identify such things as the date a project was started, the original due date, and a revised due date if it slips behind schedule. The updated lists are loaded into a central data base weekly and sent up the ranks to managers and vice-presidents. Every Wednesday, Rodgers himself gets a dozen printouts listing such things as the status of his pet projects and the names of managers whose subordinates have a high number of delinquent goals.

Does all this actually work? Cypress wouldn't be Cypress if it didn't have software to measure the results. In the first year after the company installed killer programs, for example, Cypress' record for on-time shipments to customers rose from 65% to 90%. And managers say the goal system improves morale, since people always get credit for what they have done.

Other companies are taking heed. Since writing about the idea in the Harvard Business Review last year, Rodgers has received written requests for details from managers at some 50 companies. After visiting Cypress, D. Fred Stewart, an Alcoa engineering director, started a pilot modeled after the goal system. "I was impressed by the enthusiasm of the people there," he says. "They're really focused on getting things done." Small wonder, with those electronic bloodhounds at their heels.

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