By AMA Staff
What makes a company great? According to Peter W. Schutz, former CEO of Porsche, it’s your people. “Motivated, passionate people make the difference between ho-hum mediocrity and extraordinary performance,” says Schutz, who is now a mentor for leaders from companies of all sizes.
In Schutz’s new book The Driving Force: Extraordinary Results with Ordinary People, he shares ten ways that leaders can maximize the talent of their managers and employees, including:
Remove the glass panes between people. Schutz recalls how a customer of Cummins Engine Company was experiencing frequent engine failures. Evidence suggested that the drivers were abusing engines, and that such abuse was occurring shortly after the vehicles left the company’s home terminal. When Cummins investigated, it discovered that the dispatchers, hidden safely behind a large glass pane, were taking their own sweet time compiling the drivers’ trip tickets. Furious about this seemingly deliberate foot-dragging, the drivers would storm out of the dispatch room and vent their frustrations on the trucks. The solution? The company removed the glass pane in the dispatch room. It totally transformed the relationship between drivers and dispatchers. “Often invisible barriers between people are the root cause of performance problems in business,” writes Schutz. “The driving force is stifled.”
Four of the most powerful words in the world are “I need your help.” Leo Brewer, a friend of Schutz, bought a Cummins distributorship in St. Louis, Missouri. He needed to make significant improvements, though, and was out of money. Together with Schutz, he cooked up a plan. He went back to the filthy and neglected facility, gathered his crew in the shop area, and told them that he, his wife and his children were coming in on Saturday morning to clean, and that anyone who wanted to do so could show up and pitch in. To make a long story short, they did. Then, the next weekend, they joined together to celebrate. “The camaraderie of those two weekends resulted in more than just a clean shop,” writes Schutz. “It established the basis of a new culture, a new relationship between management and labor and the company took off to new heights of performance.”
Company icons are powerful. Don’t underestimate that power. When Schutz joined Porsche in 1981, the company was planning to discontinue the Porsche 911. Although there were practical reasons to put it on the chopping block—it had an engine that could barely meet upcoming noise and emissions regulations—the decision was harming morale. Consequently, Schutz reversed his plan. “I remember rising from my chair, taking a black marker pen and extending the 911 program bar clean off the end of the chart….The Porsche 911, the company icon, had been saved, and I believe the company was saved with it.”
Don’t give your customers what they say they want. Instead, redefine customer expectations. Schutz observes that there was no customer demand for the transducer, the airplane, the automobile, the microwave even the Internet. No one asked Steve Jobs to invent the personal computer. “You must use your imagination and vision to decide what customer expectations are likely to be after change has occurred.” Schutz cites, as a prime example, the Porsche 911 Cabriolet. “Instead of responding to the customer request for a less costly and more trouble-free car, we built a convertible with a price approximately 10 percent higher than the contemporary coupe. Dealers and customers loved it.”
Pursue excellence, not success. Managers focused on success, particularly short-term success, will frequently fail to mobilize the real driving forcet—the committed passion of people that can result in extraordinary performance. Success must come quickly and may be fleeting and fickle. Those who are obsessed with success will often compromise their values and principles. On the other hand, excellence is lasting and dependable. Managers striving for excellence and quality tend to be patient because their focus is on the longer term. They lead with a quiet confidence because they know they will win in the long run.
Build credibility. This may require that you put yourself in a vulnerable position. Law mandates that a German AG must hold meetings with all its people several times each year. Schutz describes the meetings he had with the 8,500 employees of Porsche, during which anyone could ask any question. It was a way of ensuring that the CEO and any other member of management were accountable to employees. Schutz admits that at the first such meeting he was “scared out of my mind,” but he lauds these events as a great way to achieve credibility. “One way or another, managers must put themselves into a position where they are vulnerable,” he writes. “This cannot be done with a newsletter, video communication or bulletin board announcement.”
Decide like a democracy. Implement like a dictatorship. Most managers tend to do the opposite: they make decisions and then get stuck with democratic implementation. Obviously, trying to accommodate the diverse interests of many people in a competitive operating environment can be a disaster. Implementation is a time to do, not to talk. Therefore, says Schutz, you must include all relevant people and groups in the decision-making process, even if it takes months to produce a flawed decision. The reason is simple: a flawed decision that people support can be implemented quickly, while a high-quality dictatorial decision may end up not getting implemented at all.
Implement fundamentals like Vince Lombardi: make sure Tony understands. When Vince Lombardi would gather the team in the locker room to diagram plays on the blackboard, he would always make sure Tony—a large but not overly bright player—understood. If he got a blank look from Tony, he would scrap the play. “For Lombardi and his winning team,” writes Schutz, “it was all about fundamentals and flawless execution. If you do not have ‘Tony’ on board, understanding and supporting the decision, do not pull the trigger to initiate implementation.”
Make sure your people are building a temple for customers, not busting rocks for a living. It is not the activity that defines a job, but how people see their activity in the context of an organization’s culture and style that matters. If people are working together to build a temple, the hammers are not as heavy, the rocks are not as hard, and the days are not as long. It is no longer the same task. It is up to management to define the temple. If management cannot (or will not) communicate what sort of a temple the organization is building, the work ethic can easily become, “How can I bust fewer rocks for more money?”
Make sure your business culture is defined in large measure by what people must not do. Think about the Ten Commandments in the Bible. Only two of the ten actually command us to do anything. The other eight are prohibitions. Likewise, the documented culture of a business is most effective if it is about 80 percent prohibitions: Thou shalt nots. “The implications for leaders are clear: we must stop telling people what to do,” writes Schutz. “Instead make sure that they know what not to do and then allow them to proceed on that basis to apply their ingenuity and formulate solutions. It is the most effective way I have found to get people to use their ingenuity.”
About The Author(s)
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