Former Porsche CEO: How to Rev up Workers

The man who turned Porsche around in the 1980s talks about how to make your employees passionate about their jobs. The people, he says, are the real driving force behind every success.
Posted November 30, 2005

Sharon Gaudin

It's the people, Stupid.

That's the basic message one business leader is trying to get across to managers. You can be running the best technology and coming up with top-notch marketing plans, but if your workers aren't passionate about what you're doing, you're just spinning your wheels.

And this is one man who has put his own philosophy to the test.

Peter Schutz joined Porsche AG as its CEO back in 1980 when the high-end auto maker was struggling. Porsche had been losing money for years when Schutz arrived, leaving him the daunting prospect of turning the company around in a small window of time. And by revving up the company's employees, that's exactly what he did.

During the eight years that Schutz was leading Porsche, he got employees excited about their jobs -- not just the top designers or engineers, either. In an interview with Datamation, Schutz says he saw his job as getting every single employee excited about what they needed to do at Porsche.

And it worked. Schutz says when he left the company, Porsche had no debt and was earning about $150 million a year after taxes. Schutz also says the same rules apply whether you're managing an entire international company or if you're leading an IT department.

Here Schutz, who just authored The Driving Force: Extraordinary Results with Ordinary People, talks about how the people make a successful business, how to make workers passionate about their jobs, and the mistakes that managers tend to make.

Q: In your book, you say it's the people and not the business. What exactly do you mean?
Yogi Berra, who is my favorite philosopher, says baseball is about 50 percent about fielding and pitching, and 90 percent about people. It's the same with business. It's the people in the business. And even more importantly, it's the customers. They're our only source of revenue.

Q: Do you find that most business or IT managers understand this point?
I always hope so, but I don't think so. I've spent my time for the last 10 years trying to communicate that message to managers. I hope that some of them are getting it, but it's tough. If you're running a business that's owned by people who have no interest except what they can walk away with, then it's difficult to get through to them. If the customers are not doing business with you, then you really aren't going to be successful.

Q: What about the employees?
Without the employees the technology will not get implemented in a useful way. If your employees are not buying into the technology and the whole marketing concept, then it's difficult to make the business profitable. And it's not all about the super stars. They cannot perform if they don't have a supporting cast of ordinary people who do extraordinary things. The whole thing to making a business succeed is making ordinary people so enthused and have so much passion about what you're trying to do that they will end up yielding extraordinary results... I was watching a game last night... It's a bunch of ordinary people committed and playing with more passion than the other team can match.

Q: How do you make employees passionate about their jobs?
There was a construction site with three men doing the same thing. A passerby stopped and asked the first man, 'What are you doing here?' 'I am busting rocks.' he answered. The passerby asks the second one, 'What are you doing here?' And remember that he's doing the same thing. But this time the answer is, 'I'm earning my living.' If people believe they are busting rocks to earn a living and they put their heads together to figure out how to make this a better job, chances are they'll cook up a plan to bust fewer rocks to make more money. In business school, they teach you to get them to bust more rocks for less money. This all doesn't make sense. The passerby asks the third man, 'What are you doing here?' He answers, 'I am helping my colleagues build a temple.'
People working together toward a shared objective will outperform people who are busting rocks every time. For whom are we going to build a temple? For our customers. Not for the managers. Not for the owners or shareholders, but for the customers. If you get an organization of people doing that, then I have found you have a huge success. You will have a bunch of ordinary people doing extraordinary things.

Q: So what did you do when you got to Porsche?
In 1981, I suggested we go and win the big 24-hour race in Le Mans, France. That united the whole company. When Porsche hired me, the problem was we had people who knew how to design cars, people who knew how to build cars and people who knew how to sell cars. They didn't work together. They were all fighting. I needed to get all these people on the same page. Getting them on the same page turned out to be getting them to win that 24-hour race. Almost overnight people were working together to build the temple. They suddenly had the same objective. We won that race big time and we never looked back. They got the idea that once we work together we could do anything we wanted to do. Suddenly everything was possible.
A similar thing happened to our country when Jack Kennedy said, 'Let's go to the moon.' Suddenly, the whole country had an objective. Our best and brightest youngsters decided to study engineering because they wanted to be part of it. In a negative sense, that's what happened when the Japanese bombed Pearl Harbor. It united people.

Q: What are the mistakes that managers tend to make?
One huge mistake is to focus on making money instead of trying to build a temple for the customer. Many people work on the cost side of the business instead of the benefit side. If your biggest objective is to reduce your costs, it's unlikely you'll get an organization of people inspired and excited about that. Instead, if you say we're going to find a cure for cancer, then people will be excited.

Q: But if a company is making widgets or software, there's no big auto race or fight against cancer. How do you get IT workers excited then?
Watch Steve Jobs and what happened with Macintosh and now it's the iPod. The people who work on projects like that develop a passion and you can see the results.

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