Peter Schutz, former CEO of Porsche A.G., assumed command of the company in the early 1980s while it was in the midst of its first money-losing crisis. During his tenure, Porsche’s worldwide sales grew from 28,000 units to over 53,000 units in 1986, more than doubling revenues. Prior to his arrival at Porsche, Schutz served fifteen years at Caterpillar Tractor Co., in a variety of engineering tasks, and eleven years at Cummins Engine Company, three in corporate strategic planning and eight years as vice president responsible for sales and service of truck engines. In 1987, Schutz’s alma mater, IIT, honored him with the Outstanding Achievement Award, and the Henry Townley Heald Award, given for business ethics that have impacted an industry. Schutz and his partner Sheila Harris-Schutz operate Harris & Schutz, Inc., a knowledge exchange company, and he has lectured on leadership and business management techniques in the United States, Europe, Australia and Asia, including over 400 presentations to TEC (The Executive Committee, a worldwide organization of CEOs,) and to business conferences, and strategic planning and sales meetings for a number of corporations. Peter Schutz is the author of the book, The Driving Force.
Leadership, The Driving Force: Extraordinary Results from Ordinary People
Most businesses today operate in a very competitive operating environment. In such circumstances, businesses are desperately striving for an edge on the competition. Such an edge will rarely consist of hiring the smartest accountant. A smart accountant is essential to a business, but it is the price of admission, without a smart accountant you cannot get into the game. Any advantage that is the result of invention or innovation will be fleeting and fickle. An advantage such as this will result in others climbing onto your bandwagon and the playing field will soon be leveled once again. A competitive advantage will rarely, if ever, consist of finding and hiring people who are more intelligent and innovative than those working for the competition. Such people are scarce. There is reason to believe that the only lasting competitive advantage that any business can have consists of getting extraordinary results with ordinary people. When leadership mobilizes The Driving Force and nurtures it, a business can achieve and maintain a lasting competitive edge. In this presentation, Schutz shares personal experiences as CEO of Porsche AG in the 1980s to achieve such a posture. The presentation is illustrated with references to Porsche racing activities in that period. The techniques presented have been applied successfully buy a number of modern management teams.
Repositioning: Getting Beyond a Commodity Business
“Our strength is in our diversity.” Many people agree with that, only the diversity that constitutes the strength of a business is not black-white, male-female, or any social diversity. Social diversity is an important subject, but it is not the diversity that is indispensable for a successful business. A successful business requires a diversity of perspective: short-term–long-term, material resources-human resources, etc. A business can lose vitality and become a commodity business. To be truly successful, such a business must excel at cost control, which usually means a company needs to be rather large to spread and absorb fixed costs. Outstanding profitability, particularly for a smaller business, depends on differentiated products and services. The elements needed for differentiation are frequently incompatible with those required in a commodity business. Recognizing and managing these differences is critical to success in a changing business environment. This presentation identifies four dimensions of diversity must be acknowledged and nurtured in order to avoid mismanagement.
Managing Risk: Business Structure for Innovation
Simple organizational structures will often our perform those that are complex. Many operating problems occur at interfaces between department. Based on these concepts, Peter Schutz illustrates the strengths, weaknesses, and pre-requisites of various organizational concepts. Functional structures feature centralized control and often excel in the short-term. They frequently limit attracting and holding outstanding people. Such structures are best suited to survival, start-ups, turnarounds, public offerings, and preparing a business for sale or seeking new financing. Others are more sophisticated. They are market-focused and proactive. Such organizational business structures can attract and hold outstanding people and motivate them to achieve outstanding results in a changing and challenging business environment. To be effective, such organizations require a basic understanding of market niches and require a culture that can manage delegation of authority. In this presentation Schutz shares experiences in building effective business structures.
Business Ethics: Corporate Accountability
A major challenge in business management is providing accountability. This requires a set of values and an appropriate business structure. It has to do with controlling the fundamental human propensity for corruption. Without rules of conduct that are more important than any one person, there can be no effective civilization. Without rules man often reverts to an uncivilized animal; civilization and business are not possible. People tend to focus on reward and punishment rather than basic business strategy. A number of disturbing business corruption incidents have surfaced in the past two decades. It is likely that a root cause of these problems is a lack of accountability on the part of business managers. This trend can be controlled and reversed. For those committed to abide by the ancient framework or moral rules and values, even if driven by the reward and punishment framework, moral accountability is frequently adequate. More accountability is not burdened by the need to protect the innocent; it is an internal process administered by the harshest judge that exists for such moral people. They become their own judge and jury. The legal framework of laws has been circumvented and abused. In the U.S., CEOs frequently also chair the board of directors, and are in a position to control board membership. Employees are rarely represented with a seat on the board, and are rarely given an opportunity to ask questions that represent the employee agenda or concern in a forum where management is obligated to respond promptly. In these circumstances authority can be abused and corruption results. Accountability rooted in business structure and ethics can be part of the solution.
Managing Interpersonal Relations
The ability for people in a business to relate to others is a key requirement for business success. Even if diversity is managed well, business is organized properly, and innovation abounds, the inability to interact with others will limit the ability of an organization to perform. Effective interpersonal relations begins with the ability of people to understand themselves and the impact their behavior has on those around them. This presentation introduces the impact of tension on behavior, and the four social styles that translate feeling and thinking into behavior patterns. Awareness of these factors is a key to effective interpersonal relations and communication. Due to considerable of amount of desirable personal interaction, this presentation is not suited for meetings of over 25 people.
PETER SCHUTZ BOOKS:
Peter W. Schutz (retired CEO of Porsche AG Worldwide) & Sheila Harris formed Harris & Schutz, Inc. in 1991 to facilitate the exchange of knowledge between Peter and business people all over the world. Peter’s background in engineering–coupled with his experience in marketing and management– gives him a unique perspective on business today.
Born in Berlin, Germany in 1930, Peter moved to Chicago when he was 11 years old. Several years later, Peter attended the Illinois Institute of Technology. Caterpillar Tractor in Peoria, Illinois was his workplace for 15 years, serving in various engineering positions. Peter also ran a flying school and taught engineering at Bradley University in Peoria. He then spent 11 years at Cummins
Engine Company, Inc: 3 years in corporate strategic planning and 8 years as Vice President responsible for sales and services of truck engines in the United States and Canada .
1978 brought a move to Cologne, Germany where Peter assumed responsibility for the Deutz Engine Division of Kloeckner-Humboldt-Deutz, AG. This included engineering, manufacturing, and world-wide sales and service. Revenues grew to exceed DM 1 billion per year.
While in Germany, he accepted the job as CEO of Porsche AG, based in Stuttgart. Porsche was in the midst of its first money-losing year in 1980. During the Schutz tenure, Porsche worldwide sales grew from 28,000 units in 1980/81 to a peak of 53,000 units in 1986. Revenues went from DM 850 million to over DM 3.7 billion.
Peter received the “Outstanding Achievement Award” from his Alma Mater, the Illinois Institute of Technology in 1983, and was honored with the “Henry Heald Award” in 1987. This award is given to honor those who have exemplified exceptional ethics and business practices in their field. Other recipients of this award include: Mees van der Rohe, Edward Teller, Ted Turner, Bill Hewlitt, Buckminster Fuller and Jonas Salk.
His appearances include association conventions and conferences as well as in- company consulting and seminars. He speaks at a variety of meetings including sales, strategic planning and team-building as well. The Executive Committee, an organization of CEOs, named Peter “Resource of the Year” in 1985. (Peter has spoken to more than 400 TEC meetings world-wide.)