People: The Only Sustainable Advantage

Sept. 11, 2007
Plan like a democracy, but implement like a dictatorship.

With a presentation sprinkled with humor, real-life examples and just plain common sense, Peter Schutz, former CEO of Porsche A.G., spoke to a capacity crowd during the first-ever management roundtable offered at the Emerson Global Users Exchange. Schutz currently lectures on leadership and business management techniques worldwide. He is author of The Driving Force, which also is available as a video.

“Plan like a democracy, but implement like a dictatorship.” Peter Schutz, diesel engineer turned CEO of Porsche A.G., offered his take of on the keys to business success.
"My formal training is as an engineer," he explained. "My favorite philosopher is Yogi Berra, who said, 'you can observe a lot if you just watch."

In the early days of business, a handshake was a contract. Then, administration was invented, which later spawned a whole new establishment called the business school, Schutz quipped. The companies that created centralized approaches to business administration first had competitive advantage. That was when computers were the size of an entire room, and only large companies could afford them. But since that time, a lot has changed. Computers are inexpensive, small and everyone has them.

"Administrative excellence will not be a competitive advantage in our future," he said. However, if you don't have an administrative excellence, you don't stand a chance. "It's the price of admission."

To gain competitive advantage in today's business world "you need to learn how to get extraordinary results out of basically ordinary people," Schutz said. Every company has its superstars, but they need everyone else's support to succeed. "If you fail to provide your superstars with a supporting cast of enthusiastic and motivated people, you will lose them and be left to clean up the mess," he warns.

He likens the job of leading people to that of being a parent. "If you can find a correlation between their [your children’s] dreams and what you’re asking them to do, they will be motivated. But at other times, they need discipline," he said. Not only do you need to be like a parent, but you must also be a good communicator, an accountant and lawyer, he added. “When unexpected situations arise, you are expected to deal with them.”

"When we manage, when we lead an organization, we must make plans and then implement them," say Schutz. "Implementation is the hard part."

The time to get consensus—everyone’s buy-in—is during the planning, Schutz recommended. “Plan like a democracy, but implement like a dictatorship,” he said, likening successful execution to the coordinated actions of a racing pit crew or football team. ”When it’s race day, you race. It is the flawless implementation of the fundamentals that will be key to your success.”