By January 28, 2009 2 Comments Read More →

Porsche’s Lean Culture and Leadership?

Europe businessman of the year: Wendelin Wiedeking – Jan. 27, 2009:

It’s nice to see Lean get such glowing praise in a mainstream publication like FORTUNE. The Porsche CEO was named businessman of the year for Europe. Part of their story highlights Lean:

Porsche was also hampered by antiquated production methods. Some 20% of its parts were delivered three or more days too late, for example. Wiedeking, who had been deeply impressed by what he’d seen on visits to Japanese auto firms, believed that only a radical, “lean manufacturing” cure would save the company. He flew in teams of the same Japanese consultants who had helped Toyota and gave them free rein. “A cultural revolution from top to bottom” is the way he describes what happened next, as the consultants organized the workforce into teams and one by one eliminated poor practices. Wiedeking made one now-fabled appearance on the assembly line wielding a circular saw, which he used to cut down the roof-high racks of spare parts that towered over the production line.

It’s too bad the same “top to bottom” transformation didn’t occur at other automakers, in addition to factory floor improvements that have been made in the factories of the “Detroit Three.” Who was given “free rein” to fix Ford? The mullet man?? The GM factory I worked in had plenty of internal consultants hired in from Japanese companies, yet they were told to sit in the corner of the mezzanine, doing nothing.

Porsche has an engineer as leader, as opposed to being run by a finance guy:

Wiedeking likes to think of himself as a man of the people – he regularly walks through the assembly line at the Stuttgart factory and tools around potato fields near his home in a vintage Porsche tractor. That folksy image has been tarnished recently by disclosures about his salary: Last year he made $100 million, sparking an outcry in Germany. He’s unapologetic, saying he earned it.

OK, so the compensation part isn’t Toyota-like, but walking the “gemba” is a good Lean management practice.

Part of the culture he’s trying to instill is quite a contrast to a yes-man, bad-news-never-reaches-the-top culture that you see in many organizations:

Such attention to detail is an important part of Wiedeking’s management style, as is his willingness to seek dissenting opinions. Indeed, he encourages his managers to air their disagreements in full, so that he can make well-informed decisions. When it comes to pricing new models, for example, he doesn’t want to hear just the suggestions of his sales executives. So he regularly charges his strategic planning team to come up with their own proposals – and then lets the two sides slug it out. “I provoke internal discussions,” he says. “I want managers to put forward their position, to fight for decisions. Sometimes there’s a bust-up, not just between me and them but with one another.”

Maybe Wiedeking is ready for a new challenge after 16 years at Porsche… say, maybe, CEO of General Motors? Who has worked with or around Porsche? Does this glowing executive profile fit with reality?

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Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an eBook titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

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2 Comments on "Porsche’s Lean Culture and Leadership?"

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  1. tonyj says:

    Hear, hear! It indeed sounds like the man has earned his pay.

    I didn’t recognize the “walking the Gemba” concept, having been inculcated in earlier years to “management by walking around”. (My grasp of Japanese is lousy, which seems to disqualify me from many Lean conversations).

    I could rattle off a few old style management terms that correspond with your “dissenting opinions” comment, but instead I would like to offer the metaphor that is running rampant today – “Team of Rivals.” That comes from a challenging position that would have been a significant move up, however the job was recently filled.;)

    Agree that Wiedeking would be a most promising candidate for GM CEO, but could he stand the pay cut and the strings attached to the bailout help that the government is likely to provide? (He might even have to sell off his private plane.;)

  2. Mark Graban says:

    Tonyj – thanks for the comment. I don’t mean to be exclusionary with the “gemba” term. I’m not big on using Japanese terms to excess. Gemba has been popular enough, but you’re right, I could say “shopfloor” or “workplace” instead of “gemba.”

    If you read Norman’s piece that I linked to, I think it becomes more clear how a gemba walk is different than MBWA.

    Many of his leadership concepts at Porsche aren’t exclusively “lean” but I think they fit. It’s better for problem-solving to have discussion and debate rather than people just strictly doing what the boss says.

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