This deck retraces the story of Porsche and their journey of operational excellence and innovation. This is a model of successful change, that most Executives, now facing the challenge of digital, should learn from.

1. How the story of Porsche can inform our
approach to digital leadership
Philippe Guenet | 2018

2. “In the beginning I looked around and
could not find the car I dreamed of. So I
decided to build it myself."
Ferry Porsche
@HenkoPhil 2

3. Introduction
@HenkoPhil 3
Last year, I looked around and found that the
IT consulting industry was increasingly failing
its purpose. So, we decided to build a new
“Coachultancy”.
Henko

4. Warning notice:
I am not advocating a carbon copy of
manufacturing into IT. This deck also explains
the differences.
Decades of lessons learnt from Lean are
worthwhile to understand however. In
particular, the leadership and change
elements share much similarity with
managing digital change and making agile
work in the enterprise.
@HenkoPhil 4

5. @HenkoPhil 5
Image source: www.supplychaindigital.com
@ the source, Toyota Production System

6. Toyota was born
with TPS
@HenkoPhil 6
§ Just-in-Time
§ Production levelling
§ Jidoka
§ Kaizen
§ Gemba
§ Culture

7. @HenkoPhil 7
Image source: www.historics.co.uk
Porsche, however, had to transform

8. @HenkoPhil 8
Porsche, back in the early 90s
70% drop in sales between
1986 and 1993
Ranked <#30 for quality
High production costs
Losses of €214m
over 3 years

9. Short of answers, lots of excuses
@HenkoPhil 9
“Global
Economic Crisis”
Then CEO
911 – 944 – 928
No common parts and
high production costs
Lack of strategic approach
Comfort vs Sportiness
leading to client confusion

10. @HenkoPhil 10
Image source: Porsche Consulting, Porsche AG
New CEO – We must fix production first!

11. “A terrible
Plant, but
there is hope”
Chihiro Nakao
@HenkoPhil 11
Processes
Reduce inventory, bottlenecks
Products
Rationalise variants, and
unnecessary functions
Organisation
System of work, responsibilities,
leverage capabilities

12. Kein Geld, Kein Raum, Kein Volk
@HenkoPhil 12
The biggest change was cultural and
needn’t cost money, but required strong
leadership

13. Production recovery by continuous
improvements
@HenkoPhil 13
Image source: Porsche Consulting, Porsche AG
73% less time
to assemble a
911

14. @HenkoPhil 14
Image source: Porsche AG
50 years of architecture evolution

15. @HenkoPhil 15
Image source: Porsche Consulting, Porsche AG
JIT / True single piece flow production line

16. Production enabling product development
@HenkoPhil 16
928
944/968
911
Boxster
Cayenne
Cayman
Panamera
Macan
1995 2000 2005 2010 2015
14%
10%
32%
8%
36%
88k cars 225k cars19k cars
% Global mix

17. @HenkoPhil 17
Image source: Porsche AG
All purposeful drivers’ cars
Strong differentiation on the outside
Standardisation beneath

18. @HenkoPhil 18
Matrixed organisation
Product alignment + differentiators

19. @HenkoPhil 19
Image source: Porsche AG
Results: Most profitable car maker in the world

20. @HenkoPhil 20
Image source: Porsche AG
And getting ready to take on the future

21. @HenkoPhil 21
Image source: Porsche AG
§ Driver focus
§ Performance
§ Modernity
§ Responsibility
§ Production Flexibility
And getting ready to take on the future

22. What shall we learn for Digital IT?
@HenkoPhil 22

23. Porsche did not only survive by fixing
production. This was only the first step
of the journey. Production enabled
innovation again.
@HenkoPhil 23

24. Fix Production
@HenkoPhil 24
Innovate
Continuously
Improve
Operational
Excellence
Product
Innovation

25. “Efficiencies enable innovation”
Simon Wardley’s Climatic patterns
@HenkoPhil 25

26. What would this look like in IT?
@HenkoPhil 26
Optimise Automate Innovate
Instability leads
to unplanned
work. Too
much running
stops change /
build /
innovation.
Evolution is a
virtue of
competition.
Continuous
improvements
should become
structural.
Change needs
purpose and
outcomes.
Automation of
operations is an
obvious initial
goal.
Efficiencies
unleash capacity
on new order
items &
technologies
using continuous
experimentation.
Stabilise
continuously

27. § Past Lean successes were
a result of scarcity
§ Leadership had to roll-up
their sleeves
§ Gemba, walk-the-talk,
think systemically,
develop people
Leverage Leadership
@HenkoPhil 27

28. Leverage Leadership in agile too!
@HenkoPhil 28
§ Scaffolding is never meant
to be a permanent part of
the structure.
§ Why are we embedding
Agile coaches?
§ Leadership is the coach!

29. Warning:
Beware of the
different IT beast!
@HenkoPhil 29

30. In digital, innovation,
product development
and production are
structurally interwoven
@HenkoPhil 30

31. Digital IT is much HARDER!
@HenkoPhil 31
§ Handling variability
§ Innovation meshed with
excellence
§ Disruptive business models
§ Global competition
§ Talents
Queuetime
Utilisation
High variability
environment
à Team
Autonomy
Theory of Constraints
Low variability
environment
à Six Sigma

32. Digital IT is much EASIER!
@HenkoPhil 32
§ Virtual is easier to deliver
incrementally
§ Easier to experiment
§ Minor defects are OK
§ Knowledge work
intrinsically motivating

33. The System of Work delivers the digital
differentiation
@HenkoPhil 33
§ Systemic Management
§ Skills development (engineering) as a culture
§ Adaptive organisation towards flow
§ Change owned by the leadership
Success emerges from making this cohesive mix work
and continuously adapt & improve

34. Considerations for organisation and flow
@HenkoPhil 34
Traditional organisation,
functional alignment for
economies of scale
Product/Service alignment
designed for faster response
and economies of flow
Spotify model
Distributed organisation
Wardley PST model. Aligned to
the ways of working defined by
the strategic maturity.
Gartner Bi-modal IT
Hybrid mix between systems of
engagement and systems of records
Acquisition Servicing B2C Partners
Enterprise functions
Procurement Procurement Procurement
Web Apps Web Apps Web Apps
Finances HR + L&D
ERP / HR systems
APIS
APIS
APIS
Security
Security Security Security
Sales
Content
Marketing
Partnerships
Servicing
Content
Upsales
Marketing / Loyalty
PR & Comms
ERP / HR systems
Hiring Hiring Hiring
Config / Inventory Core Systems
Data / BI
B2B systems & Apps
Content
Special services
Config / Inventory
Physical digital points
Business IT Supporting
functions
Web Apps
SSO
Content
Service
Sales
Marketing
Core
Systems
Data / BI
B2Bsystems
Config
Inventory
ERP / HRPartners
Customer bookings
Customers Servicing
Loyalty
Marketing
B2B
Partnerships
Finances
PR & Comms
HR + L&D + Hiring
Security
Procurement
Productteamtransitioningchange
DevOps change
Programmes

35. Vision supporting the Change
@HenkoPhil 35
PurposeStrategyOutcomesChange
Cascade strategic intent
Elevate continuous improvements

36. @HenkoPhil 36
Leadership should
own the change
Develop the
autonomy of
leaders and teams
to operate faster
Keep focus on
business outcomes
Systemic
management to take
the teams on the
journey
Leadership drives the digital alchemy

37. The hardest leadership challenge is to
Own your change during good times.
For those who wait until bad times, for every Porsche story, there
are many more Blockbuster and Kodak stories…
@HenkoPhil 37

38. Please join our industry knowledge
development sessions at:
Digital Leadership
http://www.meetup.com/DigitalLeadership
https://digital-lead.slack.com/
Philippe Guenet
Digital change leadership
pguenet@henko.co.uk
+44 (0) 7798 623 007
@HenkoPhil