Putting people at the heart of strategy to drive success

Porsche Holding Salzburg maintains its position as the number one automotive distributor in Europe

By Kathy Brewis 28 March 2019

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If you don’t develop people, how can you expect your business to grow?” asks Paul Gahleitner, Chief HR Officer at Porsche Holding Salzburg (PHS). “People drive business. It doesn’t happen by itself and it demands focus and planning. That’s why we invest a lot of money in talent development – because it’s the people who make the difference.”

PHS is the number one automotive company in Europe, with a long and prestigious history – founded in 1947 by the daughter and son of the legendary Ferdinand Porsche. “These family roots matter,” says Gahleitner. “We are all proud to be part of Porsche.” Now a 100% subsidiary of Volkswagen Group, PHS represents the latter’s brands in wholesale imports, retail (through dealerships, including financing) and after-sales service, including the development of IT solutions for the business.

It’s an intensely competitive sector. “It’s tough to remain a market leader,” says Gahleitner. “When you’re number one, everybody wants to bring you down and you have to fight to defend and extend your market. You need people who are keen to develop themselves and really collaborate with the company to personally progress, which in turn makes the business grow.” Beyond this, he says, the younger generation expect personal development: “They demand that. If you don’t offer it, they will happily go elsewhere.”


The people-performance synergy


PHS operates in 27 countries worldwide, including Colombia, Chile and China, and has a workforce of over 30,000, selling more than 789,800 new vehicles a year and generating a turnover of €22.4 billion (£ 19.46 billion). Gahleitner attributes its success to the unique company culture: “What Porsche offers is a great synergy between performance orientation and people orientation.

Goals and performance are central throughout our business; people want to win and they want to be the best. At the same time, we remain very people-focused. People matter.”

This deeply rooted ethos finds expression in a range of talent development programmes within the business, culminating in Highline. This unique and highly experiential talent development programme, co-created with London Business School (LBS), both prepares and stretches the high-potential leaders so that each is ready for the next step. As the automotive industry shifts gear from car ownership to mobility, more than ever, PHS needs leaders who can keep the company in pole position in any circumstances.

“The biggest challenge – and also the most interesting – is that we don’t know who our future competitors are going to be. Google? Amazon? What is clear is that we will have to adapt very early to situations that, right now, we cannot imagine. We are right in the middle of radical and exciting change,” Gahleitner says.

In the near future, he suggests, PHS will still repair cars but its customers might not own them. Some will want to buy their vehicles online rather than from the traditional dealership and many activities, such as financing, are already moving towards automation. “So we might need a robotics trainer, an electric vehicle repairer – something you don’t readily find on the market today – and we need people to develop new business models.”


Futureproofing leadership


For the past few years Gahleitner has made sure that future leaders develop their ability to change direction quickly and are comfortable taking confident action in an ever-faster moving context. PHS has a strong tradition of developing existing staff rather than bringing in external expertise. The higher you look in the company, the fewer the number of external hires you’ll find. “We attract academically talented students for internships and traineeships and we send them around the world so they can learn fast,” says Gahleitner. All three PHS CEOs started as trainees – inspirational examples to those just starting out: “One of our cultural foundations is having long-lasting relationships with our employees and our managers. When people start at the bottom, they learn the detail of the business and they understand our culture. Yes, we could buy in new competencies from outside PHS but the better strategy for us is to develop our own people.”

‘It’s not enough to be interested passengers. We want drivers in the driving seat’

Human Resources therefore has a central part to play. Gahleitner sees his role as preparing employees for tasks that do not exist yet. The emphasis is on orchestrating the right blend of select strengths, rather than traditionally packaged competencies and skills: “We need strong leaders who can consistently deliver a clear vision. People who are able to be active during change. It’s not enough to be interested passengers. We want drivers in the driving seat.”

Enter the Highline programme – now in its 15th year. “We don’t run any standard leadership programmes,” Gahleitner explains. “The Highline programme is unique to us. It’s individualised and customised to our business model and exactly to our company needs. The goal is to shape leadership identities, which has a great impact on the organisation. New approaches, new angles – that’s what they take away from the programme and that’s what has an impact on the business.

“We are preparing leaders for their next responsibilities, on the next level. We challenge them personally and professionally and they emerge with completely new perspectives.”

Highline is one of five leadership development programmes at PHS. The others focus on enabling senior to mid-level managers as well as prospective leaders to be effective in their roles – giving them the tools for success. Highline, for those with the potential to become managing director of a country or region, sets out to spark new ways of thinking.

Participants from all over the world join the practical as well as immersive, five-module programme. They explore topics such as sustainability, digitalisation and ethics with top LBS faculty. Highline builds in dedicated time and space for participants to challenge and reflect on their personality and leadership qualities. They are also thrown into unfamiliar contexts: “We open participants’ minds through personal discovery and unforgettable experiences,” says Gahleitner. These include spending time with start-ups in Tel Aviv and in the pits at the Silverstone racetrack. They learn first-hand about innovation, complexity and dealing with conflict. It is a long way from their day-to-day – and that is the point: “Being in circumstances where you don’t feel comfortable, being thrown into an entirely new context – that really has an effect on people. What they learn stays with them throughout their careers.”

One of Gahleitner’s favourite features of Highline is that participants work on group experiments throughout the programme and present the experimental results and experiences to the board at the end and at an internal innovation event. It says everything about PHS that, from the beginning of the programme, its board members already know each participant by name. To assess Highline’s impact, says Gahleitner, simply look at what participants go on to do: “Our CEOs, our general managers – almost all of them have been through Highline. They have forged their careers here and the business is doing very well. That’s the greatest measure of success – when you see people simply doing a great job.”

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