Accelerated Excellence

– SILVER WINNER OF THE 2019 EXCELLENCE IN PRACTICE AWARDS –

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How do you – as a car manufacturer – influence your dealer network, ramp up customer satisfaction, improve sales and profits, and at the same time involve the dealers in paying the investments”? Questions Porsche AG was asking itself back in 2012. It was the year when it launched its lean management offensive for the retail network, then known as “Porsche Business Excellence (PBE)”. As a qualification vehicle for more performance in the markets, the “PBE International Dealer Academy” in collaboration with the University of St. Gallen should become one of its most effective levers.

The Future Already Now

In 2012, the Sales Network Qualification department of Porsche AG began to develop retail employees into Porsche AG Brand Ambassadors. With two key areas of focus: one product driven with a comprehensive and innovative blended learning on Porsche AG models; and the other focused on HR-development, providing state-of-the art tools and methods for all areas of the HR-cycle from recruiting through qualification to retention. This initiative was called “Porsche Business Excellence” (PBE1).

PBE – steered by Porsche AG headquarters – supports the retail network in developing new business segments while optimizing existing business areas. Established in all 19 Porsche AG markets, PBE reinforces over 850 Porsche Centres worldwide by continuously enhancing their performance and driving the retail business towards sustainable excellence. On its launch in 2012, its objectives translated as followed in the market:

a) Secure the model (then “Macan”) readiness of the global dealer network (e.g. new model line, new customers etc.). At the time, Porsche AG was selling around 162’000 units worldwide amounting to a total sales revenue of EUR 14.3 Billion and an EBIT of EUR 2.5 Billion.

b) Transmission of central Porsche AG strategy “Porsche Strategy 2018” and align with local dealer strategy

c) Support retail network in change management during the implementation process ‘hand-in-hand’ like partners.

In 2013, the PBE International Dealer Academy was established specifically to meet the challenges of the future dealership network and to implement “Strategy 2018”. Tailored to the requirements of Porsche AG dealers based on close cooperation with leading academic and automotive experts the Academy was set up to provide the General Managers with fresh ideas directed towards achieving excellence. This transfer of knowledge, skills and tools, designed to give the General Managers1 as well as their Porsche Centres that special competitive edge, would ultimately lead to a professional qualification awarded by the University of St. Gallen.

The retail executive education and professional development undertaking by Porsche AG is unusual as a corporate learning programme, in that the manufacturer is looking to qualify executives that are not on their own payroll. Hence, it was vital that the content carefully reflected the specific challenges and issues the participants faced in their dealerships.

A challenging journey

The St. Gallen/Porsche AG partnership began in 2012 with explicit and engaged sponsorship from the Board and the Head of Sales Network Qualification. Over the next year, the responsible “programme architects” Robert Fallbacher and Dr. Andreas Löhmer began ramping up their joint Training Needs Analysis and gave the pair time to understand each other’s modus operandi, building a personal as well as professional partnership driven by a shared enthusiasm to make theirs a truly impactful programme.

The outcome of months of extensive training needs analysis were twofold: on the one hand, Porsche AG and St. Gallen identified the core pain points of the Dealers in their respective markets and could therefore clearly address the respective content and build stable networks with the importer/ investor. On the other hand, the relationship between the two project managers who showed very different personality and working styles improved significantly to a strong friendship over time and close cooperation. The enduring success and impact of the programme is clearly shown by the fact that it is now embarking on a 7th Stream.

‘CAS’ for Porsche’s Retail Network

Tailored to the requirements of the Porsche Centers’ General Managers around the world, the two-year programme consists of three on-site learning weeks, taking place at international destinations, covering the most relevant topics for the dealerships and learning from global best practices. The Academy accompanies the participants with individual online elements, personal coaching and transfer support to create real impact in the Porsche Centre. To ensure individual mentoring, the Dealer Academy is limited to 15 participants each year with the opportunity to engage in exchanges with members of Porsche AG management as well as discuss the latest trends and ideas among their international peers.

In addition to attending the Virtual Launch and the three face-to-face sessions on leadership, strategy, KPI as well as Design Thinking and HR-issues, participants are required to complete a practice-oriented written thesis on a topic covered in the Academy. In this 10 to 15-page essay participants examine a strategic challenge from their own day-to-day operations, and design practical solutions in the form of a plan that is implementable in their company and incorporating content they had during the three modules. All of these ultimately lead – if concluded according to the prerequisites set by the University of St. Gallen – to an academic “Certificate of Advanced Studies” which the participants receive with their graduation about two years after they started.

I have been working in this industry for many years now and have to say I was blown away with the whole experience which is something I’m immensely proud to have been a part of and something that will live for me forever.
Phil Brine, Porsche Centre Principal, Porsche Centre Bournemouth

As the Dealer Academy was successfully paving the way for enhanced business results and higher customer satisfaction indices, Porsche AG decided to run the executive education and development programme on an even higher level. From 2015 onwards the Dealer Academy took knowledge transfer several steps further through a targeted combination of Impact Monitoring and Leadership Coaching. Through Impact Monitoring, in the aftermath of each module the Academy supported participants in leveraging input from lectures to address specific challenges they faced in their dealerships. Simultaneously, the Academy offered personal on-site Leadership Coaching to each participant during all three Semesters, supplemented by calls in between, enabling access to a constant sparring partner.

Impact on Different Levels

With its steady influence on the dealer principals, general managers and investors, the Dealer Academy has instigated an observable impact on leadership behavior, retention rates, strategic priorities, KPI-related process optimization and – above all – on customer centric activities that consequently lead to better employee survey grades, improved Porsche AG passion reports and higher values on the Customer Satisfaction Indices. Altogether, these measures lead to a holistically better performance of the Porsche Centre and improved sales and after sales figures in the respective markets of participants.

Effect on the General Manager

Taking a closer look at where the Dealer Academy has proven evidence for positive changes and effects, four different clusters witness success so far 2: Dealership inward-looking effects such as “Leadership & Collaboration” (75% 3) and “Internal Business KPI and HR-processes” (20%) on the one hand, and Dealership outward-looking effects such as “Strategy and Market Development” (25%) and “Customer Orientation and Customer Satisfaction” (90%) on the other.

For example, a General Manager and CEO of a group owning Porsche Centres in Sweden was captivated by the idea of giving his Porsche Centres in Malmö and Helsingborg what he called a “soul”. Initiated by the lectures of the University professors on leadership and customer excellence, he created a “Ferry Folder” which described the Porsche Centre’s vision, customer promise and motto and which was handed out to each and every employee with a sincere “thank you” by the CEO for every effort the team had accomplished.

At the Porsche Centre Beaverton in Portland, Oregon, another General Manager was intrigued by the idea of giving himself and the team the answer to the “Why” in business life. How to crack the code of leadership in knowing how to manage people in a way one could tap into their passion and to hire by more looking at cultural fit and believing in the “why” rather than being driven by pure qualifications. A very personal story of engaging people in the workplace.

Taking the above experiences for more impact in the dealerships and for improved leadership skills regarding the General Manager himself, the initial and overall objective of the Porsche Business Excellence initiative still holds strong. If PBE is understood as the “vehicle to transport Strategy [now] 2025 to the Porsche Centres”, the participants are definitely also working hard on fulfilling the targets given by the manufacturer. As show the efforts of the Porsche Centre Mid-Sussex, UK, which had been roller-coasting in the “Passion Report” from 6th position in 2016 to 17th in 2017, only to find itself on 4th rank in 2018, ultimately leading to being granted the first and only “Centre of Excellence”-Porsche AG dealer in the UK.

Regarding the impact of a Porsche Centre’s culture on augmented customer value driven behavior, one of the impact papers described the so-called “Customer Experience Value Added Project (CEVAP)” which was launched 2017/18 in the New Country Porsche AG in Greenwich, New Jersey, US. The study on culture building inside this dealership in 2017/18 and its effect on the customer experience by its General Manager was so convincing that CEVAP has become a key component of Porsche AG’s Strategy 2025 plan for Porsche Cars North America (PCNA). With it, they look to enhance the brand experience and make an automobile dealership a place for future generations to look forward to working for.

Effect on the Subsidiaries’ Performance

Correlation between the participation in the International Dealer Academy and its impact on a whole market nicely unfolds with the example of Porsche Cars Great Britain (PCGB). As PCGB is measuring the Porsche Centres’ performance by using a Balanced Scorecard, the influence on the KPIs measured by the Centre Principals is crucial. The areas the Balanced Scorecard is measuring cover the fields “Buying”, “Owning”, “Business Operations” and “Customer”. As a clear correlation between the contents covered by the Dealer Academy and the Balanced Scorecard scores, the Centre Principals that have graduated from the Academy could show considerable performance development over all four KPIs following their participation. Finally, looking back at the objectives the PBE project initiative targeted to achieve in the retail market, the International Dealer Academy as one of its vehicles had and still has a lasting effect on the Porsche AG Retail Network as a whole.

1 The programme targeted and targets General Managers and Centre Principals in the first place; however, also investors or General Sales Managers (to become GMs in the near future) could take part in this development measure.

2 Based on the foundation of 66 project papers and the topics the dealers were focusing on as their main transfer impact from the International Dealer Academy back in their dealerships. The percentage would give an indication on which topics the participants have put their transfer and impact focus on.

3 The percentages describe the coverage of the listed contents by the project papers handed in.

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