found that good leaders don't get blown off course by today's events, or even worry too much about them. And I have learnt, like many people before me, that failure is inevitable, and what matters is being flexible enough to change your mind when things go wrong.
But, of course, different situations require different types of behaviour. Leadership behaviour in a situation where safety is critical is not the same as it is in an informal team. You can't run a startup like an army regiment, or vice versa. So when researchers in the 1960s tried to make similar lists of how leaders behaved, they found that the list was too long to be useful.
So, perhaps, are the best leaders the ones who know how to change according to the situation? The point of being a leader is that you will be able to make a difference, and so you can choose, at least to some extent, how to do that. This “situational model” was developed by Kenneth Blanchard and Paul Hersey, and they identified four distinct leadership styles: Telling, Selling, Participating and Delegating, depending on the context.
But this still tends to focus on how leaders communicate with the managers who report to them. An inspiring leader has to look at the biggest picture: everyone you are responsible for, the whole team, the whole organization can be transformed if they can find inspiration in the way you lead them. The attributes, behaviour and situational awareness of leaders are useful tools. We are all interested in something bigger.
Inspiring leadership transforms teams, and it transforms lives because you show the people you lead what can be possible, and then, together, you achieve it.
Learning to Lead
You can learn to lead at any time. I was lucky, I had the chance to learn early, although it didn't seem lucky at the time. I joined Porsche in the UK in 1987, when I was 27. At the end of the 1980s Porsche's image was associated with the “yuppie” business culture at that time. For good and bad reasons, the brand had become a powerful status symbol. In the film Crazy People, an advertising executive played by Dudley Moore decides to tell the truth in his advertising. His (unfair) pitch for Porsche: “It's a little too small to get laid in. But you get laid the minute you get out.” It was not a fair reflection of the Porsche brand but it stuck in the public's imagination.
I'd always loved messing about with car engines, and joining the company that was associated with excellence in engineering should have been my dream job, but by the early 1990s, Porsche in the UK was heading for a nasty crash. As with many failing businesses, respect, pride and support had gone out of the window. We didn't have a strategy, any consistency or any vision. We were well on the way to losing 90 % of our sales in the UK, but we just kept building cars because nobody made a decision.
This wasn't a secret, because Porsche's sales in all its export markets were hit by the global recession that began on Black Monday, in October 1987. In January 1989, Porsche announced a 52 % fall in profits, as US sales had halved the previous year. Group turnover fell by 27 %. “The last business year was one of the hardest in the history of Porsche,” Walter Gnauert, the finance director, had told the press. In the UK, we had three years of inventory, literally parked in a number of warehouses and then in a field as they overflowed. Apparently desirable cars that no one wanted to buy. The Sun newspaper printed a picture of them on its front page. Porsche was the symbol of the impending recession.
The downturn hit the UK later, in the early 1990s. One of the problems for Porsche was that many of the car owners were entrepreneurs and small businesspeople (the yuppie image of the time was never strictly true). When they had problems with their business in the recession, the entrepreneurs liquidated the easiest assets to get rid of, and so the UK's used car dealerships were flooded with second-hand Porsches.
Adrian Hallmark was sales and marketing manager while I was at Porsche. We were about the same age, and thought about things the same way, and we were equally shocked at what was going on in the business. Adrian went and checked all the orders that we were getting from dealers. He found, to his horror, that they weren't real sales: dealers would pre-order cars so that they were at the front of the queue when a sale did happen. When sales dropped, we were left with the stock.
“Finding this out was one of the most horrendous business experiences I've had,” he recalls, “It took 18 months to clear our stock. It wasn't helped by having newspapers' helicopters flying overhead to take photos of all the cars we hadn't sold… When we unearthed all our problems, we went into corporate denial. We ended up with so much stock because we were too frightened to tell the factory the bad news.”
If you have ever been in a failing business, you know that there's a moment when, collectively, no one seems to know what to do, and the company looks for someone to grab it by the scruff of the neck. As is also common, we didn't have anyone who was willing to do it. I was just a young operations manager, but the managing director used to pull me into board meetings in front of the whole Porsche family. He would say, “Welcome! Kevin's going to tell you what's going on.” Four years after I had started work at Porsche it felt as if I had taken on more and more responsibility almost by default because nobody else wanted it.
During my teenage years, when British industry was associated with failure, I had been a small part of a successful business which effectively managed itself because the people who worked there, top to bottom, felt that that it was the right thing to do. Fifteen years later, I was part of a business that was associated with extreme success, but which was headed for disaster.
Eventually, at the end of March 1992, the UK Managing Director was relieved of his duties and Porsche's German management showed up at our offices en masse. They sat in the boardroom and they demanded to see me and the German finance manager who had been parachuted in to keep the business afloat. Together, we'd been running around behind the scenes trying to steady the ship. I phoned my wife and I said, “I'm going to get fired today.”
I was scared stiff. I was 32, mortgaged over my head, with two young kids.
So we were called into the meeting, and they started to give us a hard time. We had nothing to lose. So, assuming I'd be fired anyway, I said to them: “Hang on. You should be embarrassed. This was entirely predictable. You could see it coming, we could see it coming.”
I actually said, “You could fix this.”
They said, “What do you mean?”
For four hours, we stood at two flip-charts in front of this German board and explained to them what we would do.
And then they told us to leave the room.
After the meeting was over I phoned my wife and said, “I'm not coming home.”
“What happened?” she asked.
I said: “They just made me the managing director.”
I had a degree in engineering, a few years of experience as a management accountant, and the idea in my head that, if we could recapture the respect, pride and mutual support that I'd seen in my first job, and if I remembered what my dad had achieved, then maybe we could salvage something.
I started to use these ideas in my first week as managing director of Porsche. I had never run a company before, but I knew we were operating day to day without a clear strategy and we were still spending money we didn't have. In the head office, we employed 260 people, even though our dealers were selling fewer than 2,000 cars a year, and Porsche did all its manufacturing in Germany. In the head office we had our own press office with four staff, an in-house marketing agency, a personnel department. We employed 14 people to develop software, and 12 to do sales planning. On 28 April 1992, I reduced our headcount to 120. We went from 13 departments to 5. It was a dramatic change. Many people told me it was too much change in one go. But the business was failing, so something had to be done to stop the losses, and quickly.
I had been in the company for four years. I knew every employee. I also knew the wives, husbands, kids and even the dogs of the people we let go. It was awful. I went back into my swanky new office, and I locked the door, and I cried my eyes out. This was a defining moment in my journey. The point when I swore I would never again allow a business to get in so much trouble that I had to make mass redundancies, and I never have since.
But, in 1,000 days, we went from losing 20 % on each sale to making