work haveshedlightonhistechnicalachievementsandoffe . Awealthofbiographies anddocumentariesonhis Much has been said about the oeuvre of Prof. Dr. hc. Ferdinand were soconducivetothegenesisofinnovator Why theVienneseLohnerwerkeandAustroDaimler Ferdinand PorscheandLeadingAustriancompanies: companies playedacentral rolehere. his worldwidefameasatechnicalgenius.LeadingAustrian develop newideas,whichultimatelylaidthefoundationfor yer, whereheveryskillfullysecuredthefreedomneededto ever discussedwashistalentforchoosingtherightemplo aspects inPorsche‘screativework.Onesubjectthatishardly to briefcommentsmostlyaboutthespecialroleofpractical explored. Discussionsofthistopicinliterature arelimited his personalinnovativenesshasattimesonlybeensparingly red a meticulous portrayal of his life. Butthedevelopment of innovate. Source:Michael Shamiyeh strengths inthearea ofinnovation.Thepositionsthe companylogosindicatePorsche‘s employers‘needto Chart showingthe productlifecyclesofhorse-drawn carriages andautomobiles,aswell Ferdinand Porsche‘s 1 - -

© 2012 Michael Shamiyeh – www.porsche-prinzip-innovation.com entirely newproducts—eithertosubstitutetheirwithsomethingra Porsche‘s experimentswithnewideasbecausetheywereinurgentneedof specific entrepreneurialscenario:theywereallmoreorlessforcedtofinance Porsche joinedbeforeself-employmentattheageof55allshareonehighly The followingarticle attempts to close this gap. The companies thatFerdinand innovative potentialrequiresabriefintroductorydiscussionofthetypesin Any portrayal of Ferdinand Porsche‘s intelligent approach to unfolding his own reaching vision. precarious situationofanenterpriseforhisowngoalsandinterestswithfar- market. Inotherwords,Ferdinand Porscheunderstoodhowtoleverage the or toestablishthemselvesasrelativelyyoungcompaniesonarapidly growing dically new in the years to come, thus forestalling foreseeable sales difficulties, Types ofinnovation and theirurgentneedtodevelopnewproducts. innovation is the basis for a concluding statement on his choice of employers products. ThesubsequentanalysisofPorsche‘sstrengthsinthecontext novation andtheirstrategic roleinlaunching,marketingandultimatelyrenewing tion givesway tofar-reachingprocess innovations.Thelatter, incombination the levelofprice, qualityandproduction. Thefocusonradical product innova of productfeaturesand configurations nowpavestheway forcompetitionon peting companiestypically alsostartstochange.Increasingstandardization and adominantformbegins toestablishitself, theinnovative focusofthecom Once thecompetitivemarket establishesthataspecifictechnologyissuperior industry paradigm thatdominatestothepresentday. that automobiles with internal combustion engines asserted themselves as the each variantviedforsupremacyinarelativelysmall market.Itwasnotuntil1900 of propulsion(combustion,steamandelectricity) wereexperimentedwith,and of theinventionautomobile,forexample,at leastthreedifferentforms different variantsgenerally competefordominanceinamarket.Inthecourse there isasubstantialneedforradical productinnovation,sinceanumberof products. Intheintroductoryphaseofanewcategory, suchasthe automobile, on playadifferentstrategic roleinspawning,marketingandpossiblyrenewing What isofrelevancetoourdiscussionthefactthattwotypesinnovati all areas,aswillbediscussedindetaillater. production. Ferdinand Porsche‘sinnovativecapabilitywasnotequallystrongin and methodsthereforealsoencompassesthefieldsofmarketing,sales ties andmanufacturing-specificskills.Theintroductionofnewideas,techniques innovation requiresthesynthesisofmarketneedswithtechnologicalcapabili innovation is not equated exclusively with research and development. Effective services orexperiencescanalsobeunderstoodtoproducts.Furthermore, vations iftheyactuallyfindanapplicationandalsopenetrate themarket,where commercial application.Thatis,newproductsorprocessesonlybecomeinno only resultsfromideasorinventionsiftheyactuallyexperienceasuccessful significant hereistheparticularviewofeconomicscience,whereinnovation tion, whichareimaginativeapproachestomanufacturingthatproduct.Whatis innovation —thenovelideasproducedbyabusinessandprocessinnova invention of anew offering or process. Distinction is made between product In commonparlance,innovationisusuallyunderstoodtobeanideaorthe 2 ------

© 2012 Michael Shamiyeh – www.porsche-prinzip-innovation.com realized thathisinfluencewasneitherdesirable norfeasiblefromthesharehol early yearsafterthereorganizationofhiscompanyasacorporation, hesoon the early1890s:Wherehehadsoughtactiveinvolvementinproductpolicy his Daimler-Motoren-Gesellschaft(DMG)canbecitedasagoodexamplefrom Daimler‘s withdrawal frombusinessoperations andsubsequentresignationof diverse customerbaseandthusrapidly conqueragrowingmarket.Gottfried with minorproductadaptations,allowsenterprisestocovertheneedsofa world famedespitethefactthatallfundamental inventionsfortheautomobi of Ferdinand Porsche, accurately notedin1951that thedesignerstillachieved who underthepseudonymHerbertA.Quantreleased oneofthefirstbiographies domains, suchasaviation,shippingandrailways. EvenRichardvonFrankenberg, the automotiveindustryheintroducedground-breaking innovationsinrelated Ferdinand Porschewasagreatproductinnovator-becauseparallel to The innovativeforceofgenius see below. interests; evenPorschewasnotstrongacrossalltypesofinnovation,aswewill he joinedcompaniesthatempoweredthedevelopmentofhisspecificskillsand their ‚rescuer-in-need.‘Butwhatalsospeaksforthebrilliantengineeristhat It wasthereforenotuncommonforcompaniestoseeFerdinand Porscheas all typesofinnovationareabletothriveinthemarket. process innovationsareespeciallyessential.Onlythosecompaniesthatcontrol le. In the course of dissemination and market diffusion of new offerings, major innovation isnecessaryintheemergenceandatendofanewoffering’slifecyc marketing, salesandproduction.Incontrast tothis,radical ordiscontinuous to renewal.Itrequiresclosecooperation betweenresearchanddevelopment, needs to shift from product creation, development, launch and marketing through Consequently, innovationisacomplexand uncertain enterprisewhosefocus represented bycarriagemanufacturers. late 19thcenturycanbeseenasoneofthosemomentsformotiveindustry, product innovations.Thedevelopmentoftheinternalcombustionenginesin a technologicalchangeornewcompetitor—cantriggerwaveofmajor possible. Only substantial changes in the environment — such as deregulation, manufacturing processesaresointertwinedthatonlysmallimprovements The focusonprocessinnovationsusuallyremainsuntiltheproductandits existing, marketableDaimlerdevelopmentswithintheirexistingspectrum. for installationinvehicles,butrather wantedtomakemoneyonexploitingthe interested intheimprovementandperformanceofhigh-speedpetrolengines ders’ pointofview. Far fromliquidityproblemsthatDMGfaced,peoplewerenot and designer; his work is far too multi-faceted. Nevertheless, one general this question inthecontextofthisanalysis cannotdojustice totheengineer What wasitthatmadeFerdinand Porsche great?Acomprehensiveanswerto completed whenPorsche enteredtheworldstageat1900World Exhibition. for supremacy in the automotive industry, and Diesel‘s work was also largely Gottlieb DaimlerwasalreadycompetingwithWilhelm MaybachandKarlBenz Porsche‘s birthin1876.WhiletheyoungFerdinand wasstillatelementaryschool, Otto haddevelopedthefour-strokeenginetoseries maturityoneyearafter le industryhadbeenmadebymenbeforehim.For example,NikolausAugust 3 - - -

© 2012 Michael Shamiyeh – www.porsche-prinzip-innovation.com for decadeswithhisideas,thusinitiatingaparadigm shiftintheindustry. Porsche managedseveral timestorevolutionizeconventionsthathadexisted innovativeness mustbeexploredout:asexplainedindetailbelow, Ferdinand characteristic thatcontributedtothesuccessfuldevelopmentofhispersonal in Austro-Hungary. Source:Archive PorscheMuseum equally possible,although theLandwehrtrain wasoriginally createdbecauseofthepoorly developedrail network chanism devisedby Ferdinand Porscheallowedperfectmaneuvers inbothdirections.Theuseonrail cars was 1914, electrictrain systemDaimler-Landwehr, typeB.Thefirstversion(typeA)wasbuilt in 1910.Thesteeringme- of Austro-Hungarianaviation.Source:ArchivePorscheMuseum factory premises.ThestrongcommitmentofthecompanyinfieldaviationmadeViennaNeustadtcenter In 1910,Ferdinand Porschewithafolderofdrawings infrontofanEtrichfuselageframe ontheAustroDaimler 4

© 2012 Michael Shamiyeh – www.porsche-prinzip-innovation.com invention ofprinting,thelightbulbortelephone.Thevastmajoritysuc Innovations are often seen in conjunction with great inventions, such as in the A secondtypeofrenewal,theradical ordisruptiveinnovation,includesadeve and lateralsoforautomobiles,canbeunderstoodasanincrementalrenewal. Daimler‘s developmentofastationarygasolineengineforpropulsionboats but theydonotfundamentallyquestionthedominantdesignprinciple.Gottlieb may providenewversionsorextensionstoanotherwisestandardproductline, novation inproductsandprocesses.Thesesmallchangestoexistingofferings cessful innovations,however, areduetothecumulativeeffectofincrementalin time stilljust25yearsold,andcarmanufacturer LudwigLohnerweretheglo an in the wheel hub, however, was entirely novel. Porsche, at the the U.S.in1884.Theproduction-readycombination ofasteerable frontaxlewith Even theconceptofhubmotorwasfamiliar. Several patentswerefiledin presented hissolutionin1900. of simultaneouslydrivingandsteeringthefrontaxletwoyearsbeforePorsche Viennese automobileworkshopGräf&Stifthadexperimentedwiththeproblem tive combinationofexistingtechnologiesandanewcontext.For example,the Instead, theseinnovationsputmatureproductsonthemarketthroughacrea hybrid petrol-electricdrive,didnotrequireany fundamentally new technology. hub motor, theelectric vehiclewithfour-wheeldrivecarortheMixtea Porsche‘s earlyproductinnovations,suchassteerable front-wheeldrivewitha technologies andideas. the path of radical renewal, but through the creative combination of existing industry. Despite this,hestillforcedaparadigm shift intheindustry, noton one generation afterthemajorinventionsofotherdesignersinautomotive Ferdinand Porsche‘s contribution to the automotive industrywas now at least the necessaryresourcesfromnewdomain. kruptcy withtheirprovenskillswererequiredtoadaptandrapidly toacquire substantial changesinindustry. Thoseentrepreneurswhosoughttoavoidban the timespecializinginelectricmotors)weredrivingforcebehindthese der GottliebDaimler, EmileLevasseur, RudolfDieselandFerdinand Porsche(at The effortsoftheAustriancarmanufacturerLudwigLohnerwithenginebuil company. tal renewalis:itrequiresnewskills,processesandsystemsatalllevelsofthe such abreak.Thecrucialaspectoftheradical renewalincontrast toincremen suing crisisamonghorse-drawn carriagemanufacturerscanbeunderstoodas to aseminalrevolutioninindustry. Theinventionoftheautomobileanden expectations ortheuseofnewtechnologiesandmethodsthusultimatelyleads and thusleadstoabreakwithexistingconventions.Amajorchangeincustomer lopment orapplicationthatbringssomethingsubstantiallynoveltotheworld industry wasunstoppable. was convincinglyrevived inPorsche‘sserialsolution.Theparadigm shiftinthe between thefrontandrear axles—onethathadenduredover130years — trucks tobuses.Theconventionofseparating thesteeringanddrivetechnology in differenttypesofvehiclesfollowed,ranging fromtrucks,ambulances,fire bally firsttolaunchthisinnovationinserialproduction. Numerousapplications 5 ------

© 2012 Michael Shamiyeh – www.porsche-prinzip-innovation.com Lohnerwerke record withanelectricvehicleofhis owndesignonSeptember23,1900attheSemmering,southofVienna.Source: Manager atJacobLohner&CoinVienna. ThiswasthecarwithwhichFerdinand Porscheestablishedaspeed 1900: Ferdinand Porsche at the wheel of a Lohner-Porsche electric race car; in the rear is Karl Paulal, Works automobile exhibited.Source:Lohnerwerke hub motors(PorscheSystem)whichwonwithagoldmedalattheParisWorld Exhibitionin1900astheonlyAustrian 1900 Lohner-Porscheelectriccarwithtransmission andgearlessfront-wheel driveviabattery-poweredelectric 6

© 2012 Michael Shamiyeh – www.porsche-prinzip-innovation.com Porsche electricracing car. Source:Lohnerwerke Bouton gasoline engines for generating electricityfor the electric drive.Thiswas a conversion of the Lohner- 1900: The „Semper Vivus“ vehicle, the first Lohner-Porsche gasoline-electric drive vehicle (Mixte) with two De Dion- London. Source:Lohnerwerke each forracing use.Ferdinand Porschedeliveredthisvehiclehimselftoitspurchaser E.W. HartinLuton,northof In 1900,Ferdinand PorscheasapassengerinLohner-Porscheelectriccarwithfourwheel-hubmotorsof2.5HP 7

© 2012 Michael Shamiyeh – www.porsche-prinzip-innovation.com between 40HPand350HP. Source:ArchivePorscheMuseum the aircraft enginedevelopmentseriesdesignedbyFerdinand Porschewith4,6,8,and12cylinders,outputs 1912, Austro-Daimleraircraft engine.Theair-cooled,four-cylinder, flatengineshowninthepictureresultedfrom ranged fromclassytown carstotrucksandbuses. Inadditiontothenightly test perimented with newelectriccarsthere; thevariantsgrew continuously and of theassociationbetween developmentcostsandearnings,thedesigner ex ry, runbyPorsche,wasworkingovertime. Obviously lackinganyunderstanding four andahalfdaysweek. Bycontrast, thestaffatLudwig Lohner’scarfacto workers attheLohnercarriage factorywerelaidoffandtherestonlyworked great pressure.Ascanbeseeninthepublicmedia ofthattime,halfthe the increasingtrendtowardsautomobilesputcarriage manufacturersunder The followingepisodeswillservetoexemplifythis: attheendof19thcentury, neering performancebehindtheproduct. marketing, etc.) probably did not have the same importance to him as the engi innovation inthedownstreamvaluechain(finance, manufacturing,logistics, The technicalsolutiontoproblemswastherealdriver behindhiswork.Process focused firstonthosewhowereinterestedinusing hisengineeringservices. of economic exploitation or innovations. Of course, Ferdinand Porsche always The brilliantengineeronlyseemstobesecondarilyinterestedinthequestion aesthetic perfectionofhisverybalanced-lookingdrawings. and durable engineeringofferings.Yet littleresearchhasbeendoneonthe and passionatedesignerwhosetopprioritywasperfectingfunctional,capable is outsidethescopeofthiswork.Rather, therecordssuggestahard-working ideas clearlydemonstrates this.Thisisanexcitingtopicinitsownrightthat as hisearlybusinessconductinregardtothelicensingofpatentsand no interestinfinancialrecognitionforhisskillsandwork—quitethecontrary, nomic exploitationofinventions.ThisisnottosaythatFerdinand Porschehad The availableliterature providesalesspronouncedpictureinthefieldofeco lishment ofhisdesignsonthemarket? production-ready developmentofhisideas,oreconomicallyprofitableestab and products,thatis,inthenecessaryvalue-addedprocessessuchas extent wastheengineerinnovativeawayfrominventionofnewtechnologies dinand Porschewellversedinalltypesofinnovation?Inotherwords,towhat A crucialquestionhasremainedunanswereduntilnow:To whatextentwasFer 8 ------

© 2012 Michael Shamiyeh – www.porsche-prinzip-innovation.com Engineer LudwigLohner. Source:Lohnerwerke 1900. Wheel-hubmotorproductionatJacobLohner&Co,.Second fromright,theslimmanwithhat: the twoelectriccarsthatwereshownatParisWorld Exhibition.Source:Lohnerwerke 1900, assemblyworkshopatJacobLohner&Co,Vienna.Intheforegroundandonleftside(onlypartiallyvisible), 9

© 2012 Michael Shamiyeh – www.porsche-prinzip-innovation.com of criticismagainsttheengineer. Although thesepowerfulvehiclesweretech ten gasoline/electricMixte carsbetween1898and1904soonledtothelevying necessary andPorscheachievedhisgoal.Thepoor salesof37electriccarsand instead writtenoffbyPorscheinacrash. Anewdevelopmentprojectbecame contrary to Lohner‘sinstructions,sawnoincrementalimprovementbutwas a double-deckerbusthatdidnotmeettheengineer’s expectationsandwhich, runs, whichonlyafewpeoplehadthecapacityto comprehend,therewasalso 1905. Lohner-Porsche-ImperialelectricbusforBerlin.Source:Lohnerwerke (generator) providesthepowerforwheel-hubmotorsbuiltintosteeredfrontwheels.Source:Lohnerwerke nagement andadministration buildinginVienna.Alow-revvinggasolineenginedirectlycoupledwithadynamo 1902: Ferdinand PorscheinfrontofaLohner-PorscheMixtevehicle,takenthecourtyardLohnerma- was thusnon-viable asacommercial vehicle. on the model. A small car at thetime cost only about 5,000 crowns. TheMixte example, aMixteautomobile costbetween15,000and34,000crownsdepending a manytimesthecostof acomparable vehiclewithaconventional design;for nically complexandtherefore expensive,customerswerebeingaskedto pay 10 -

© 2012 Michael Shamiyeh – www.porsche-prinzip-innovation.com Mixte cars,theyprojectedanoptimistictargetof100vehiclespermonth.Con Société Electrique as a mutual distribution company for marketing electrical and partner EmilJellinek.Whentheyjoinedforcesin1906tofoundtheMercedes Lohner andPorschemadeasimilarmiscalculationtogetherwiththeirbusiness Piëch, alsoallowsconclusionstobedrawn aboutthissmartmove. later joinedforceswithhisson-in-law, thecommerciallysavvylawyerAnton his innovativecapabilitiesforseminalengineeringsolutions.Thefactthathe products inthecourseofhiscareer. Thisassuredhimthefreedomtodevelop this reasonthusalmostalwaysjoinedcompaniesthaturgentlyrequirednew engineer was obviously very aware of his strengths and weaknesses, and for interest inprocessinnovation.Asthefollowingsectionswillshow, however, the There aremanyotherexamplesofFerdinand Porsche’sexclusivelysecondary a flash. Amplified bytherecessionof1907andMajaflop,companyfounderedin trary totheirexpectations,lessthan255vehiclesweresoldinjusttwoyears. many different viewpoints: that seemsunusualbecause oftheunequalpreconditionspartners from Ludwig Lohnerinabusiness partnershippreciselyatthistimeofcrisis—a step thus faristhattheyoung electricalengineerFerdinand Porscheteamedupwith own domainofcoachbuilding, becamenecessary. Whathasnotbeenmentioned The searchforpeoplewithskillsinenginebuilding, thatis,farremovedfromhis Lohner needed a radical product innovation in order to survive on the market. decline insalesbybuildingcarshimself)havealready beenbrieflydiscussed. ne manufacturers (and thus halt his horse-drawn carriage factory’s serious Ludwig Lohner’seffortsattheendof19thcentury tocooperate withengi Leading companiesinneed Lohnerwerke and Ferdinand Porsche.AtthesuggestionofJellinek,hubmotorsweremountedinrearaxle.Source: 1907: ThisviewofthenewassemblyshopinViennaNeustadtclearlyshows thegreatambitionsofEmilJellinek 11 - -

© 2012 Michael Shamiyeh – www.porsche-prinzip-innovation.com On theonehandhasayoungengineerwithgreatambitionsbutlittleex and havelongsincereachedtheirzenithinthemarket—especiallyifca talent wouldwanttojoinacompanywhoseproductsareanchoredinthepast From theperspectiveofFerdinand Porsche,thestepisunusual.Whatyoung trouble. partner whocanpotentiallyleadthecompany, batteredbythecrisis,outof obvious. Withwhatwereprobablyinitiallylowcosts,hebuyshimselfanewyoung that thismergercouldseemworthwhilefromLudwigLohner’sperspectiveis industrialist withalong-standingleadingenterpriseintheAustrianmonarchy: perience intheautomotiveindustry;onotherhand,asociallyestablished different lifecycleswiththeirproductsandthus needed differenttypesofin It iscrucial,however, thatbothentrepreneurs,LohnerandEgger, hadreached electric motors,powerregulators,andtirelesslyimprovingitsdesigns. the lowandhighcurrentelectricalengineering,producinglightbulbs,dynamos, found, hisyoungcompany, foundedinVienna1867, enteredintoallbranches of pioneer, but in thefieldof electrical engineering.Regardlessof the successit coach builderthanatVereinigte ElektrizitätsAG.LikeLohner, Eggerwaslikea Nonetheless, thejobprospectswerenotnecessarilymoreattractive witha nity todelveintothisrelativelynewfieldofautomotiveengineering. major improvements.AmovetoLohnerthereforeofferedPorsche the opportu had theopportunitytoconstructivelyparticipateindevelopmentandintroduce summer of1898toconstructelectricallypoweredvehicles.Porscheatthetime technical innovation.LudwigLohnerhadjoinedforceswithBélaEggerinthe Above all,itmusthavebeenFerdinand Porsche‘sdeeplyrootedpassionfor pioneering enterpriseforapositionincompanyalreadymarkedbythecrisis? What motivationpromptedPorschetoabandonpromisingcareerprospectsina builders atthattime. this partnership,asapproachwascommonbetweencoachworkandengine Lohner-Porsche“ badge on the new brands only provided a limited incentive for Lohner’s concession to Porsche in the form of adding hisnameto the „System ready hintedinPorsche’stimeofabusinessopportunitywithinhugemarket. rapid expansionofcompany, whichwasacquiredin1910byBrownBoveri,al Vienna fromamechanictothemanageroftestingdepartment.Also, four years,PorschewaspromotedatVereinigte ElektrizitätsAGBélaEggerin reer opportunitieswithhiscurrentemployeraremorepromising?Inlessthan Elektrizitäts AG inVienna. trian specialists,orstrove tosecureamajorityshareholdingforhisVereinigte management ofbusinesses heacquiredinhisownhands,orthehandsof Aus through innovativemanagement ofprocesses.For example,Eggerretainedthe management waslessdominated byradical newproductinnovations, butrather sition inthemarketthroughseveral factorystart-upsandacquisitions.Their well. Asearlyastheendof19thcentury, Eggerhadgainedadominantpo transmission forfactories,officebuildings,hotelsandsoonpowerstationsas at homeandabroad,numerouscompleteinstallations forlightingandpower a youngbuthugemarketwithitscovetedofferings. From the1880s,Eggerbuilt, emergence oftheautomobile,Eggerwassettingabout corneringwhatwasstill horse carriages,andurgentlyneededaradical productinnovationduetothe novation. WhileLohneroperated onahighlysaturated anddecliningmarketfor 12 ------

© 2012 Michael Shamiyeh – www.porsche-prinzip-innovation.com For Ferdinand Porsche, therefore, the electricity business offered little pros successor toPaulDaimler. WithoutthepatentsofStuttgartGottlieb Daim Daimler) in Vienna Neustadt as a development and production manager and the In 1906,PorschejoinedtheAustrianDaimler-Motoren-Gesellschaft (Austro also relevantinthiscontext: conducive to the genesis of theinnovator. A brief mention of Austro Daimler is exception oftheSteyrWerke, ’sleadingcompanieswereparticularly solutions, hequicklypackedhisbagsandlookedfornewchallenges.Withthe and peopletriedtoinhibitPorsche‘spassionfordevelopingnewengineering of productinnovation.Butastheagendashiftedtowardsprocessinnovation lows thesamepattern.Eachcompanyengineerjoinedwasinurgentneed It ischaracteristic ofFerdinand Porsche‘schoiceofemployersthateachfol former, givenPorsche‘s strengths. innovation and Egger’s focus on process innovation could only fall in favor of the achieve operative profits. A possible choice between Lohner‘s focus on product developments, butrather strovetomakeprocessesmoreefficientandthus records againprovideaclearpictureofcompanythathadlittleinterestinnew will by Béla Egger from promoting the development of a motor vehicle. These recently releasedpublicrecords,theyoungengineerwaspreventedagainsthis neral andintheseminalfieldofautomobileparticular. Asweknowfrom pect ofthedevelopmenthistechnicalprowessinproductinnovationge Vienna. IntheforegroundanAC/DCtransformer. Source:ArchivePorscheMuseum 1897: Ferdinand Porsche(standingontheleft,withoutahat)atBélaEgger&Co,later Vereinigte ElektrizitätsAG, broke paradigms inthe industryintheirownrights. of passenger vehicles,aircraft engines,, and sportscars,allofwhich for newinventions.From thatpointon,he focusedsuccessfullyondevelopment rietary products—theperfect taskfortheinnovativeengineerwithhispassion Technical Director Ferdinand Porsche was tasked with creating a range of prop complete reorientation.Initially notmuchmorethananassemblyplant, new from the automotive world in 1909 forced the company in Vienna Neustadt into The endoftheEmilJellinekera, followingtheMajadisaster, andthefinalexit focus ondevelopmentworkandmanufacturing commissionfordistributors. ler works,withwhichthecompanyhadsplitayear earlier, itwas essentialto 13 - - - - -

© 2012 Michael Shamiyeh – www.porsche-prinzip-innovation.com While Ferdinand Porsche‘sdecisiontogoStuttgartgotoffapromi . of thesupervisoryboard.Porscheleft,andfromthenonsetaboutconquering to modernizethefactoriesconflictedwithshort-termfinancialinterests high riskrelatedtothe huge investment coststhatwouldhavebeen necessary concept ofthesmallcar, whichhadnotyetfullyestablisheditselfinEurope.The with the Sascha car. This pioneering work had the potential to revolutionize the His gloriousactivitiesforAustroDaimlercametoanabruptendinFebruary 1923 prompted DaimlerandBenz to combinetheiroperations, initiallyinajointven of theGermanautomotiveindustrybecameevident andtheneedtoupscale After thecurrencyconversioninNovember1923, thestructural weaknesses the genesisforgreatsportscars.Porschewasin hiselement. trucks andcustomdesigns,thecompanycreated series modelsthatservedas new underpinnings for theoldsupremacyof the brand inthisfield. Besides further technicalimprovements.Porscheseemed to betherightmanprovide anticipating acompetitiveadvantageoverforeign-made productsmainlydueto Untertürkheim wasstillfocusedonastrategy ofluxuryandsportscarsmodels, to buildautomobiles—butthesewerepre-warmodels.DaimlerinStuttgart- Allied militaryobservers.Despitetheyearsofinflationcompaniesagainbegan and alsosemi-finishedmaterialwasdestroyedunderthesupervisionof production. Materialfortheproductionofaircraft engines,submarineengines the post-waryears,automotiveindustryagainstartedtoshiftcivilian sing start,itwasmarredbyajointventureformedDaimlerandBenz.In sche Museum Eduard FischerwassecondandthirdCountHeinrichSchönfeld,bothalsoinAustro-Daimler. Source:ArchivePor- Heinrich wagonandsensationallytookfirstplaceintheoverall standingsagainstfierceinternationalcompetition. 1910, PrinceHeinrichTrials. Ferdinand Porsche(driving)participatedinthislong-distancedrivewithhisPrince Werke only lasted a few months. The effects of„Black Friday“ onthe New York Austria inthe winterof1929.Buthis period astechnicaldirector attheSteyr had taxedhisskillstoan unmanageableextent,thuspromptinghisreturn to of alargevarietymodels andthemanagementofnumerousproduction sites two competingcompanies andtheirdevelopmentdepartments.Theorganization ture. Ferdinand Porschethereforebecame trapped betweenthefronts ofthe 14 - -

© 2012 Michael Shamiyeh – www.porsche-prinzip-innovation.com vehicles. way —fromnowonasanindependentdesignerandconsultantforengines prowess atSteyreventuallyledtoFerdinand Porsche‘sdecisiontogohisown to amergerofautomakers.Thelackopportunitiesdevelophisinnovative Stock ExchangeledtothecollapseofAustrianbankingindustryandthus Benz „S“type.Source:ArchivePorscheMuseum dinand PorschebelowthesecondMercedesstaronleft.Therace endedwithatriplevictoryfortheMercedes- 1927: Grand PrixofGermanyattheNürburgring,awardceremonywithOttoMerzinStuttgart-Untertürkheim,Fer- This articlewas publishedfirstinAustroClassic #2013/03,p.84-91. 15

© 2012 Michael Shamiyeh – www.porsche-prinzip-innovation.com