Panke Exits at the Top
There’s a saying among insiders at BMW: “We prefer to leave the party before its over.” No kidding. BMW Chief Executive Helmut Panke will depart on Sept. 1 as he turns 60, the company’s mandatory retirement age — in the midst of an incredible success streak. The energetic physicist has steered BMW like pro through the company’s fastest expansion ever. Car sales rose 44% to 1.3 million vehicles under Panke’s four-year watch and revenues grew 21% to $59 million — while markets in Europe and the US stagnated and many other automakers such as Mercedes and Volkswagen floundered. Analysts forecast a $5 billion operating profit for 2006 — more than double the earnings in 2001, the year before Panke took control.
Panke is a CEO most boards would die to keep. So why let him go? BMW’s controlling shareholder, the Quandt family, has an abiding belief in giving talented people responsibility early and moving them up the career ladder at lightening speed — when the prove they can cut it. Panke’s 24-year career is a classic case. The 60-year limit keeps people moving steadily up the ranks and motivated, creates an incredibly strong bench and refreshes the company’s vision. It’s a kind of balanced eco-system.
Perhaps most important, a regular changing of the guard keeps companies nimble. Everyone knows how hard it is to change the legacy of a CEO who’s been around for 10 years or longer. Car chieftans today must be able to innovate and change course faster than ever before as tastes shift and competition from Asian automakers intensifies. Ossification at the top is a subtle but real danger.
That said, many will be sorry to see Panke go — as sorry as the CEO himself, who admitted he would love to stay on as “captain” of the team. No manager at any car show or model launch matched his boundless enthusiasm for discussion be it models, financial performance, factories or the auto industry. Panke’s affable nature, razor-sharp intelligence and penchant for straight-talk made it a delight to engage with him. I once followed him all evening during a press dinner for the launch of the new 3 Series in Valencia. As Panke moved from a table of Germans, to a table of English speakers, to a table of Asians, he didn’t lose one electron of energy or passion in answering what turned out to be the same set of questions over and over.
As Panke hands over the keys to CEO-designate Norbert Reithofer, BMW is in top condition. And given his abundant talent, I’m sure Panke will find another party where he can boogy in the months to come.