http://www.e38.org/1997Manual-7Series.pdf
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Page 49 (page 50 in Adobe)
In order to make it easier to get into and out of the car, the steering wheel automatically moves into the top position and returns to the driving (memory) position.
This automatic feature is controlled by the position of the ignition key and by the driver's door.
You can make the settings of your vehicle in such a manner that, when you unlock the car with your personalized remote control, your own personalized steering wheel adjustment is initiated.
Page 51 (or page 52 in adobe)
You can store and call up three different seat, exterior mirror and sterring wheel positions.
The illustration (refer to link above for manual), show the buttons on the driver's door, for making these position adjustments.
>The adjustment for the lumbar support is not in the stored memory.
To store:
1 Turn the ignition key to position 1 or 2
2 Adjust for the preferred seat, exterior mirror and steering wheel postions
3 Press the MEMORY button: The indicator lamp in the button lights up
4 Press memory button 1, 2 or 3, as desired: The indicator lamp goes out.
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It sounds like it has something to do with ignition position 0 and the door being open. If that doesn't work try position 1 and open the door and then remove the key. I recall my mom having some difficulty getting this feature to work on her 06 Ford Expedition Eddie Bauer. She wanted me to have a look at it but I never got around to it.