Performance at the Limit: Business Lessons from Formula 1 Motor Racing

Performance at the Limit: Business Lessons from Formula 1 Motor Racing

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Product Details

ISBN-13: 9781107384989
Publisher: Cambridge University Press
Publication date: 04/23/2009
Sold by: Barnes & Noble
Format: NOOK Book
File size: 5 MB

About the Author

Mark Jenkins is Professor of Business Strategy at Cranfield School of Management. He has twenty-one years' experience as a teacher and consultant in the areas of competitive strategy, knowledge management and innovation. He has undertaken research on the performance of Formula 1 teams since 1997.
Ken Pasternak delivers seminars for executives and advises banks and businesses in the areas of leadership and management, organisation development and teamwork. Based in Helsinki, his activities are focused in the USA and Europe, plus the CIS and other emerging economies. Previously, he worked for Citibank and the European Bank for Reconstruction and Development.
Richard West is a trained former automotive mechanic who transferred to the commercial side of Formula 1 motor racing in the early 1980s. During his career, he has worked with the McLaren, Williams and Arrows F1 teams as well as holding a Directorship of the Le Mans and Daytona 24 Hour Jaguar sports car teams. He successfully revitalised the British Touring Car Championship between 2000 and 2004 and in his career has raised in excess of 165 million dollars worth of sponsorship. Today he works as a keynote speaker and presenter for a growing range of national and international clients and has co-authored two books on the business of Formula 1 as well as co-presenting the BBC World TV series 'Formula for Success'. He is also frequently called upon as a facilitator and mediator at high level conferences.

Read an Excerpt

Performance at the Limit

Cambridge University Press
0521844002 - Performance at the Limit - Business Lessons from Formula 1 Motor Racing - by Mark Jenkins, Ken Pasternak and Richard West

The Grand Prix experience

As part of the research process for this book we were able to visit a Grand Prix during the 2004 season. What follows are some observations and impressions from what was for us a very memorable experience. There are two perspectives to the Grand Prix experience, the public, external world of the fans and the insider's view of those who either work there or are privileged enough to be allowed inside the inner workings of the Formula 1 world.

The external world at the circuit includes the public grandstands, vending areas, programme sellers, campsites, huge parking areas and tens of thousands of people hoping to catch a glimpse of their favourite driver or perhaps celebrity drawn to the glamour, excitement and extensive press coverage of these events.

The internal world exists within an area controlled by FOM (Formula One Management). Entry requires an electronic security pass issued by them. This is the World (with a capital W) of Formula 1 - the teams, drivers, media, agents and myriad movers and shakers within the sport. In this World - no pass, no entry!

This 'exclusivity' is what sponsors, guests and VIPs expect. It is a place where deals are cut, partnerships developed and, sometimes, where relationships are ended. It is a hive of international sporting power brokers and business men and women that buzz around the racing event itself.

The paddock is also where the tyre companies' stock of racing tyres and fitting facilities are based, the teams' racing car transporters and the multipurpose race hospitality areas and team working areas all congregate. Add in the ever present silver and grey coach with its tinted windows belonging to ringmaster Bernie Ecclestone, where countless people wait patiently for an audience with motorsport's most powerful man, then this is the Formula 1 not seen by the fans attending the race and to which the vast television audience may only get to see small bites.

In April 2004 the authors arrived at the Circuit Dino Ferrari in Imola Italy for the twenty-fourth San Marino Grand Prix. Walking past the first security gate, we were greeted by rows of immaculate articulated trucks, vans and rigid-sided vehicles decorated in the various teams' colours and designs. These are the 'workhorses' that bring pit equipment, spares, bodywork, fuel and countless other items of equipment to each of the European Grands Prix.

The scale of 'the show' is simply enormous. When watching a 'long haul' Grand Prix such as Brazil or Australia, just consider for one moment that in terms of actual content, everything present at a European Grand Prix in addition to all of the equipment as yet unseen in the garages and main paddock area has to be packed, boxed and transported to a central airport, then flown across the world in several Boeing 747 freighters, it is then unloaded, customs cleared and transported to the circuit for use before being reloaded and then sent back to the teams individual HQs.

Throughout Europe, this fleet of trucks, vans and mobile hospitality areas makes their way on a weekly basis. For the 'long haul' races to other continents, their entire contents (although not the units themselves) and much more besides are flown as described above.

Teams of people now arrive a week in advance of the races to set up the huge team hospitality units in the paddock area. The positioning of these units, racing car transporters and mobile workshops is closely overseen by an FOM representative. The team that won last year's World Championship locates itself at the entry to the pit lane and after that there is a clear pecking order progressing onward as each team installs itself in a garage. In Formula 1, image and performance go hand in hand.

Such is the attention to detail in paddock layout, that it is possible to run a measure along the front of the trucks and motorhomes and find them millimetre perfect.

When first entering the paddock via the electronic pass reader system, the visitor is confronted by a truly astounding sight. Backed up to the pit garage complex underneath several floors of VIP observation boxes, administration and media centres and at most venues, the rooftop Paddock Club where several thousand VIPs are hosted by the range of teams, sponsors and manufacturers involved in Formula 1, are the race teams' transporters.

These vehicles are specifically designed and manufactured not just as transportation for the racing cars and their spare parts, but also as mobile workshops, data management suites and meeting and briefing rooms. Once in position they are adorned with extremely high telemetry and radio communication masts and throughout the weekend are endlessly polished and cleaned by the 'truckies' who drive them to and from events.

Step inside the race teams' garages and you enter another, very different, world. Painted and, in some cases, tiled floors, complete wall-to-wall panelling featuring images, the team's names and sponsors, digital clocks and weekend timetables all topped off with custom made overhead gantries carrying heat, light, power, compressed air - it is simply a workshop created for a weekend to the very highest standards, always mindful that the world's media and TV are watching.

Exit the garages, walk along the sides of the trucks and the opposite side of the 'corridor' is lined with the teams' motorhomes. The word 'motorhomes' does not do these justice. They are in fact double-decked structures with a central area enclosed with glazed windows and decorated to the very highest standards. They feature every conceivable luxury extra, including air conditioning, flat screen plasma TV displays, private office and larger meeting rooms and a level of catering and a level of customer service that would be the envy of most restaurants!

Placed at the rear of these team 'centres' and mainly out of view from the guests and VIPs are the catering units that provide constant food, drinks, breakfast, lunch and dinner as required. Quite simply the teams are self-sufficient from the moment they step foot inside the circuits.

Whilst all of this embodies the 'I' word (image), the teams themselves are of course there to race. In amongst the deal brokering, VIP and sponsor tours and endless meetings, the drivers, engineers and mechanics have to concentrate upon practice, qualifying and the actual race meeting. Their schedule is another work of precision drafting with a clearly defined timetable as shown in Figure 1.

As the weekend progresses, the pressures increase. Friday is a time for circulating the paddock, searching out specific people and journalists, catching up on the latest 'word' on the street.

Come Saturday, and the mechanics, tyre fitters, engineers and drivers can be seen moving from motorhome to garage, garage to media meetings, back to motorhomes for lunch and, if required, sports therapy. There is practice and there is qualifying - the need for pole position (the front of the starting grid) occupies everyone's mind and at the end of

Image not available in HTML version

Figure 1. Guests' timetable San Marino Grand Prix 2004
Source: Minardi F1

qualifying on this weekend in April 2004 it was not a Ferrari, it was Jensen Button in his BAR that took the glory.

The paddock is alive with journalists, alive with beaming BAR staff and David Richards, the Team Principal, standing outside his motorhome, shaking hands and enjoying a celebratory cigar. Button alongside him continues to smile long into the afternoon ...

For the drivers and team principals, assisted by their marketing and PR teams, Saturday evenings usually mean official sponsor dinners, guest appearances and drinks parties. Whilst sometimes onerous, all recognise the importance of these events and undertake them professionally.

Sunday, of course, is the longest and most important day. Arrive early enough and you will see the first people (motorhome staff) arriving and opening up their various 'HQs' for the day ahead.

Shortly after, engineers, mechanics, team managers and drivers arrive. (The team principals are never far behind!) Suddenly, the paddock is abuzz, the 'truckies' are giving the race transporters one final polish, the drivers, now focused, still stop and smile for photographs and autographs, the journalists continue to search for one more quote and Bernie Ecclestone can be seen frequently going from motorhome to motorhome ensuring the show runs faultlessly.

Amidst the noise, energy, sights, smells and sounds, one becomes increasingly aware of the crowd, the paying public who for hours have driven, camped, walked to see their favourite stars in action. Increasingly with Ferrari's continued success, the sea of red has grown to a point where at some circuits you begin to wonder if there is anyone other than Ferrari supporters present!

At Imola, they wait with air horns, flags, fireworks and banners and thirty minutes before the start of the race when the pit lane officially opens they begin to cheer. As we are in Italy the sea of red supporting Ferrari is a dominant vista across the grandstands. Earlier in the day, the drivers completed a lap of the circuit on the back of a flatbed articulated trailer. They wave and the crowds cheer them, but this is nothing compared to the noise of the engines and the combined sound of the crowd as they wave them out with just minutes to go before the start of yet another Grand Prix ...

Exactly on the hour, the cars are flagged off on their final warm-up lap to complete one lap under controlled conditions, the pole sitter leads them all round, each car weaving its way across the circuit to warm up the tyres and forming up for the grid where seconds later the red lights come on in sequence, go out as one and the San Marino Grand Prix at Imola is underway.

The paddock is now quiet, everyone is focused on the track but one thing never changes, the deadline for the next race. Teams of motorhome workers have already begun to pack the items that are no longer required. The Grand Prix 'circus' is packing up and heading for Barcelona in two weeks' time ... the show goes on!

1 Introduction

This is not a book about the sport of Formula 1. It is not about racing cars, commercial sponsorship or the politics of motorsport. It is about something that we believe to be far more important and enduring. This book focuses on the problems of sustaining organisational performance in dynamic and competitive environments. We are concerned with how organisations achieve performance levels at the limits of their financial, technological and human potential. It is a book that considers the turbulent ride between outstanding success and humiliating failure and explores the reasons for such outcomes.

To survive and prosper the organisation of today has to be both lean and agile, creative and efficient, effective at recruiting, motivating and retaining the highest calibre of staff, and also able to restructure and redeploy these individuals into teams across a range of challenging tasks and locations. Such demands are accepted as part of the dynamic business environment of today.

However, the ways in which such management challenges are met and addressed are rarely examined in detail. Whilst there is a wide range of work that has considered generic issues such as best practice and performance across many global industries, these often lack the specific insight to help deal with such challenges on a day-to-day basis. In this book we offer a different approach. We do not attempt to distil generic characteristics of performance success across a range of business contexts; this has already been effectively done in a range of management texts such as Peters and Waterman29 and Collins and Porras12. Our agenda is to examine a highly specialised industry in depth; we do so because we believe that this particular industry encapsulates many of the challenges faced by today's manager across many different types of organisation and sectors. Challenges such as increasing knowledge creation and transfer, working in global and virtual teams, managing across boundaries, enhancing innovation and creativity, accelerating speed to market, effective execution of strategy, creating transformational change and, above all, through all of these challenges, creating sustained levels of performance that competitors are unable to match. Many of these issues have already been considered in management texts such as Richard D'Aveni's work on hypercompetition13 and Shona Brown and Kathy Eisenhardt's consideration of fast-paced organisations that are highly adaptable and responsive to change.10 We are not claiming that the detailed issues we examine provide quick transferable solutions to other organisations, or that we are able to prescribe easy panaceas, but we do believe that our case histories and examples provide both inspirational and instructional guidance to those seeking to achieve levels of performance - at the limit of possibility.

We draw on accounts of ambition, wealth, enduring relationships and most of all, levels of passion and commitment that are inspirational to those involved in shaping and managing organisations. In this chapter we first outline some of the key insights we have drawn from our study, we then describe the research process we have adopted and conclude with a statement on the overall purpose of the study. In Chapter 2 we outline why we have used the world of Formula 1 motorsport as a basis for understanding the dynamics of organisational performance, including an overview of the history and structure of the Formula 1 industry that provides our research context. In Chapter 3 we go on to introduce the central framework of the book and identify some of the key elements of the performance framework. In the subsequent chapters we then explore each of these elements before elaborating some of the more generic lessons that can be drawn for those concerned with organisational performance outside the context of Formula 1.

But first as a preview of our findings, which are developed in detail in Chapter 12, we present the core characteristics of an organisational system (we use this term to emphasise the role of partner organisations in creating performance outcomes) that achieves 'Performance at the Limit'. We do not purport these factors to be necessary or adequate in themselves, however we found these to be central in the success of Formula 1 teams and the general distinctiveness of the industry.

Characteristics of performance at the limit

· Maintain open and constant communication. A constant flow of open communication to all in the organisation is critical to ensure

© Cambridge University Press

Table of Contents

List of figures; List of tables; Acknowledgements; Note on the reference system; The Grand Prix experience; 1. Introduction; 2. Why Formula 1 motor racing?; 3. The performance framework; 4. The war for talent: the people in Formula 1; 5. Winning through teamwork; 6. Capability through partnerships; 7. The high performance organisation; 8. Integrating: effective leadership brings it all together; 9. Innovating: the drive for continual change; 10. Transforming: breaking out of the old ways; 11. Achieving and sustaining performance; 12. Twelve business lessons from Formula 1 motor racing; Appendix A. Grand Prix champions 1950–2007; Appendix B. Grand Prix graveyard 1950–2008; Appendix C. Interview respondents; References; Index; Colour plates 1-8 between pages; Colour plates 9-16 between pages.

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