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Motorsport survival & growth: innovation on four factors bridging past and future

The link between innovation and Motorsport has been typically associated with the technological developments that increase performance and safety. Often, throughout recent decades, top level championships have been working as a challenging and effective research & development testing field. Several topics related to energy efficiency and preservation have been addressed by Motorsport regulatory technical boards, sometimes attracting interest and investments by major automotive manufacturers: at stake not only the technological research but also the brand association with a more sustainable way to conceive not simply automotive but mobility overall.

Jim Clark on Lotus 49... once upon a time...

Jim Clark on Lotus 49… once upon a time…

The Motorsport sustainability model: four factors

It is a matter of fact that Motorsport in order to survive and possibly grow (within an ever changing social, economic and market dynamics), cannot look at a sustainability operational model only from innovations linked to technology (no matter the amount of investments made by major manufactures), there are also at least three other factors that require dynamic innovations in order to make the overall Motorsport operational model sustainable: business, entertainment and passion for the sport (simply stated in alphabetical order).

While working on the research for a new book ( www.fasttrackinnovation.it ), I have been reading many first hand accounts related to the developments of Motorsport during the last 50 years and with colleagues I have integrated this with direct interviews to key players from the frontline or behind the scenes. So far we have been focusing mainly on the European context branching out into the USA and Indian ones. All of this has brought me to further appreciate the times (60s, 70s) when the equation of the four factor appeared to be set, in my opinion, along this order of relevance: passion for the sport, business, entertainment and technology.

Without passion no teams, manufacturers and drivers alike would have contributed to developing the popularity of the sport to date. Ferrari arose from a sense of passion rooted in the early car racing within Modena and its surrounding areas. Within Britain the Motorsport Valley arose from that passion that made overcome the necessity to squeeze at best all of the resources available to compete at the best possible levels. This passion fueled the rise of business and eventually an industry related to Motorsport.

Business in itself required to keep attracting attention and capitals from investors (back them mostly related to the automotive industry itself), hence the focus not only on technological advances (which pace of development was in relative terms much slower than the current one) but also on entertainment. Actually, it was important to manage at best this entertainment factor edging between gruesome danger claiming many lives (before Jackie Stewart’s determination to lobby to concretely improve safety) and glamour (back then Montecarlo was truly the top of game on this). Technology had no doubt its part but overall its influence was quite relative at a time when the influence of pure mechanics came ahead of rising aerodynamics concepts and the concept of applied electronics was still in its very early infancy to say the least.

Within all of this framework I found quite timely and intriguing a Motor Sport Magazine August 2015 Editorial by the title ‘From Jim Clark to Formula E’http://www.motorsportmagazine.com/magazine/from-the-editor/from-jim-clark-to-formula-e/ . It articulates the link between two extremely different Motorsport eras, yet eras that once again necessarily have to deal with the same four factors: business, entertainment, passion and technology. Innovation is needed within the overall business operational model featuring these four building blocks. At stake is the overall sustainability of Motorsport itself.

Innovating the four factors to sustain survival and growth

To innovate it means to develop creative ideas (not necessarily original, they can also represent a marked evolution from previous ones or ideas integrally coming from different fields) into concrete results. As Formula E exemplifies, innovation in technology is already in action fueled by overall technology sustainability and branding focuses by major automotive players. In my opinion key innovations are needed within the dynamics of the other three components that are all integrated and interlocked depending on a single key element: reignite the passion for the sport by target audiences.

There are many social, demographic and economic factors that lowered and are lowering that passion; yet it all can be related to a lessening of the entertainment appeal. Racing can still be quite thrilling and exciting (without lowering the safety standards that arguably have at time reached levels of excesses at the expense of the sport), yet nowadays are passion for the sport and entertainment the actual factors of focus for a sustainable business development? Within these dynamics there is the need to outline a model visionary enough to overcome the short term focus creating an overall sustainability well beyond the short term. Innovations relevant to the factors that have the most leveraging power for sustainability need to be implemented.

The right kind of leveraging?

I came to similar conclusions last year when I had the privilege to participate and enjoy a program that allows fans to fuel that passion by lapping at Daytona tri-oval with a Nascar (after that I have come to appreciate that racing on ovals is not simply making boring rounds! At this link a report on the experience…http://riccardopaterni.lifeplan.it/always-new-fun-challenge-this-time-lapping-at-daytona-with-nascar-at-265-kmh/ ). This is an example of innovation in programs that keep enriching fans’ passion (the program I attended begun a few years back yet no doubt represented a targeted innovation with specific industrial and commercial investments).

In addition, still in Daytona, I saw with my own surprised eyes the focus on making it easier for fans to access track entertainment: high-tech elevators being built to reach the top of the imposing world famous checkered grandstands: the show easy to reach (and at alluring prices). It does not matter if many of us observe that within the USA racing scene technological innovation is basically not existent from our European perspective. Passion for the sport is fuelled as well as entertainment and this makes it more concrete and reachable to develop a business model that, among unavoidable up and downs, keeps Motorsport as a sport and an industry in continuos development in the USA.

Is this the right kind of leveraging power to be utilized also in Europe? The debate is no doubt wide ranging, yet resolutive action overrides many of the sterile debates we are often so effective in articulating.

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Le Mans 2015. Once again innovation makes its mark from deeply set roots …

In 2014, at the Geneva International Motor Show, Porsche officially introduced in World Premiere the Porsche 919 Hybrid aiming to get the german manufactured back to the top of the World Endurance Championship (WEC) and in particular back to the top of the legendary Le Mans 24 Hours won the last time by the official Porsche racing team in 1998.

Framing a context for innovation: the rules

After 17 years, today – June 14 2015 – Porsche has won Le Mans (drivers: Hulkenberg, Tandy, Bamber) within the LMP1 top category. A category that during the last few years has been featuring considerable winning innovation in terms of all sorts of energy efficiencies set as standards by the governing body of the series (FIA).

Le Mans 2015 winners

Le Mans 2015 winners

Porsche with the 919 Hybrid has interpreted these energy efficiency rules through the development of an original project balancing several variables in order to fulfil the prescribed overall energy efficiency / high performances flow.The 919 Hybrid has won Le Mans: the 919 Hybrid has to be considered in definitive terms an innovative project since innovation does not flatly exist without success (in terms of problem solution or competitive affirmation – being on a market or a racing track).

Porsche and its historical roots of pragmatic innovation: 12 guiding principles & matching projects

Innovation is quite pragmatic because, in its essence, it springs from results (originality without results it is just creativity not innovation) and traditionally Porsche has been perceived as a household of pragmatic developments that have set a fine winning edge between top notch revolutionary / evolutive technology and a strong focus to take advantage and even set market trends. Quite interestingly Porsche has outlined innovation development within 12 principles that are represented by as many different projects that successfully made (and are making) their marks within the automotive and motorsport context since the late 1930s. This outlining is featured in a document titled Porsche Innovation essentially and mainly inspired by the talent and vision of Ferdinand Porsche. Interestingly the outline touches some key concepts that are part of the work-in-progress book I am currently writing together with two colleagues Fast Track Innovation; concepts that are drawn from different automotive and motorsport contexts. The first two principles are a preamble: 1) It all sources from Creative Ideas 2) born from the Freedom to Experiment. From the 3rd one onward they are associated with a specific project that has been successfully developed by the german manufacturer. 3) Shaping the Future (Project 22, 1934, the successful Auto Union Grand Prix single seater). 4) Grasping Visions (Project 60, 1938, the original Volkswagen that in itself created a successful market segment and identity strongly present still nowadays). 5) Team Excellence (Project 360, 1947, successful Cisitalia Formula One Grand Prix single seater). 6) Establishing Partnerships (Project 356, 1948, successful mid-engined sport car based on a Volkswagen chassis). 7) Fans Instead of Customers (Project 550, 1953, the open top sports car passion of many key popular personalities as for example James Dean – he died in a tragic accident while driving one of these models and this has become part of his legend). 8) Timeless Design (Project 911, 1963, a design that in itself has become an icon still strong after more than 50 years). 9) Radical Renewal (Project 917, 1969, the racing car that has won multiple times Le Mans and that is still nowadays passionately associated with Steve McQueen’s Le Mans movie). 10) Networking Innovations (Project 914, 1970, mid-engined production car based upon the active cooperation with other manufacturers). 11) Trusting Others (Project 928, 1977, front engined production car developed with the cooperation of more experienced know-how in the specific front end powered cars). 12) Discovering Strengths (Project 986, 1996, the mid-engined boxer production car developed upon the original combination of key strengths from previous projects). 

What next?

Innovation is a continuos process of development and growth. It is a mindset that is by nature placed ad the very edge of out-of-the-wall creativity and sound, scientifically based, pragmatic knowledge. No doubt that Porsche will continue to innovate and no doubt that the process will take time and focus;  it will be driven by the ‘rules of the system’ being the development rules set on racing tracks by the racing governing bodies or the rules set for safety and sustainability on roads worldwide.

All of this can be very inspiring for companies of all sorts of sizes belonging to all sorts of different economic fields; the work-in-progress book Fast Track Innovation will describe why and how and certainly will feature today’s Porsche 919 Hybrid as an example of an innovation DNA flowing throughout history. Well done to the entire Team Porsche and a particular well done to the incredible – F1 style – consistent drive of Nico Hulkenberg. 

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The culture of winning in F1. Effective organizational interdependence is once again in the making between McLaren and Honda?

Soichiro Honda was truly fond of Ayrton Senna and Ayrton had the utmost respect for him. Both of them had strong personalities that managed not to clash; rather they channeled energy and determination toward a common goal: winning and doing it in their own unique ways, many times risking everything, all of nothing sort of mindset, yet always learning and improving. In such regard it is significant one of Mr. Honda most popular quote has always been: Success represents the 1% of your work which results from the 99% that is called failure.

Soichiro Honda and Ayrton Senna

Soichiro Honda and Ayrton Senna

This has set the DNA of Honda as a company focusing on consistent innovation along unexplored pathways. Because of all of this it should come to no surprise what the McLaren – Honda team has been struggling with during the beginning of the current Formula 1 season. As described recently within the pages of the authoritative AUTOSPORT, Honda has gone radical while confronting the massive challenges and opportunities of the new Formula 1 hybrid engines regulations “Technical insight: Honda’s radical Formula 1 engine for McLaren” .

Besides, and this is another Honda organisational culture characteristic, the Japanese manufacturer has always preferred to develop know-how from the inside rather than importing it from the outside. In other words: there is method to their work, yet it is their very own method, it is their own way to work, test, explore, develop and apply knowledge. All of this can turn out to be either apparently messy from the outsider and/or time consuming at least in the early phases of a project development. Challenges and risks are probably tackled keeping in mind Soichiro Honda lessons. It is to be remembered that Mr.Hondas way, after many leaning-in-the-process failures, at last prevailed developing from nothing one of the most important automotive organisations in the world.

This is Honda DNA set to integrate with the McLaren one. During the last 30 years McLaren boss, Ron Dennis, has shaped an organizational culture characterizing it  by a relentless focus on winning. Winning through an organizational through a methodical, meticulous, almost paranoid organizational approach focusing on details; no much room for experimentation. To note that McLaren-Honda has scored utmost success during the late 80s and early 90s and this has been possibly the inspiring power to this renewed partnership.

Since then F1 has changed in many ways: everything is more complex, more challenging from a technical and managerial perspective, massive yearly investments in technology and marketing have overpowered the sport while little room has been left to actual experimentation and risk taking on the field (it is a matter of fact that today actual tests on track have been reduced to the very limit and by now it is more an entertainment vehicle to make money rather than a sport, hence its current struggles for identity and survival). Given this context Mr. Honda would have probably not even taken the F1 challenge, the current Honda management has decided otherwise and not they are tackling the challenge their own way.

McLaren Honda MP4-30

McLaren Honda MP4-30

The clash of cultures between McLaren and Honda has been at first simmering and then progressively rampant since the beginning of the new joint project (and it has all become even more quirky and mysterious with the still not fully explained Alonso crash at Barcellona during a preseason testing session) while results have been in dismal. Yet as recently pointed out by Eric Boullier (McLaren team Racing Director) McLaren itself has begun to learn to understand Hondas DNA and this has contributed to a perception of marked progress and concrete potential of the overall team still among dismal performances. As recently reported in AUTOSPORT “McLaren F1 team making strides in its understanding with Honda”

Soichiro Honda strong character has no doubt left a legacy within the company, McLaren seems to make the best out of this to reach the level of performance it consistently aims to. We will see the results; it is a very interesting process to follow. If McLaren will manage to keep in line the focus on the overall operational processes while Honda manages to express the best of its strength (technology in engines and making sure to not fail again into the chronic and eventually eroding lack of performance that characterized the life of its own team during the mid 2000s) surprising results could come soon.

To note also that Alonso and Button (even if they actually are working as a team) possibly do not have the team involving and contagious passion for a relentless quest of unique excellence that Ayrton a Senna and Soichiro Honda shared during the glorious world championship winning seasons.

Fernando Alonso and Janson Button

Fernando Alonso and Janson Button

Nevertheless, since in  organizations it is always awareness and interdependence of strengths from several parties that produces and reaffirms success, McLaren and Honda might have the ingredients to do that and might have begun moving in the right direction.

Eric Builler and Yasuhisa Arai

Eric Builler and Yasuhisa Arai

Stay tuned for thoughts regarding this intriguing developing story: soon we will share some reflections regarding the unique role that Eric Builler has in all of these dynamics and why only a person carrying his character and professional skills can spearhead an effective winning interdependence among McLaren and Honda very distinct organizational cultures.

An unfolding update to the story from Autosport on July 15th 2015: “Honda will not hire outside help to boost F1 effort with McLaren”  pointing out once more that Honda wants to develop the project without hiring any outside help. On one side this can slow the development process pace, on the other one it can strengthen the capability to achieve and sustain success in the mid to longer term. Now the plot thickens here: will it ever be a long term commitment to the project by Honda top people? The company seems to be more involved than ever to fend off issues related to automotive technical and, it is todays’ news, also financial services troubles in the USA “Honda to pay $24 million for discriminatory lending”. Overall this is not helping at all not only the balance sheets but also, and may be more relevant, the brand. How does F1 current troubles play within all of this? The legendary Sochiro Honda is no longer around to push ideas and action with his steely vision and determination and at the same time Bouiller is quite vocal also with the media (or may be mostly with the media) on pressing Honda to perform. I bet that things will unfold in a definitive direction or the other by F1 season’s end.

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Innovazione e performance alla portata di tutti, a patto che…

‘Panta Rei’! (tutto scorre). Il celebre aforisma di Eraclito oggi assume un doppio significato: da un lato l’inesorabile presenza del cambiamento; dall’altro la necessità di rapportarsi con questo cambiamento nel modo più fluido, scorrevole possibile, senza esserne travolti.

Oggi più che mai abbiamo il compito e responsabilità di essere non solo attori, ma anche produttori, registri e soprattutto scrittori del copione della nostra vita. Per questo osservare e riflettere su percorsi di vita di successo (dove il successo viene misurato con il riuscire ad esprimere il meglio di se, del proprio potenziale e farlo con consapevolezza).

Innovare nello scrivere e vivere questo copione, raggiungere il massimo delle nostre Performance nel farlo. Sono questi i temi guida dell’ebook appena pubblicato: “Innovare e Performance. Nella scia di Ayrton Senna: apprendere i fondamenti su come scoprire e dare il meglio di se” – autori Riccardo Paterni e Andrea Morici – Edizioni Lifeplan.

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L’ebook presenta una narrazione a due voci. Da un lato tratti salienti del percorso professionale del compianto tre volte campione del mondo di Formula 1; un percorso che mette l’accento sul modo originale e innovativo (perché efficace) che lui utilizzo’ per sviluppare la propria carriera. Dall’altro lato riflessioni, commenti e esercizi pratici ispirati da aspetti concreti di quella narrazione. Il tutto sviluppato per stimolare in noi un senso di consapevolezza, progettualità e conseguenti azioni costruttive.

Lo schema di pensiero riguardante aspetti di innovazione e performance si rapporta anche ad un contesto più ampio, organizzativo, con specifici piani d’azione da implementare.

E allora: ‘Panta Rei’! con una consapevolezza e progettualità che non sono solo alla portata dei campioni.

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Going global leveraging on three factors…

The conference I moderated at the University of Pisa on the topic International business development. Is there a common enlightening and empowering trait? featured interaction among the International MBA students and a panel of four entrepreneurs and managers active on the global market in different fields (mechanical industrial, fashion, new technologies applied to health management and improvement, services for patent and innovation development) from the start-up to the major corporation.

Innovation. Teamwork. Talent

Innovation. Teamwork. Talent.

Three have been the common traits emerging strongly from the debate: innovation, teamwork, talent. All of them related to the overall need to create value in the perception of the customer, and the customers are not all alike even within the same sector.

Innovation. It is not just fashionable or trendy, it is a must demanded by a market in continuos dynamic evolution and increasingly  demanding from several points of view. Innovate to personalise to the customer needs while increasing efficiency and managing to slow down a progressive, almost inevitable, shrinking of operational margins almost across all of the sectors.

Teamwork. It is increasingly the essential leverage to performance. Both at the technical or managerial level, without the ability to lead stimulating actual teamwork turns into an ineffective and dangerous for survival waste of resources.

Talent. Creating value through innovation and teamwork nowadays depend on talent. The ability to express top level performance in a consistent way. To note that within the debate we have had different perspectives on talent selecting and managing: is it better to have top talented people with low interpersonal skills (even nasty) or talented-tending-to-average people with effective interpersonal skills? Some have had no doubt: it is part of the job description of a manager to handle ‘nasty’ talent and make it effective even within teamwork. Some have stated that in any case the development and focus on international skills for anybody is paramount.

The interaction among professionals and the MBA participants has been strong, stimulated by all of this. Overall a concept has been clear: international markets are changing and shifting at an increasingly speed. There is the need to consistently analyse where is the best place, the best contexts, where to develop production, sales markets, financing projects.

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