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KEYNOTE: The Twelve Lessons by Richard West


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The Twelve Lessons: Converging Worlds - where Formula 1 Motor Racing and Business Meet.....

This document provides the 12 key lessons as presented by Richard West, our closing Keynote at the Business Discovery London event held on 22nd November 2011.
With a highly successful technical and commercial career behind him in international Motorsport and Formula 1 motor racing, and in more recent years as a speaker, Richard has turned his interests towards explaining how the most successful frontline Formula 1 teams today use innovative technologies, free flow of data and information, clear communication and collaborative decision making to hone their competitive edges. In his closing session he will give a compelling insight into the world of Formula 1 and illustrate how this fast moving sport uses a combination of human resources, technology and teamwork to achieve success.

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KEYNOTE: The Twelve Lessons by Richard West

  1. 1. ‘THE TWELVE LESSONS’ Taken from: ‘Performance at the Limit – Business Lessons from Formula 1 Motor Racing’ (The Second Edition) Published by Cambridge University Press - © Jenkins, Pasternak & West 20081. Maintain Open and Constant CommunicationDuring our research one concept was voiced by virtually all the individuals weinterviewed; that is, the importance of maintaining an open flow of communicationinvolving everyone in the organisation. This communication takes place bothformally and informally, on a small and large scale, in-person or virtually.2. Isolate the problem not the person: The no-blame culture.Here we pick up on WilliamsF1’s Team Manager Dickie Stanford’s comment thatwhen something has gone wrong, the focus must be put on resolving the problem ina systemic sense, rather than blaming the person. This is difficult to achieve inpractice. In many instances when a team falls onto difficult times it goes through aperiod of blame to explain the failure. It is the ability to break out of this blame culturewhich often signifies a period of further success. This can be stimulated by improvedperformance, but to be sustained it has to be underpinned by a work environmentthat allows failures to be shared and openly discussed by all.3. Build the organisation around informal processes,networks and relationshipsAcross all of the teams we found a common emphasis on building from the expertiseand relationships of the people within the organisation, and the partners allied to thebusiness. This approach enables the structure to emerge from these relationships,rather than imposing a ‘theoretical’ organisation which is populated by rigid, specifiedroles and job descriptions that do not relate to the pressurised world that Formula 1teams inhabit.
  2. 2. Perhaps we could criticise those teams who do not have ready-to-handorganisational charts or detailed job descriptions. Clearly these are importantaspects of modern organisational life. But in a situation where there is realcommitment and passion from employees, the lack of such management toolsillustrates how the organisation becomes ‘empowered’, by removing layers ofpotentially needless bureaucracy.In reality, we know that organisation charts rarely reflect how people in the businessactually work together or, relate to one another in terms of getting tasks completed.The Formula 1 organisation is an emergent structure that is designed to optimise andfacilitate the potential of individuals and their relationships, rather than determiningand micro-managing such interactions. The conclusion that we reach is that, it isonly through effectively supporting these interactions and relationships through anemergent structure that performance can be truly optimised.In business management there is a mantra that, structure drives strategy which inturn drives performance. In Formula 1, people and their relationships drive thestructure which in turn drives performance. Perhaps surprisingly for its strongtechnology orientation, Formula 1 is a very people driven business.4. Alignment of goals between individuals, teams andpartnersThere are two parts to the issue of alignment. One is commonality of goals towardswhich teams and sub-teams in the organisation are striving. The other is theconnection between the individuals’ actions and the end result. Perhaps this is bestillustrated in the way that Frank Williams constantly asks the question when signingcheques: ‘How will it make the car go faster?’ against which all can measure thevalue of their specific contributions on a day to day basis. From the Formula 1 teampartner’s perspective the question may be different, ‘Will it help us sell moreproduct?’ It is the continual alignment of these factors that help to optimise businessprocesses in Formula 1 teams.
  3. 3. 5. Focus, Focus, FocusThe rigour of a nineteen or twenty race season puts a heightened premium on gettingthe right job done at the right time. It seems quite a basic concept, given theindustry’s often changing regulatory constraints, budgetary limitations under whichmany teams operate, and very tight deadlines. Formula 1 teams must focus on thetasks at hand in order to be on the grid with an improved car, week after week. Evenin this context, we have seen examples of where successful teams have lost theirfocus, lost their edge and ultimately paid a very high price; perhaps most famouslythrough McLaren’s departure into high performance, limited edition road cars in theearly 1990s, (the McLaren F1).Likewise, drivers who are facing great demands on their time have to learn to focuson what truly matters, which in the end is performance on the track.6. Make quick decisions and learn from the resultsSeeing the opportunity, being decisive, and then learning from the result of one’sactions is central to continual improvement of performance in this fast-pacedenvironment. These ideas fit closely with the concept of the learning organisation,where continual experimentation and learning provides the basis by which firmsmove forward. Formula 1 teams have to continually learn from their mistakesotherwise they soon fall off the pace, and lose the interest of their sponsors.But to work it also requires a culture where individuals are not constrained from tryingsomething, and that failure does not undermine their position or credibility in theorganisation.7. The real gains come at the boundariesThe real performance gains occur at the margins, at the boundaries between thevarious interfaces, whether these are component areas of the car, between partnerorganisations or between different teams and sub-teams. These are the gains thatare particularly difficult to achieve and sustain, but they are the ones that will makethe difference in performance, if all other areas are working effectively.
  4. 4. When teams are operating at the top of their game, their focus moves from buildingup particular specialist competence, to integrating the whole system and ensuringthat it operates to the maximum. In order to deliver the best racing package silosbetween functional departments must be eliminated so that communication betweenand across them can be clear, constant and directed towards achieving theircommon goals.8. Be realistic about what can be achievedContinual change is necessary in order to keep pace with competitors strategicactions and customers ever-changing demands. However, change fatigue is not anunusual problem in organisations today. One of the important lessons which can bedrawn from the recent success of Ferrari is that change in organisations has to takeplace within realistic constraints, otherwise the development process may fall apart.Setting high, but realistic goals and keeping everyone apprised of progress againstthose goals is a key factor in driving the change process forward.9. Never believe you can keep winning 1The Icarus Paradox considers the problem of success blinding the organisation tofuture threats. In considering the case of Ferrari, the trick appears to be to refuse tobelieve that you are inherently capable of being consistently successful. Alwaysassume each win is your last victory and, therefore, you will continually search forthose extra tenths of seconds that will sustain you at the top. There is not a bettertime to challenge one’s processes and methods, or business strategy for that matter,than when leading the industry. The really hard part is maintaining the pressure andurgency to do so while retaining the energy and motivation that is so important for theteam. That is one factor why Ferrari has been able to build such a formidable recordin recent years.10. Leaders exist at all levels of the organisationDue to the fast pace of this industry, employees throughout Formula 1 teams areempowered to make decisions, drive processes and take risks. We have witnessedpeople at all levels within Formula 1 organisations stepping up to be accountable andto lead their colleagues when it is their time to take responsibility.
  5. 5. This means that the more senior roles are concerned with problem solving andconnecting up different parts of the organisation, rather than coaching or directing.At times this can be problematic particularly where big egos are not in short supply,but the lesson here is to recognise that in the most successful teams people areprepared to put their heads above the parapet and lead their project or initiative.Also, in these contexts, the drivers are not prima-donnas but real catalysts for theteam, encouraging everyone to play their part to achieve performance at the limit.Lesson 11: Measure EverythingFormula 1 is first and foremost an engineering based industry. In that context, thedelivery of their key product, a fast Formula 1 car, is entirely contingent on design,manufacture and refinement using the latest in software, telemetry and computercapacity, to measure everything.Measurement comes into play at the factory, in the pit lane, on the track and also, aswe have seen, in the physiological readings of the drivers. Like all people inbusiness, Formula 1 teams have to determine what useful information can be drawnout of the massive amount of data that is captured. They must apply reasonablethinking to utilise that information, to make strategic and tactical decisions. In turn,those decisions need to evolve, usually very quickly, into actionable tasks. Oncedelivered, the impacts of those tasks are measured, and the process starts overagain. Recording of input and measurement of output goes beyond the teamsthemselves, and is the primary process by which sponsors determine whether theirinvestment in the sport provides the returns they are seeking.Whether a business is using scorecards of some sort or re-engineering techniques,they are embracing a model of measurement, evaluation, and action in theorganisation, just like Formula 1 teams do.Lesson 12: At the Edge, Not Over the EdgeThis may be an obvious statement, but conflict within an organisation can undo all ofthe strong efforts and goodwill that has been built to that point. Given the competitivenature of the individuals in Formula 1 and the fact that they operate within a mediafishbowl, it is not uncommon that dirty laundry is aired in public.
  6. 6. Whether it has been an employee disgruntled because he was passed up forpromotion who then shares insider information with a competitor, or two drivers onthe same team who cannot seem to get along, the impact of their attitudes andactions most certainly infect the organisation culture and eventually performance in anegative way.Organisations that have a culture where people feel free to share their thoughts withpeers and bosses without reprisal; organisations where managers are in touch withtheir employees aspirations and development needs; and, organisations that fosterteamwork as a guiding value are less prone to find themselves operating with internalconflict situations that will get out of hand.1. Miller, D. (1990). The Icarus Paradox. New York: HarperBusiness. ndTaken from, ‘The Twelve Lessons’: PATL 2 Edition - Jenkins, Pasternak, & West –Copyright 2008.