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    Six things Formula One can teach us about business

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    Highlights

    If the similarities between your place of work and the formula one circuit escape you, 75 minutes in the company of two motor racing greats will soon put that right. There are business lessons to be learned from the racing track. At this year’s TCS Summit Europe the multiple grand prix winning duo Mika Häkkinen and David Coulthard were joined on stage by commentator, director and author Mark Gallagher.

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    Embrace failure the art of teamwork Don't forget UX The name on the door Manage business risk Manage personal risk

    1. Embrace failure (to ensure success) 

    “In motor racing,” explained Häkkinen, “most of the time it’s about losing,not winning.” His former teammate Coulthard brought this fact to life. “Michael Schumacher was the most successful driver in the history of Formula One. He won 90-plus grand prix but he raced in more than 300.” And because defeat is the default position, F1 drivers and teams spend a lot of time learning the lessons

    of failure. Why? Because it informs future success. “We spend very little time patting ourselves on the back when we win and lots of time analysing where the next failure will come from,” said Coulthard.

    2. Pit stops and the art of teamwork

    “We started using the pit stop as a strategic weapon in the 1980s,” explained Mark Gallagher. Back then the pit stop took around 25 seconds. Today, teams complete the task in a handful of seconds and just last June in Baku, Azerbaijan a record 1.89 second stop was recorded by the Williams team. The pit stop is a testament to teamwork – trust, practice and the ability to blend complementary skills and expertise. “It is all about marginal gains and continuous improvement,” said Gallagher.

    3. Don't forget UX

    Understand the customer. It’s a business mantra that’s brought to life by one anecdote from F1 as told by Coulthard. It is the story of a brilliant young designer charged with redesigning the team’s driving wheel. What the designer produced certainly looked the part – “a very tightly packaged work of art”, in Coulthard’s words – but the driver had doubts. He visited the designer in his comfortable, air-conditioned office and asked him to bring up the designs on the computer’s CAD system. While the designer located the file, Coulthard shook the back of his chair making control of the mouse all but impossible. “That’s the environment in which I work,” Coulthard told the designer. The lesson? “Always put yourself in the end user environment.”

    4. THE NAME ON THE DOOR DOESN’T GUARANTEE SUCCESS

    As the era of digital disruption has shown, it’s never wise to assume that the next competitor is going to come from a traditional source. In 2004 the unconventional competitor in F1 was Red Bull. It seemed counter-intuitive, at best, and laughable, at worst. What was this fizzy energy drinks company doing taking over an underachieving team in the complex technological world of motor racing? But expert leadership combined with judicious recruitment meant Red Bull did become a success. “It was a cultural change led from the front,” explained Coulthard who secured Red Bull’s first podium finish in 2005. “The name above the door doesn’t guarantee success. It’s always about the people within.”

    5. HOW TO MANAGE BUSINESS RISK

    In the mid-1990s tobacco accounted for 70 per cent of F1’s sponsorship revenue. A decade later, tobacco sponsorship was banned and F1 faced an existential crisis. At first it tried to replicate the monopoly sponsorship model but this led to an unsuccessful flirtation with

    the banking sector that would face its own existential crisis in 2008. Latterly F1 dramatically changed its model, selling races to governments around the world. This secured immediate investment but, more importantly, expanded the sport’s footprint and turning it truly global. The September 2016 sale of F1 to Liberty Media for $8bn reflects the success of this model, the opportunities new territories provide and the way the internet has changed the way we consume media – and watch our sports.

    6. HOW TO MANAGE PERSONAL RISK

    Business risk is one thing but personal risk is quite another. This difference was brought into sharp relief when Häkkinen’s car, travelling at 200kmph, hit a wall at the 1995 Australian grand prix.

    “I became just a passenger then,” recalled Häkkinen. “This accident did change me. I don’t think it made be slower but it made me think more. I didn’t rush, I was more relaxed, not so tense. I didn’t think, ‘I must win. I have to win’. And that made me a better racing driver.” Coulthard, who’s opportunity as a principle driver came following Ayrton Senna’s track death a year earlier, shares Hakkinen’s sentiments. “Trust is not something you turn on and off based on something that has just happened. It is built up over time,” he said. “There’s no point having the systems in place if you don’t trust the systems.”

    He added: “I’m risk averse. I’m really not that guy that jumps over the hill without looking at what’s on the other side but I think fear focuses the mind.”

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