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.

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 2008
1. Maintain Open and Constant Communication
During our research one concept was voiced by virtually all the individuals we
interviewed; that is, the importance of maintaining an open flow of communication
involving everyone in the organisation. This communication takes place both
formally 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 that
when something has gone wrong, the focus must be put on resolving the problem in
a systemic sense, rather than blaming the person. This is difficult to achieve in
practice. In many instances when a team falls onto difficult times it goes through a
period of blame to explain the failure. It is the ability to break out of this blame culture
which often signifies a period of further success. This can be stimulated by improved
performance, but to be sustained it has to be underpinned by a work environment
that allows failures to be shared and openly discussed by all.
3. Build the organisation around informal processes,
networks and relationships
Across all of the teams we found a common emphasis on building from the expertise
and relationships of the people within the organisation, and the partners allied to the
business. This approach enables the structure to emerge from these relationships,
rather than imposing a ‘theoretical’ organisation which is populated by rigid, specified
roles and job descriptions that do not relate to the pressurised world that Formula 1
teams inhabit.

2. Perhaps we could criticise those teams who do not have ready-to-hand
organisational charts or detailed job descriptions. Clearly these are important
aspects of modern organisational life. But in a situation where there is real
commitment and passion from employees, the lack of such management tools
illustrates how the organisation becomes ‘empowered’, by removing layers of
potentially needless bureaucracy.
In reality, we know that organisation charts rarely reflect how people in the business
actually 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 and
facilitate the potential of individuals and their relationships, rather than determining
and micro-managing such interactions. The conclusion that we reach is that, it is
only through effectively supporting these interactions and relationships through an
emergent structure that performance can be truly optimised.
In business management there is a mantra that, structure drives strategy which in
turn drives performance. In Formula 1, people and their relationships drive the
structure which in turn drives performance. Perhaps surprisingly for its strong
technology orientation, Formula 1 is a very people driven business.
4. Alignment of goals between individuals, teams and
partners
There are two parts to the issue of alignment. One is commonality of goals towards
which teams and sub-teams in the organisation are striving. The other is the
connection between the individuals’ actions and the end result. Perhaps this is best
illustrated in the way that Frank Williams constantly asks the question when signing
cheques: ‘How will it make the car go faster?’ against which all can measure the
value of their specific contributions on a day to day basis. From the Formula 1 team
partner’s perspective the question may be different, ‘Will it help us sell more
product?’ It is the continual alignment of these factors that help to optimise business
processes in Formula 1 teams.

3. 5. Focus, Focus, Focus
The rigour of a nineteen or twenty race season puts a heightened premium on getting
the right job done at the right time. It seems quite a basic concept, given the
industry’s often changing regulatory constraints, budgetary limitations under which
many teams operate, and very tight deadlines. Formula 1 teams must focus on the
tasks at hand in order to be on the grid with an improved car, week after week. Even
in this context, we have seen examples of where successful teams have lost their
focus, lost their edge and ultimately paid a very high price; perhaps most famously
through McLaren’s departure into high performance, limited edition road cars in the
early 1990s, (the McLaren F1).
Likewise, drivers who are facing great demands on their time have to learn to focus
on what truly matters, which in the end is performance on the track.
6. Make quick decisions and learn from the results
Seeing the opportunity, being decisive, and then learning from the result of one’s
actions is central to continual improvement of performance in this fast-paced
environment. These ideas fit closely with the concept of the learning organisation,
where continual experimentation and learning provides the basis by which firms
move forward. Formula 1 teams have to continually learn from their mistakes
otherwise 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 trying
something, and that failure does not undermine their position or credibility in the
organisation.
7. The real gains come at the boundaries
The real performance gains occur at the margins, at the boundaries between the
various interfaces, whether these are component areas of the car, between partner
organisations or between different teams and sub-teams. These are the gains that
are particularly difficult to achieve and sustain, but they are the ones that will make
the difference in performance, if all other areas are working effectively.

4. When teams are operating at the top of their game, their focus moves from building
up particular specialist competence, to integrating the whole system and ensuring
that it operates to the maximum. In order to deliver the best racing package silos
between functional departments must be eliminated so that communication between
and across them can be clear, constant and directed towards achieving their
common goals.
8. Be realistic about what can be achieved
Continual change is necessary in order to keep pace with competitors strategic
actions and customers ever-changing demands. However, change fatigue is not an
unusual problem in organisations today. One of the important lessons which can be
drawn from the recent success of Ferrari is that change in organisations has to take
place within realistic constraints, otherwise the development process may fall apart.
Setting high, but realistic goals and keeping everyone apprised of progress against
those goals is a key factor in driving the change process forward.
9. Never believe you can keep winning
1
The Icarus Paradox considers the problem of success blinding the organisation to
future threats. In considering the case of Ferrari, the trick appears to be to refuse to
believe that you are inherently capable of being consistently successful. Always
assume each win is your last victory and, therefore, you will continually search for
those extra tenths of seconds that will sustain you at the top. There is not a better
time 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 and
urgency to do so while retaining the energy and motivation that is so important for the
team. That is one factor why Ferrari has been able to build such a formidable record
in recent years.
10. Leaders exist at all levels of the organisation
Due to the fast pace of this industry, employees throughout Formula 1 teams are
empowered to make decisions, drive processes and take risks. We have witnessed
people at all levels within Formula 1 organisations stepping up to be accountable and
to lead their colleagues when it is their time to take responsibility.

5. This means that the more senior roles are concerned with problem solving and
connecting 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 are
prepared 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 the
team, encouraging everyone to play their part to achieve performance at the limit.
Lesson 11: Measure Everything
Formula 1 is first and foremost an engineering based industry. In that context, the
delivery of their key product, a fast Formula 1 car, is entirely contingent on design,
manufacture and refinement using the latest in software, telemetry and computer
capacity, to measure everything.
Measurement comes into play at the factory, in the pit lane, on the track and also, as
we have seen, in the physiological readings of the drivers. Like all people in
business, Formula 1 teams have to determine what useful information can be drawn
out of the massive amount of data that is captured. They must apply reasonable
thinking to utilise that information, to make strategic and tactical decisions. In turn,
those decisions need to evolve, usually very quickly, into actionable tasks. Once
delivered, the impacts of those tasks are measured, and the process starts over
again. Recording of input and measurement of output goes beyond the teams
themselves, and is the primary process by which sponsors determine whether their
investment 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 the
organisation, just like Formula 1 teams do.
Lesson 12: At the Edge, Not Over the Edge
This may be an obvious statement, but conflict within an organisation can undo all of
the strong efforts and goodwill that has been built to that point. Given the competitive
nature of the individuals in Formula 1 and the fact that they operate within a media
fishbowl, it is not uncommon that dirty laundry is aired in public.

6. Whether it has been an employee disgruntled because he was passed up for
promotion who then shares insider information with a competitor, or two drivers on
the same team who cannot seem to get along, the impact of their attitudes and
actions most certainly infect the organisation culture and eventually performance in a
negative way.
Organisations that have a culture where people feel free to share their thoughts with
peers and bosses without reprisal; organisations where managers are in touch with
their employees aspirations and development needs; and, organisations that foster
teamwork as a guiding value are less prone to find themselves operating with internal
conflict situations that will get out of hand.
1. Miller, D. (1990). The Icarus Paradox. New York: HarperBusiness.
nd
Taken from, ‘The Twelve Lessons’: PATL 2 Edition - Jenkins, Pasternak, & West –
Copyright 2008.