Strategy And The Racetrack – The Formula 1 Analogy
'Winning By A Nose' – The Importance Of Direction & Focus For Teams
Some people think Formula One Car racing is all about speed. But they are mistaken. The same principle applies in strategy, where the power of your and marketing performance is determined greatly by its precision.
Listen to any Formula One champion (such as that shown below) and they will tell you that winning it is about precision, as much as speed. The parallels with selling and growing are real.
Any seller who has experience of a poorly targeted effort, campaign or a proposition that doesn’t quite hit the mark, knows all too well the importance of precision. However in the race to meet target, precision often get sacrificed for speed. The implications can be considered with reference to the race circuit.
First There Was Speed…
In the 1960’s Formula One racing was about speed and little else. The following quote by Ferrari’s founder is representative of a time when building a bigger more powerful engine was key to race success.
Enzo Ferrari’s engine obsession is long out-of-date. The quote dates from a time before the importance of car aerodynamics was understood fully. Furthermore, in modern racing, engine size and power is standardized across all teams. There are even requirements in terms of fuel efficiency. All that puts the precision of the driver and the car center stage.
It’s Not A Straight Line!
Speed is important. But unless you are going in a straight line, it is not the only factor. There is no point in accelerating in the wrong direction, or in all directions at once.
The irony is that racing is as much about speeding up as it is slowing down. Just look at the following statistics for the Monte Carlo circuit. The driver is at full throttle for just 53% of the time!
Want to understand why speed isn’t everything in Formula One, well it has a lot to do with the layout of the racing circuit. The best way to explain is by comparison with NASCAR (e.g. Daytona 500) where the tracks are symmetrical loops, with few sharp corners. In Formula One the opposite is true – race circuits include complex twists and turns (both left and right) that test driver stamina and skill. As the diagram below suggests you could think of the NASCAR circuit as the routine sale and the Formula One circuit as the complex sale.
In Formula 1 There is precision in every turn – the diver instinctively knows when to brake on approaching a corner and to accelerate out of a corner. If you loose traction then speed is futile, even dangerous. Getting the right balance of speed, precision and skill is key.
The Perfect Balance
High speeds and sharp corners mean that drivers are taking their car ‘to the edge’ – hurtling the car around corners at high speed close to the point where it might take off and fly through the air. The car has to be perfectly balanced front and rear – it is the balance between power and precision (between strategy and implementation) that is key.
Anybody who has driven a powerful rear engine car knows what can easily happen when the back end and the front end of the car get out of line. The back will try to pass out the front of the car sending the car skidding in the wrong direction – it is called oversteer.
How Well Balanced Is Your & Marketing?
In organizations with powerful engines, ensuring that the back wheels don’t lose traction with the track is key. Another word for this is alignment.
Alignment works on a number of levels. It is alignment between the strategy and the activity on the ground, in particular how the product and messaging strategy is being applied in terms of the calls and proposals that are being generated. But is also about alignment on a more basic level – the fit between the product/messaging and the market.
How Precise Is Your Targeting & Messaging?
The power or capacity of the engine to deliver the results required is a function of the precision of targeted messages and propositions. That can be measured in terms of the degree of traction in the chosen markets and segments.
The front of the racing car looks a lot like an arrow head. It needs to be pointed precisely where the car needs to go. In terms it needs to point in terms of the ideal target customer, or sweet sport customers and segments. This depends on how accurately defined those customers and opportunities that the organization wants in its pipeline are defined and most important of all progressed through its pipeline and into its order book.
Getting Out Of Alignment Is Easy!
Aligning the proposition (positioning, messaging and product) with the selected target customer segments is key (as shown above). That sounds obvious, however it can present real challenges.
Precision requires continual adjustment – the once perfect fit between the proposition and the market won’t stay perfect for long. Market conditions can change, either in terms of the moves of a competitor or the changing needs of the customer.
Perfect alignment also requires discipline for sellers to focus only on chosen customers and segments – poor targeting, profiling and pre-qualification can send the seller in several directions at once. The result is a ‘one proposition fits all’ or ‘everybody is a potential customer’ trap.
The Need For Visibility & Control
Getting the balance right between the back and the front of the car requires visibility and control. Perfect alignment is a measure of the intelligence, sophistication and responsiveness of , marketing, operations, customer services and finance.
A racing car has information systems that feedback back instantly to the driver and to the rest of the team on the level of speed, traction and general performance of both the engine and the car. The pity is that most sellers cannot look at a dashboard to see how they are performing, including market traction (e.g. the response rate to and marketing campaigns/messages), conversion rates at different stages of the circuit/process and so on.
What Is Your Focus?
So where are you focused as a manager in order to accelerate ? Are you like Ferrari (i.e. focused on speed), or Fittapalidi (focused on precision)? Or perhaps you are committed to investing equally in both.
In many organizations there is a tension between the two (i.e. power and precision) – one that is intensified by the pressure to meet target and the race to the end of quarter or end of year.
There has to be time for precision even in the mist of the most frantic campaign because as a racing driver might say: ‘you cannot always have your foot on the accelerator’.
There is another aspect of the front of the car that is key to balancing power and precision – focus and ambition. We call it ‘winning by the nose‘ – you can find out more about that here. The Strategy Pit-Stop is used by teams to balance power and precision.