In part 1 of this series, we looked at how Motorsports had a long history of using data for competitive advantage. Today, top race teams depend upon the real-time analysis to gain a winning advantage. But how do these teams continue to stay at the cutting edge?, what is their ‘secret sauce?, and what can business learn?
Motorsports is fundamentally, and most importantly, customer driven. The entertainment value of the race spectacle is rewarded through the support of fans. Only through this support can a formula attract top teams and manufacturers, gain finance through commercial rights, and attract high value sponsors. This has been achieved through continual revision of the sport, Formula 1 in 2016 was worth $6bn.
A North Star
Motorsports is a team sport. Each team member is clear on their role and each person is committed to the single clear objective of winning.
In Motorsports the KPI is very clear, put your driver on the top step of the podium. Achieving that goal brings a greater share of rewards including; increased fan base, attracting the biggest sponsorship, attracting the best talent to the team, and a greater share of commercial rights.
Let’s look at the numbers using Formula 1 as an example. Here we can clearly see the rewards for success;
Mercedes Grand Prix in 2016 won both drivers and constructors championships with a budget of:
- £82m sponsorship
- £133m commercial rights based on winning the 2015 constructors championships
Manor in 2016 came last in the constructors championships with a budget of:
- £20m sponsorship & drivers fees
- £35m commercial rights based on coming last in the 2015 constructors championships
Innovation is key to Motorsports success. A Formula 1 race car is always the latest prototype. The car is advanced through continual improvement of each and every component. Data is critical to the cycle of innovation in that an enhancement is tested through simulation using data, performance is measured, results are analyzed and decisions made on the outcomes.
Many Gartner clients I speak with are facing the challenges of digital transformation. Of the many challenges, how to become ‘data driven’ is the one I hear most often. However, applying the Motorsports approach the question surely should be how to become ‘customer driven’. By making the customer the North Star, having clear and measurable business benefits, and innovating continually though data gathering and data analysis then competitive advantage can be won. Furthermore, the Motorsport approach is aligned with Gartners Seven Building Blocks of successful EIM.
In the final part of this series I will look at my own experiences of Motorsports and how I use data.