Cranfield's Forumula One Professor

Cranfield professor on business lessons from the world's biggest grossing sport

Cranfield students take in business lessons while adjusting a Williams car

As Brazilian racing driver Felipe Massa recovers from a near fatal accident at the Hungarian Grand Prix, Cranfield professor and Formula One blogger Mark Jenkins ponders business lessons from the world of the fast and furious.

Jenkins, director of research at Cranfield Business School and co-author of Performance at the Limit: Business Lessons from Formula 1 Motor Racing, believes there are real insights to be drawn from the sport.

“Perhaps the most important lesson is open communication,” says Jenkins, who writes a hit blog on the Formula One World Championship. “Constant communication is the key to so many teams’ success”. A team must be clear about its priorities, what's happening and who is responsible: “Getting everyone together to say what's going on is so, so important,” adds Jenkins.

Cranfield’s Mark Jenkins: the “f1Professor”

A fan of Formula One for “20-odd years”, Jenkins was impressed by the friendly welcome he received when he visited Ferrari, the world’s most popular team, last year: “Ferrari surprised me a lot. With them being so rich and popular, and not knocking me back: it really changed my opinion.”

Jenkins roots for Williams F1, currently sixth in this year's world championship table.

“I like Williams a lot because of their rich history and because they always try to be a true racing team”, he says.

Teamwork is also an important business lesson in Formula One, according to Jenkins. Successful racing teams are very precise in what they try to achieve: “Whenever Frank Williams (owner and funder of Williams) signs a cheque, he asks: how this will make the car go faster? That's real focus.”

Jenkins uses lessons from Formula One in the classroom. He wrote a series of case studies exploring how different Formula One teams performed over a particular time period, which showed students the “real idiosyncratic details” of managing a team.

On June 22, as part of the Royal Academy of Engineering’s Annual Soiree, 12 Cranfield MBA students participated in a six-team pit stop challenge in partnership with Williams F1. Each team had to change the tyres and oil, and refuel a real F1 car. Team “Ferrari” won the day with an unofficial best time of 6.9 seconds during a practice run, and an official time of 9.25 seconds.

The tasks in themselves were not technically difficult, but doing them quickly was. The point of the challenge, says Jenkins, was to show how good management improved results.

Formula One is now the biggest grossing sport in the world after the FIFA football World Cup and the Olympics. Jenkins describes the three billion dollar sport as “a successful commercial package: a product that people can consume from home every year rather than every four years.”

“It’s not just cars going around the track,” he adds. “Politics, leadership, personalities, egos and of course the money. They are all very important. It's a very fascinating world.”

Comments.

Thursday 30th July 2009, 00.40 (Europe/Paris)

i wouldnt want to drive that acar when thos estudents were done with it

Thursday 30th July 2009, 00.46 (Europe/Paris)

luck MBAs they get a hand on a real F1!

Thursday 30th July 2009, 20.32 (Europe/Paris)

Learning from ground-level situations like F1 pitstops is like learning from Sun Tzu's Art of War - you know what actions are beneficial, the problem is how to effectively implement them in an organization.

I watch football all the time and I know the importance of teamwork. But when I go to the office I'm just passing and receiving projects from my teammates without actually scoring.

Jen Ten

Tuesday 4th August 2009, 03.48 (Europe/Paris)

I've got an equity fund manager friend who says that he always stops investing in a company's stock if the company starts sponsoring F1 - thinks it's a worrying signal of the firm's marketing strategy...

Tuesday 4th August 2009, 16.51 (Europe/Paris)

Hello Jen10

I think your friend has a point. There are lots of examples of firms pouring money into F1 simply because the CEO is a fan and there's no coherent marketing strategy. However there also some great examples of where firms have used F1 really well - the two I use are Shell - have a look at every Shell forecourt and you'll see the Ferrari prancing horse and Ing bank, both of whom entered new markets and launched products around their F1 sponsorship. So the rule is have a good strategy and make sure you leverage your F1 investment effectively.

Jen Ten

Tuesday 4th August 2009, 19.12 (Europe/Paris)

Dear anonymous - here's my two-pence worth on ING: I heard the marketing director (Isabelle Conner) speak at the annual Economist marketing conference this year. There were undoubtedly some regional benefits of the F1 sponsorship, particularly for the ING retail networks in Eastern Europe - e.g. promotional events with F1 cars in shopping malls to sign up new customers. But overall hard to justify the millions spent on ING branding. And a locked-in contract for 3 years, from which (after 2 years) ING are now trying to extricate themselves... And ING is a perfect case study for equity trends - share price slid downwards following F1 sponsorship! Only healthy part of the 7-part business is INGdirect...

Wednesday 5th August 2009, 00.13 (Europe/Paris)

Hi Jen10
I think if you'd ask Isabelle the question whether or not it was a good thing to enter F1, she'd say on balance yes, although one of the things they wouldn't do again is to get locked into a three year contract. Interesting theory on share price and entering F1, I think there were one or two other things going on in the global economy at the same time?

Wednesday 5th August 2009, 03.06 (Europe/Paris)

Dear Jen10 and Anonymous,

Perhaps Mr Schumacher can best settle the debate, since he is due to be back as well. However, love to see more of you two though.

Friday 7th August 2009, 04.04 (Europe/Paris)

I used to work at Shell. For twenty odd years the Ferrari team has been sponsored by Shell for sound commercial reasons. Oil companies strive to differentiate their products and sponsorship of a consistently victorious team enables Shell to launch premium gasoline and diesel fuels with Ferrari endorsements - a win-win situation! Not to mention the efficient brand advertising to the massive global TV audiences.

Befsvielf

Wednesday 20th July 2011, 17.34 (Europe/Paris)

Please one more post about that.I wonder how you got so good. This is really a fascinating blog, lots of stuff thcat I can get into. One thing I just want to say is that your Blog is so perfect

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