How to make your organization as fast and agile as a Formula 1 team
Seven organization design lessons that increase performance
It is a warm Sunday afternoon in Monaco and you are Daniel Ricciardo. You have just won the legendary Monaco Grand Prix and you are listening to the national anthem on the podium. Halfway through the race, your engine lost a significant amount of power so you had to fight all the way to the end to keep your position. Your knees are still trembling from the adrenaline and you feel relieved and exhilarated.
You celebrate by spraying champagne and drinking it from your shoe. You can even convince Prince Albert and his wife Charlene to drink with you on the podium. In the meantime, you can’t stop thinking about where to throw the party. Will your yacht be big enough? Or should we rent out the casino?
However, there’s something more important to complete before continuing the revelry: debriefing the race with the engineers.
You enter the room where almost 60 people have taken their place behind their laptops, ready to go through all the details. How were the tires? How did the engine perform? How was the race strategy? In the factory in the UK, another 45 engineers participate in the meeting remotely. During the race they monitored and processed data from dozens of sensors on the car allowing them to advise strategic decisions in real-time.
The post-race debrief takes almost two hours (longer than the actual race). It is just one of the 50 meetings in a typical race weekend focused on reviewing, learning, and improving. Formula 1 teams know this focus on continuous improvement is the only way to keep up with the fierce competition.
Over the course of nine months, ten teams, 20 drivers compete during 21 races across the world. Even though the spotlight is often on the superstar drivers, it is what happens behind the scenes that enables Formula 1 teams to maximize agility and innovation in their quest for success.
I recently had the opportunity to take a look behind the scenes of this unique sport, and I found many practices that can be applied in any organization.
Involve everyone
The day after the race, Ricciardo flies to the factory to celebrate with his colleagues. During the Monday morning all-hands meeting the crowd barely fits the room as almost 800 people were involved in creating the car and making Ricciardo’s win possible. The race director talks through what happened during the race, and highlights the priorities for the next race. An engineer asks, “We had a problem with the motor generator unit during the race, what teams should work together to fix this before our next race in Canada?”
This is not a typical one-way ‘management briefing’ where the CEO informs his top managers what to do. In this session, everyone is involved, everyone’s input is valued and all questions are answered.
Clarity of purpose
Formula 1 teams have a crystal clear goal: win races and championships. After each race, everyone knows if they are moving in the right direction and everyone knows how their daily work contributes to the overall success of the organization. Information like this is not restricted to the boardroom as in many organizations.
As an engineer, you are aware of the big picture and you know what this means for your day-to-day priorities. Since you have the information and expertise you are trusted to make most of the decisions you are faced with in a typical day.
One simple question serves as your guide: “Will it make the car go faster?”
No time to waste
Just like in most organizations, Formula 1 teams have different departments that must work together create the final product. To ensure effective cross-functional collaboration leaders of these subteams come together twice a day for a quick stand-up meeting to talk about progress and dependencies. Communication is preferably face-to-face.
Instead of wasting time on figuring out what is going on, what is important, and who can make what decisions, Formula 1 teams have a huge amount of organizational clarity that enables speed and agility. Imagine if in a Formula 1 team, someone would need to submit a ten-page PowerPoint deck to ask for a decision of a higher up management team, three weeks in advance. It would never happen. They simply can’t afford to waste time on bureaucracy.
Rapid data-driven innovation
There is not much time between races (usually two weeks but sometimes only seven days). In both cases improvements to the car must be developed, tested, and implemented in time for the next race. Let’s go back to what happens on a typical Monday after a race. Engineers analyze the 400GB of race data and start to design new and improved parts, some of which are 3D-printed overnight. On Tuesday they are tested in the wind tunnel and the best innovations are selected to be produced in carbon fiber on Wednesday. On Thursday, the final parts are shipped to the next race track where they will be bolted on the car for the first practice run on Friday morning.
Every week the teams make approximately 1,000 changes to improve the car’s performance. The cars are like a driving prototype — they are never in the same configuration. Everything is open to adjustment and tweaking based on how the car is performing (even during the race). Furthermore, these innovations are based on data, not on the Highest Paid Person’s opinion.
By the end of the season, thanks to this rapid iteration and innovation, cars on average become two seconds(!) per lap quicker. When someone brings a radical innovation to the circuit other teams see it and will often try to copy it. In this cutthroat environment the team with the shortest build-measure-learn cycle stays ahead.
Learn from failure
It is race day in Bahrain, and Kimi Räikkönen drives into the pit-lane. Approximately 20 mechanics work simultaneously to change all four tires in little over two seconds. The moment the new tires are attached, Kimi’s light turns green and he presses the throttle to drive away. But this time something went horribly wrong. His car hits a mechanic, breaking his leg. Kimi stops the car and sees his mechanic lying on the ground in agonizing pain. During the pit stop, even though he received the green light, his left rear tire had failed to come off.
Kimi’s race is over. He scores zero points. Since there are only 21 races in the season, you could say 5% of his season was wrecked because of this incident. Does the mechanic responsible for this mistake get fired? Absolutely not. Imagine if that happened to an employee your organization. What would happen if one person’s mistake resulted in the loss of 5% of a year’s revenue?
Formula 1 teams understand that it’s rarely one person’s mistake. And that it’s best to learn from all the factors that happened during an incident, to prevent it from happening again. They realize if people are not allowed to make mistakes, people will not push themselves and their abilities to the limit. In a sport where tenths of seconds matter, successful teams need everybody striving to get better and faster at all times.
“When you have a blame culture, people spend 60–90% of the effort covering what they have done rather than doing anything positive and understanding the problem, making the car go quicker or making operations slicker.” — Rob Smedley (Williams F1) in Performance at the Limit
How to improve your own organization
I help organizations become faster, more effective, and more adaptable to change. I’ve studied the principles, beliefs, practices and rules of some of the most high performing organizations. Here are a seven things you can do to become a bit more like a Formula 1 team:
- Continuously improve your organization by planning recurrent time to work on the organization instead of in the organization.
- Share context and enhance information flow through regular interactive all-hands meetings.
- Distribute authority and autonomy to individuals and teams. Give your front-line people the information they need to make the right decisions, every day.
- Improve collaboration between siloes by creating effective cross-functional teams or by building strong communication bridges between them.
- Keep processes light and rules simple. Trust your people to do the right thing and free them from unnecessary rules that are designed to prevent a few edge cases.
- Optimize your product development lifecycle by shortening the time-to-learn. Let data drive decisions.
- Create a no-blame culture where people are encouraged to experiment. Take a systems thinking perspective when learning from failure.
Formula 1 teams can’t afford to waste time on bureaucracy. I would argue this is actually true for all businesses that want to survive the ever changing market conditions. So think about this question: what is your current way of working costing you and can you afford to keep it the way it is?
Want to learn more?
Take a look at my book: Formula X. A business fable about speed, leadership and organizational change. Or my new book Unblock: Clear the Way for Results and Develop a Thriving Organization.
Or check out this video from my keynote at Agile Amsterdam. I love inspiring audiences with this story, so contact me if you’re looking for a speaker.
Acknowledgements: Thanks to ICT Media and AT&T for inviting me to the Red Bull Racing factory. Also, I learned a lot from reading the book Performance at the Limit — highly recommended.
