The next revolution - Transforming information into content
Lessons from Lotus F1 Team COO Thomas Mayer
June 23, 2015
Reflecting the diversity of participants in its Orchestrating Winning Performance program, IMD invites keynote speakers from a wide variety of walks of life. When the racing Lotus F1 Team COO Thomas Mayer took the stage, he said he was going to talk not only of Formula 1, but also on how it relates to business.
"I'm going to explain how making cars that run fast with teams that work quicker can be linked to the organizational world," Mayer announced. Competitive environments require speed and in the case of Formula 1, agility and accuracy as well.
"In a world of emotion and passion, we want to be the best, but because we are a comparatively small team we must outperform and outthink the big boys," Mayer said.
The Lotus F1 Team is one of the ten teams in a Formula 1 business that generates $5 trillion in annual revenues and is viewed by 2 billion people worldwide each year. The team was started by the UK-based company Toleman in 1981, was acquired by Benetton in 1986, then by Renault in 2002, before being sold to a Luxemburg-based venture capitalist in 2011, who also obtained the right to rename it Lotus Team.
"We are one of the most iconic sporting brands in the world, but we still need to make sure that we drive in the fast lane," said Mayer.
Driving improvements with data
The key, according to Mayer, is data-driven performance. A Formula 1 car is a complex product that requires constant technical and mechanical fine-tuning in order to increase the power and speed, while making it lighter. It has 4,000 assembled parts, without counting the engine, and each one of those parts is revisited with a view to improvement. And those improvements have to come fast.
"It's all about how quickly we can do this. Instead of go-to-market, we need to be speed-in-market."
The traditional manufacturing method is based on trial and error, which is lengthy and costly, but now with data analysis, changes can be integrated almost organically. Each car is equipped with 200 sensors that generate up to 65 megabytes of data during each race. "The sensors provide insight on what we need to improve."
The data is then split into different segments, such as the suspension or the wings, and reviewed by specialists. In fact, Lotus uses two teams that compete with each other. Out of the 15,000 drawings produced each year, 500 models are tested each week.
"Data is driving and accelerating transformation," said Mayer, adding: "We're trying to institutionalize intuition to solve the problems."
This has led to a new design approach that relies heavily on the use of simulators - in which drivers extract the performance out of the car - and on 3D printers capable of producing complex and hollow shapes.
"For us, it's all about configuration management." As a result, the quality of the technological ecosystem is paramount, and includes a preliminary cost analysis to predetermine the financial feasibility of a great idea before it is even considered.
The next step will be to transform the information into content, which according Mayer, is the next revolution in the making. "Correlations and patterns that come out of crunching big data allow predictions to be made. That's where artificial intelligence comes in, because this is something we humans cannot do. Prediction is a very powerful tool."
"IOT, the internet of things, is not just about innovation, it's also a way of looking into the future."
To sustain high performance in an environment that works at breakneck speed, the COO explained that the company has broken down formal processes, save the four steps for technical sign-offs, on which security depends. Instead of 14 siloes, information now flows freely, including between blue-collar workers, some whom have been with the company for over 20 years, and engineers. Furthermore a timely way of giving feedback, with debriefings after each of the 20 races, and an atmosphere of constructive criticism allows lessons to be learned from mistakes.
"Monetary incentives must be combined with the intangible benefits that employees feel of belonging to something bigger. Who we are and how we feel give people something to be proud of. That's why they walk that extra mile." Each success is shared with the entire team in a celebration with champagne and handshakes.
"Ours is a culture of passion, respect and pride," Mayer said.
Driving social media
The role of social media cannot be overestimated, he then explained, not just to connect with the fan base, but also to understand and generate new dependencies. "What we try to do is cross-fertilize."
For example, when Lotus F1 Team teamed up withEMC to set a Guinness World-Record, the resulting video of a race car crossing under the flying truck has been viewed close to 12 million times, ahead of David Guetta's Dangerous.
"We diversify to be noticed and recognized. We combine industries to get leverage," Mayer said, giving as another example how Lotus F1 Team capitalizes on the emotional connection of sports and music by sponsoring exclusive music events.
Three words of wisdom
Mayer, the holder of an IMD Lifelong Learning Certificate (because he has attended four IMD programs), left OWP participants with three pieces of wisdom:
1. Find a way of being the driving force of your business.
2. Try to understand how to transform data information into content.
3. Create passion in your employees: "Nothing is more powerful than having people proud. With this they can move mountains."
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