In 2016, Geoff McGrath, Managing Director of McLaren Applied Technologies (MAT) accepted that the company he was hired to build was at an inflection point.
MAT was the smallest of three divisions within McLaren Technology Group (MTG), the others being McLaren Racing, operator of the McLaren Formula One racing team, and McLaren Automotive, builder of high performance road cars.
MAT had been formed in 2004 as a spinoff organization to apply McLaren’s competences in automobile racing to other fields. Twelve years of operations had led to modest success, but the company had yet to build a sustainable business model. McGrath had been given full freedom to explore different options, with two conditions: first, MAT needed to fund its growth through operations, and second, it could not damage the McLaren brand.
There are three main learning objectives of the case:
The first is to understand the resources and capabilities that McLaren Applied Technologies (MAT) has access to, that it could use to enter into and disrupt a new industry. When any company is considering becoming a disruptor, it must understand the unique and valuable resources and capabilities it has at its disposal, that it can employ to disrupt another sector. In the case of MAT, these resources and capabilities were not immediately obvious.
The second objective is to define which industries MAT could enter with these resources and capabilities and determine why it could compete and win in those sectors. In the case of MAT, it was successful in some sectors, like manufacturing optimization, advanced simulation of air traffic, and professional sports, and less successful in others, like management consulting and pharmaceuticals. It turned out that its main strengths lied in collecting, modelling, and simulating large quantities of complex data in real time.
The third objective is to better understand the capabilities that underpin organizational agility. MAT embodies the three agility sub-capabilities of hyperawareness, informed decision-making, and fast execution.