Ben Shields, MIT Sloan faculty and renowned strategist, is no stranger to finding inspiration from the sports world and applying it towards business strategy lessons to be used across industries. For the last two years, he and the MIT Sloan Executive Education team have been collaborating with Formula 1 on the Extreme Innovation Series, which merges MIT’s innovative applied management frameworks with Formula 1’s legendary expertise in applied technology in the world’s top category of motorsports.
The pandemic might have postponed the in-person offering of the Extreme Innovation Series, but that didn’t stop Ben from studying and sharing innovation lessons from Formula 1. Interestingly, when Covid19 temporarily halted F1’s normal operations (as it did every industry’s), it resulted in even more lessons on innovating at speed and discovering new successful ways to operate.
To explore those lessons, Ben hosted a recent webinar with F1’s Director of Strategy and Business Development – Yath Gangakumaran – on how F1 is navigating the pandemic. They broached the answers to three different questions that easily resonate beyond the circuit:
- How does an organizational strategy guide innovation activities during a crisis?
- What organizational dynamics enable innovation at speed?
- How can leaders foster innovation across multiple areas of an organization so everyone is moving forward together?
You can watch the full webinar here.
Following the webinar, we had a lot of questions we couldn’t get to in the 30-minute time frame. Yath and Ben reveal what’s next for F1 – and how you might be able to apply those lessons within your own organization.
What key indicators do you look at to determine if you’re indeed going in the right direction with regards to innovation – and what are the universal indicators to use across industries?
Yath: Innovation has been at the heart of F1 for the last 70 years. There are few other industries that can demonstrate the rapid technical and design innovation that we see in an F1 team fighting for first place. Everything that goes on an F1 car, or is part of delivering our broadcast operation, is there for a reason. When we innovate, we start first with being laser-focused on what the problem is we are looking to solve. Is there a tangible benefit to the end user (most often our fans)? Will it help us to become more efficient? Faster? Lighter? Better?
If you can’t answer these questions easily and find that the excitement of the technology is outweighing the potential of the solution – it’s time to revisit the problem you are trying to solve. Take for example our early move into Esports – are we engaging new, younger fans? Is it an exciting and credible product? Does it have the potential to become a new area of strategic growth? Another great example is with Project Pitlane – the work to rapidly develop breathing aids to support the fight against coronavirus. The importance of having a very narrow scope of what we were trying to solve was paramount – and ultimately this allowed us to innovate, design and produce a ventilator that would have taken two years in just four weeks.
Ultimately, with any innovation there should be agreed upon KPIs before the project has begun, and these can be amended as one learns more about the area of focus as the work develops.
Ben: Yath illustrates a critical innovation lesson here: clearly identify the problem you are trying to solve at the beginning of any innovation challenge. You can spin your wheels on solutions to an ill-defined problem and go nowhere fast. It’s better to spend time up front defining the problem in a way that is “solution-neutral.” You’ll be more creative and efficient as a result.
There seems to have been a positive cultural shift influenced by Liberty Media when they assumed control of F1. What were the challenges during the transition and any advice for other organizations trying to enact a similar shift?
Y: We inherited a business that had been run in a particular way for decades, so the first thing to do was outline the values we wanted to build in the organization. These values were written out by leadership. Those values take time to be embedded – and require leaders to lead by example. Where behaviors were occurring counter to these values, they were dealt with on the spot. Over time, these behaviors became habits and that has created a new culture.
In terms of what is different today – we have a “the answer is ‘yes’ - how do we make it work?” mentality. If we think an idea has potential we look to explore it further. We’re also willing to experiment and aren’t ashamed to make a few hiccups along the way.
Furthermore, we have taken a more collaborative approach with partners – we see them as true partners now, not transactors. That has led to improved value on both sides.
We have taken on the mindset that the F1 Teams have of not settling and looking for marginal gains. For example, moving our race times forward an hour, which we predicted would lead to a small percentage gain in global viewership; introducing a point for fastest lap of the race to add extra excitement at the end of the race. Both have been successful and help provide incremental value.
The biggest change is putting the fan at the heart of everything we do. This has on occasion meant we have taken less money from potential media rights deals to improve distribution in underpenetrated markets. However, that has allowed us to engage with more fans – and as the opening up of our social media policy has shown, opening up the sport deepens fan engagement.
B: Yath reminds us here of another key lesson: organizational culture supports (or stymies) innovation. If your people are encouraged to think differently and experiment in support of a common mission, you will be in a better position to unlock new ideas. Crucially, how you as a leader handle the inevitable failures along the way will also send powerful messages to your organization. Do you support and learn from failures? Or do you treat them as punitive? How would your team answer these questions?
For years (and especially under old ownership), F1 seemed to be a bit of a digital laggard. In the past five years, the digital gains have been immense! How big of a portion did digital engagement make in overall strategy pre-pandemic, and how do you see digital engagement evolving in the future of F1?
Y: As all content and media companies have seen during the lockdown period, digital engagement is key today and this situation has really acted as a catalyst to hasten the structural viewing habit changes we have been seeing the past 5+ years. So it is very important to us – digital opens up new ways of not just delivering content but also thinking about the type of content we create and the tone of voice we use. We have invested millions of dollars on the digital product side of the business (such as F1TV Pro and Fantasy F1) in the past 3 years and we are reaping the rewards with regards to engagement and increasingly monetization.
B: F1’s experiences here emphasize the innovation opportunities that can arise during digital transformations. Every organization is going through some form of this transformation. Approach it with an openness to experiment, learn, and adapt. Taking a long-term perspective is also important. The world is becoming more digital, not less. The digital initiatives you implement today, even the failed ones, will contribute to a broader body of knowledge that will help you compete more effectively in the future.
A fan idea on twitter was leveraged as an innovative solution. What other pipelines – if any - is F1 continuing to monitor for innovation outside of its immediate circle and how much should this be prioritized?
Y: F1 has always been proud to call itself the pinnacle of motorsport and that requires us to constantly challenge ourselves and look for new innovations that will keep the sport fresh. But being innovative isn’t just about looking within your own organization – it’s about looking to the horizon for the next generation of technology, it’s about learning from other industries and seeing how you can adopt one technology and use it for another purpose, or in this case, it’s about listening to your customers. A good example is where we’ve taken an ultra-light-weight but strong honeycomb material that’s used in aircraft containers, and built the walls of our broadcast center out of it – minimizing weight and our logistics footprint.
We’re not too proud to follow other media entities in moving into new spaces, but anytime we do, we want to ensure it is authentically F1 – high quality, bleeding edge technology, and data centric.
B: Innovation requires humility, and Yath’s comments reflect this lesson. What worked today might not work tomorrow – and that’s certainly true in the world of F1. In my view, leaders must consistently widen the aperture on problem solving. Be open to a variety of a solutions to a problem, not just the first solution that comes to mind. If you and your teams can only think of, say, two solutions to the problem, maybe you need to look elsewhere for different perspectives that challenge your assumptions and biases.
What’s next for F1?
Y: One of the areas where Formula 1 differs from other sports is that it’s not as easy to empathize with what the drivers are experiencing. While anyone can kick a football about, not many people kart (or drive a beast of a Formula 1 car). One small example is the difficulty of understanding the 5G the drivers’ necks have to withstand going through corners. Through our collaboration with AWS, we’re beginning to tell that driver experience story better with the amazing suite of on-screen graphics that appear during a race - such as G-force experienced in the corners. It also gives our fans insights into things that they can’t see from the cameras, such as tire wear, overtaking possibility, and pit-stop strategy. My ultimate hope is that we can develop tech that enables fans to experience driving an F1 car in their own room.
B: Yath, those are some exciting technological advancements. The takeaway for me is that F1 is using technology as a means to an end – in this case, to enhance the fan experience. In all aspects of our lives, we will continue to see exciting new technologies with spectacular features hit the market. The question for leaders: How can that technology help solve a problem that matters to the organization?
If you are interested in exploring further how insights from the sports industry apply to your business, check out Ben’s popular Executive Education course Analytics Management: Business Lessons from the Sports Data Revolution. He taps into the best practices from the world of sports analytics and sports technology as a case study. The curriculum provides managers the opportunity to step back and engage in the guided strategic thinking necessary to develop, refine, and implement an analytics program for their own organization. What may have previously seemed daunting is now more approachable when viewed from the lens of a subject many already passionately follow and understand.
Ben Shields teaches in the following Executive Education programs:
Analytics Management: Business Lessons from the Sports Data Revolution
Communication and Persuasion in the Digital Age
Interpersonal Communication: Strategies for Executives (self-paced online)
Management Analytics: Decision-Making Lessons from the Sports Industry (self-paced online)
F1 Extreme Innovation
Guest post by Elaine Santoyo Goldman