Racing to Win or Winning to Race

Mike Mikkelsen looks at Formula 1 and gives consideration as to how or whether Business Continuity Management has been integrated into the industry.

Over the last 10 years or so the growth of interest in Formula 1 racing has been enormous with virtually every country in the world receiving some form of media information pre and post each Grand Prix.

Long gone are the days of the ‘gentlemen’ racers and the enthusiastic manufacturer.

This is the era of highly professional, highly expensive, high tech organisations supported at some level, depending on the team, by the major motor manufacturers. An example of the financial side of the sport is a proposal that any new team entering Formula 1 requires a bond of US $48 Million to be deposited with the organising body. A demonstration of commitment or what!

The technology that is deployed throughout the industry is totally amazing. For example:

• Miniature cameras embedded in all sorts of locations around the car.
  
• 30 Trucks that carry the TV equipment.
  
• High speed, high band width comms links that pass information collected from the cars back to the factory that allows fine tuning of the performance of the vehicles on specialised test equipment.
  
• PC’s in the Pits that carry out many, many functions – the best one I saw so far this year was the apparent failure of a steering wheel where the mechanics first response was to ‘plug in the laptop’ before changing the offending device. The steering wheel for the uninitiated is a ‘little’ more sophisticated than the one in your family saloon!

And more, so much more!

Lets now consider the commercial position in Formula 1.

The teams generate finance in a number of ways:

• Through direct relationship with a major manufacturer – Stewart and Ford, Maclaren and Mercedes are two examples.
  
• Through direct sponsorship, for example Jordan and Benson & Hedges, BAR – owned by BAT.
  
• Through other forms of trade or related sponsorship, for example Jordan with HP and EMC.
  
• Returns of finance from the organising body generated from the sale of world TV rights.
  
• Drivers who pay for the privilege of driving in Formula 1.

And, again, more, so much more!

But, and a big but, the real money is generated only by the results, hence the title of this article, and results mean winning.

So that’s the background, where does business continuity management fit into the above picture.

Well it’s simply about the results – every race is a very visible end of year report on the performance of the team – in every aspect. That really means performing every time. To ensure that this happens the teams in reality have embedded continuity management into the way they operate. I’m sure that they do not call it continuity management but in effect that is exactly what they do.

Lets consider that statement because if it is correct it is the finest example of a sector taking continuity management really seriously and not providing a token continuity veneer.

Formula 1 has grown to become a massive global industry (based largely from the UK) and as such has all the normal business relationships and linkages required by any industry. The supply chain is critical, financial management is critical, technology is critical and most importantly the people are absolutely critical.

That sounds like any old company to me but the visibility is many-fold more.

I would like to give a couple of examples for your consideration.

Date: September 1998
Venue: Spa, Belgium
Team: Arrows

At the end of the meeting the results for this team were:

3 totalled cars, 2 totalled engines - total costs in excess of £1.5M and a contractual commitment to compete in Italy at the next Grand Prix in 2 weeks time.

A conundrum of continuity management opportunity by any form of measurement with a whole range of exposures:

Brand
Cash Flow
Corporate credibility
Stakeholder credibility
Media exposure

And yet they were on the start line in Italy ready to fulfil their contractual commitment.

Date: July 1999
Venue: Silverstone, England
Team: Ferrari

At the end of the meeting the results for this team were:

One 4th place, one totalled car and one key driver hospitalised for a minimum of 6 weeks.

Again a complete bag of exposures given that the key driver was very publicly aiming to become world champion, the team was challenging for the world team championship, plus a very vociferous press following and complete partisan supporters (‘the tiffosi’) in their home country, the team had the following concerns:

Brand exposure
Media exposure
Stakeholder exposure

At the following Grand Prix they achieved the impossible of a one two result, the replacement driver naturally given lots of testing time to become accustomed to both the car and the team or was it the team and the car?

In both examples the respective teams managed a major but different incident which had the potential of severely damaging the brand, image and reputation of their organisations.

In reality Formula 1 is the quest for speed, it’s the speed to win and be successful that really counts. However because of their financial need to win they have imbedded continuity practices into the operating cultures of the team. So the speed of response to a damaging incident is complimentary to the overall aim of racing to win.

In conclusion, the head of one of the major formula 1 teams when asked for investment in any form by the team always asks ‘Will it make the car go faster?’

The real answer should be ‘fast, reliable and available’ because it is being able to finish each race of the season in a high position that allows the team to grow by the gaining of investment through sponsorship, partnership and enthusiasts. So business continuity management must be a key ingredient of a Formula 1 racing team. Does anybody out there see it different – if so why not respond to the editor with your views?

And finally if it is good enough for the Formula 1 teams is it not good enough for any business?

BIOGRAPHY
Mike Mikkelsen F.B.C.I. - Managing Director

Mike Mikkelsen is the Managing Director of Redan International.

Redan International provides Consultancy, Training and Testing & Exercising of Business Continuity Plans, to all levels of Management and Operational staff.

Prior to this he worked for British Telecommunications Plc (BT) where he started his career with the installation and maintenance of Telephone Exchanges moving on to Engineering Lecturer, then into sales and marketing.

During his time with BT he was responsible for defining and developing disaster recovery and business continuity products & services, and working as a telecommunications consultant for major corporate customers who were planning Business Continuity and telecommunications disaster recovery solutions.

Mike is a Fellow and board member of the Business Continuity Institute. He is also the Chairman elect for the Business Continuity Special Interest Group of the Telecommunications Managers Association, and a member of the Institute of Directors.

He has written many articles on the subject of Business Continuity and Telecommunications, has run training courses, workshops and spoken at major national & international conferences on related Continuity and Telecommunications subjects.