McLaren takes F1 know how into business world
Innovation
Posted By: James Allen  |  15 Sep 2011   |  9:13 am GMT  |  90 comments

McLaren has today announced an interesting partnership with GlaxoSmithKline, one of the world’s leading phamaceuticals companies.

The deal is all about McLaren applying know how and technology from years of perfecting the racing game to a corporate environment, such as GSK’s business.

It’s something I’ve suggested for some time that F1 could usefully do for the outside world. The sport is all about innovating, adapting, overcoming, planning, reacting quickly, making strategic decisions and building a stable base.

Pat Symonds once said that the attitude of the top engineers in F1 should be, “I don’t know how to do that, but I’ll find out and I’ll do it by next weekend.”

I wrote a piece in the Financial Times in 2007 based on the interview with Symonds, arguing that F1 should export its skills to the business world.

“As an industry what we are good at is change management, “Symonds said. “Everything changes very rapidly, the specification of the car changes weekly, our goal posts move more quickly than financial markets and you have to be good at managing change. That is something we can teach business people.“

Such is the relentless progress in the sport, as a team comes up with an innovation like a blown diffuser or and F Duct wing and everyone else learns the science behind it and reproduces their own version.

So McLaren has done a deal with GSK which will perform some pretty cool functions for the company, helping them plan better and model different scenarios.

For example they will create a replica of their operations unit at the factory, which all teams have and which oversees all strategy planning, simulation after practice sessions and so on during race weekends. The will put this in the GSK London HQ and it will “drive faster decision-making around variables such as wholesaler stocking, inventory management, pricing, responding to retailer requests, competitor activity, and market and customer needs.”

Honda used to send its engineers into F1 for a few years to train them in thinking outside the box and getting things done quickly and they would then pull them back into making road cars.

This McLaren/GSK deal reflects that with one of the main objectives being, “The inspiration and development of GSK’s managers, and the preparation of its managers to be able to make better and more informed business choices while remaining agile and adaptable to ever-changing circumstances.”

The deal runs for an initial period of five years, to 2016. Although it’s not in their statement today, I understand that one of GSK’s brands may well appear on the car, but this is only a small part of the deal. To some of you this story may seem like marketing gobbledygook, but I think it’s worth considering more deeply; it’s great that the unique skills F1 people develop from racing hard against each other, can be applied to a wider purpose.

McLaren have a track record of repurposing technology for other uses, such as the recent Air Traffic Control initiative from its Applied Technologies division. But to repurpose skills is a great idea and more F1 teams should do it.

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1

Mclaren should take a page out of Ferrari & Red Bull’s books & stop playing games by keeping it simple i.e. Focus on only two things either drinks & F1 or road cars & F1.

2

I love the story James. I live on a small Island in the Caribbean and we don’t always have what you have in the real world so at my place of business we use that same approach ( I don’t know but I will find out and have it for you next week). Sometimes people who don’t have to deal with these type of things just don’t understand. F1 has added so much technology to the world and unless someone reports it we just think it is racing. I for one love that you go so deep and tell us what happens behind the scenes.

3

Hi James,

some weeks ago i came across some news about a partnership btw McLaren and NATS related to the ground movement of aircraft, but i unluckily lost the link. Have you got any clue where i can find some more?

Regards

4

It shouldn’t be lost that this is not the first venture of this sort that McLaren has jumped into.

They had a partnership with BAE Systems for over eleven years. BAE helped develop McLaren’s Aero and Composite capabilities, and in return McLaren helped transform BAE manufacturing processes. I work for another defence prime, and have been to BAE Insyte at Broad Oak on several occasions and the improvements there in recent years have been staggering. Their use of SAP (another McLaren partner) in the manufacturing areas is incredible, they really embrace it – all job times are automatically recorded and every step is fully traceable. Many organisations use SAP in different business functions, but I haven’t seen it so effectively used as at BAE – in no small part thanks to McLaren. McLaren have also helped BAE develop an agile manufacturing system, increasing flexibility and shortening set up times for manufacturing areas.

It seems McLaren will be doing something similar with GSK, they’re getting plenty of money in this deal and are expanding themselves into other industries. Smiles all round!

5

Simon’s aerospace comment is absolutely key to the success of this initiative by GSK. I used to sell high-end Computer Aided Engineering products to the aerospace industry but had to take them to our Formula One customers to illustrate how they were used to collapse design and development times. The aerospace mindset was typically unable to adapt their thinking and behaviour sufficiently to take the same benefit. I wonder if the pharma’ industry would have the same issue.

6

With aerospace, safety, reliability and serviceability of vehicle is extremely important. Perhaps reduction of design and development times risks safety and reliability by providing a tool which forces humans to overlook possible failure points in the design due to speed of design cycle.

Just a thought.

Faster is not always better in all industries. And if I recall correctly, McLaren has all to often in recent memory compromised reliability for “faster”. Just ask Kimi.

7

There is no shortage of companies / governments around that would benefit from

1) What Pat Symonds once said that the attitude of the top engineers in F1 should be, “I don’t know how to do that, but I’ll find out and I’ll do it by next weekend.” Basically get of your butt and make it happen

2) Access to decision making processes that are based on accurate real time data…. most of us only ever dream of accurate real time (end of the month if you are lucky) data, especially in the world of supply chain, logistics and operations.

8

Just as long as they don’t partner an investment bank I’m happy, the last thing we need is the F1 mindset encouraging more rule bending rouge traders, though we can always do with plenty more rule bending in F1.

9

‘Rouge traders’ — are they the ones who powder their faces and wear loads of lipstick?

10

I understand that in general Formula One Teams have to have talented people and thought processes in place for “change management”. Formula One is a very insular and segregated business and I’m not so sure the thought processes utilized in Formula One can be expanded out to the “Real World”. Just look at Mclaren’s hiring of Sam Michael as an example. He, by Formula One Standards, was a failure at Williams yet Mclaren scoop him up because he’s available and has experience in “The Business”. I’m not so sure a competitor in “The Real Business World” would be interested in a Sam Michael type.

11

As a GSK employee and McLaren fan I find this a hugely exciting deal – I’m eagerly anticipating my trip to the MTC already! I agree to an extent with those who’ve expressed doubts about McLarens ability to transfer it’s innovation techniques into a FTSE top 5 company, but I’m certain there are areas where it can work, particularly in the Consumer Healthcare brands that aren’t subject to the same levels of regulation and corporate inertia. Combined with some prominent branding on a front running car and it’s a wining deal from our perspective; I just hope McLaren aren’t expanding into too many diverse business ventures too quickly.

Ps – This is not the first time GSK have been involved in F1; Niquitin sponsored Williams in the early/mid 90s.

12

Of all the companies for McLaren to get into bed with! SmithKline would be bottom of my guess list!

Can’t quite correlate the two – like Demi Moore and Ashton Kutcher!

13

That wonderful something called ‘initiative’. F1 thrives on it, but it’s scarce as flying pigs in many other quarters, government, for example

14

Good news for Bianchi fans, Jules did a lap half a second faster than the best lap of Perez. For a driver, who doesn’t drive a F1 car all year, i have to say, that’s his performance is pretty impressive. Bianchi is coming alive, and if this young french men is faster than Checo, than i think there is many driver who are slower than him or may be Bianchi is fatser than them. Bravo Jules !!!

15

Great article. It makes me think of the pre seasons of 2009 and 2011 where it was obvious that they had built a rubbish car. In 09 they tried to fix what they produced but in 11 in simple terms they learnt to copy part of a rival. However to do that they had to learn from there mistake in 09 and realise that sometimes things are just sat in front of you – a nice picture of red bulls rear end!!

I remember most on this page vilifying whitmarsh after he announced that they had found over a second. Whatever mclaren did in that short time after Bahrain was cancelled proved your point about pat symonds.

16

GSK make Lucozade, which was the Red Bull of the 1980’s.

17

I’m guessing GSK get technical knowhow as described in the press release and McLaren get money. Pretty straight forward. Oh and a few more VIP passes for GSK management of course.

One other way I can imagine these two endeavours mesh is complex rule books and finding ways to get the best out of them. Although F1 is known for finding ways of circumventing the rules which could be interesting in the Pharma industry!

Regards

Laura

18

Please James, if you have the information can you tell us the times of Bianchi and Perez, who are at Fiorano in the F60 car. I hope Bianchi can show, his real talent.

19

Perez had two days of running in Ferrari’s simulator at Maranello before completing 46 laps of Fiorano – with his best time being 1m00.650s. Ferrari also gave Jules Bianchi a run in the F60, with his best effort after 70 laps being 1m00.213s – although he was on a different testing programme to Perez.

(Autosport)

20

Gimme money and I’ll find out and I’ll do it by next weekend. Oh, it’s about passion for the job, to be like a F1 engineer! I miss the pitladies in this equation. Without it sounds just like some corporate’s sectarian ‘strengh through joy’-philosophy.

21

Very saddened that McClaren would enter into a busisness agreement with a company that, “hides” research that shows some of it’s products cause more problems then they cure. That pays out millions each year in out of court settlements with patients affected by it’s products. Maybe a little more research and due diligence should have happened..

Maybe take a look at the book “The Evidence, However, Is Clear: The Seroxat Scandal” by Bob Fiddaman, very eye opening…

22

A great area to look into. Let’s not forget, for years (and still today, in the case of Ferrari) F1 teams took money from tobacco companies – I’m not really aware of any F1 journos challenging them about the appropriateness of this, even when some highly alarming facts about the industry ethics started to emerge.

I don’t know enough about GSK to comment, but it does raise the question – would any team in F1 turn money down? In the competitive climate of courting sponsors, is there any room for consideration of whether the company is an ethical business?

23

Everyone’s cash is good in F1. Personally I don’t see anything wrong with it. It’s a product we enjoy and they are contributing to it. The ethically questionable companies will be out there anyway.

For example, I never started smoking even after becoming a Schumi fan in his Ferrari days. I always found it funny that they pumped all that cash and had as their face Schumi – a super fit non smoker.

24

I used to agree completely. In the past I always wholeheartedly supported the right of tobacco companies to be in F1 – it’s a legal product after all.

I’ve changed my views entirely now though. I don’t want to be a head-in-the-sand fan. It’s important to know whose money provides our entertainment.

25

James, great idea but the closest business to F1 in terms of engineering at least is Aerospace. In my 20 years experience in Aerospace, the biggest problem encountered is resistance to change. The people management skills in F1 will be based on the assumption that everyone is competitive, wants the team to win and will do everything asked of them to achieve it with a clear hierarchy. After 20 years working in Aerospace I have never seen anything even approaching that mindset, management teams often talk like that, but they are sometimes ambushed by the people who really make things happen, the cultural differences are huge. It will need a real hearts and minds attitude shift to work effectively.

I hope this works out for McLaren and GSK and they overcome any obstacles. I can’t see how the UK economy wouldn’t benefit from a little more urgency, and more of a “can do” attitude.

26

As a former shareholder, I wish them luck, they are going to need it. Personally I’d take little real advice from a company with profits of £15 Million to that of £2 Billion. Re-addressing GSKs woeful short-termism approach for sorting out their drug delivery pipeline is is more pressing need than giving managers more layers of six-sigma type rubbish to try to deploy.

Still, I do like a lucozade from time to time.

27

Nearly 100 Grams of sugar in a single bottle. I say cheers! That will stick it to Red Bull. Who needs wings when you have a jet booster?

29

This is very interesting, the press release is here:http://www.gsk.com/media/pressreleases/2011/2011-pressrelease-625498.htm.

Looking at product, the two are remarkably different, in that one is able to push engineering to the limit and immediately put it into practice, while the other faces many years of testing evaluation and seeking of official approval in each of the target market countries.

True the McLaren engineering skill may well be able to improve efficiency on the “pill” production lines, and strategy planning, however I cannot help thinking that input from a Japanese car company could give them a better result. Many of the procedures are specific to mass production which is what GSK need. Statistical Process Control (SPC) is not what you will find in F1 but it is very relevant to mass production.

Problem solving is not the exclusive domain of F1, Ford Motor Company has a very famous (in the industry) 5 step procedure for tackling all sorts of problems. (The general 3 step is perhaps better known outside the automotive field.)

However the inclusion of rigorous FMEA in many areas of the company would be well worth implementing. It is very important to do FMEA in the project design stage. Advance quality planning, including planning your STC means that when you finally get to make your product, it will work safely, and be controlled and consistent.

There are a number of things GSK can get from the strategic relationship, but I cannot see what McLaren are getting in return.(Will we see Lucozade instead of Red Bull being drunk everywhere, I suppose a new brand image of competitive racing isotonic drink is possible with McLaren staff all to be seen guzzling it on telly, much reduced telly next year of course, but that product already exists!)

Now if McLaren were simply to say that they are selling their engineering expertise in the same way that Lotus Engineering have done for many years and that GSK has become a customer, that would make sense to me.

30

The Royal family of Bahrain and now Glaxosmith. McLaren certainly do have some interesting bedfellows.

31

Philip Morris trumps them all.

32

Vodafone Lucozade McLaren Mercedes – that has a nice ring to it!

I love the reference to Pat Symonds. This guy has so much to offer. What an amazing lateral thinker he is. I can’t wait to see him properly back in F1.

As for McLaren, I think this is a novel idea with regards to selling its valuable skills to the non-F1 world.
Maybe a direct consequence of the Resource Restriction Agreement?

33

Interesting interview about it on Sky news yesterday. Dennis pointing that F1 will be become a minor part of the business in the future.
Mosely [mod]-ing Ron is probably the best thing that could of happened for the Mclaren business.

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