Fierce competition, hostile environment, unpredictable hurdles, zero margin for errors, high stakes and breakneck speed - these are some of the characteristics of a Formula One race. Coincidentally, these terms can also be used to describe the environment in which businesses operate today. In both cases, it is strategy and execution that separates the winners from losers. And, for both, the aim is to outdo the rest.
So the question is - how does one gain a competitive advantage in an intense race like this? What keeps a team ahead of the rest? And, what will get you past that checkered flag first? At a broad level, there can be two ways for a Formula One team to stay ahead of competition.
The first approach is Complete Upgradation. This entails upgrading everything in the car, including the engines, tyres, body and the remaining 7,997 parts - yes, about 80,000 parts go into making a Formula One car! However, the guidelines laid down for Formula One cars limit the size of the engine, its RPM, the fuel flow rate, the weight etc. for each car. This levels the playing field with no team gaining any competitive advantage by virtue of upgradation alone.
In a business context, this can be equated to IT transformation, which involves complete overhaul of IT functions to cope with the dynamic market environment. These projects are CAPEX intensive, and require rather lengthy timelines to complete. Recent studies show that a considerable percentage of transformation projects overshoot budgets and are delivered behind schedule. Needless to say, results cannot be guaranteed.
The second approach is Process Transformation. Formula One races are often won or lost because of pit-crews and pit-stops. Analyzing and optimizing activities carried out by the pit crew at the pit stop helps deliver best results and drive a team to victory. Comparatively, this approach does not require large scale investments or extended timelines. What it needs is a structured approach that allows these tasks to be performed in the most efficient way possible.
For indicative purposes, let us look at the below diagram that depicts what happens in a pit stop, and how each of these processes can be transformed to drive higher efficiency and in turn better results.
(The text in yellow in each step indicates what kind of transformation can be brought in to drive efficiency)