I Starting Grid

Learning a lesson

Former FIA technical consultant Tony Purnell talks to Richard Lofthouse about
the four business lessons that can be learned from the world of Formula One.
1. If there is a strong market
demand for your product, you can
get away with almost anything.
Today no one is too sure who is in
charge of Formula One: is it the
teams; the FIA or FOM? The cars
are ugly and dont race well; the
platform for sponsors is tarnished
and out of tune with mainstream
values; the sport is synonymous
with scandal. Yet the public still
love the product. The message here
is one that is skated over by the
average MBA programme, that if
the product is good and the money
flows in then a business can still be
highly profitable despite uninspired,
disjointed and disorganised
leadership. It is only when better
competition gains traction that one
has to worry. Conversely, brilliant
leadership will not result in profits
if there is no demand for the
product... The public will tolerate an
awful lot if you give them what they
want and they cant get it anywhere
else. To be fair FOM do a good job
in selling their product around the
world, but do they have any strong
competition?

2. Dont invest in a product

orientated business where the
product development process is
underfunded or moribund. Money
spent on product development pays,
but you need to choose the right
people...There is a good correlation
between money spent on product
development and winning in F1.
This is mirrored in business. The big
companies often dont score well in
terms of efficiency, but by throwing
money at product development they
always eventually bulldozer past the
small companies...
3. Brilliant product development
people are worth more to a product
business that almost anyone else
in the business... Large businesses
prefer constant refinement of
products, essentially redesigning
rather than producing anything
really new. Small businesses tend to
innovate to try to steal a march on
the bigger opposition, especially in
terms of entering the market place.
The latter approach needs a degree
of brilliance in product development,
something which tends to be a mix

of engineering cleverness coupled

to a razor sharp perception of whats
important to the marketplace.
Occasionally the two combine... [In]
F1 a small shift in market conditions
(the aero rule changes of 2009) put
the onus on brilliance... Adrian Newey
acted like Apple's Steve Jobs in seeing
what was really required and not just
following everyone else... There can be
little question he is the most important
person in the Red Bull organisation...
(apart from Dietrich Mateschitz who
supplies the money, of course).

4. Beware emotion in business
decisions: they always become
unstuck... What possesses normally
rational and disciplined companies to
spend money beyond all reasoning?
Emotion. Involvement in F1 throws one
into an emotionally charged hothouse.
Decisions get made without any real
business justification in a desire to
be top dog. Theres actually little
wrong with this if the money supply
is happy... However when you start
spending other peoples money (as
with listed companies) one plays a
dangerous game...

Tony Purnell, former

FIA consultant

Behind-the-scenes talent
The Paddock examines a quirky or little-known job within global motorsport this month the helmet designers at Troy Lee Designs
Troy Lee Designs, based out of
Corona, California, is the worlds
largest custom helmet paint shop.
It all began 25 years ago when Troy
Lee, then a teenage motorcycle
racer, started painting helmets for
friends on the bike circuit. It rapidly
evolved into a serious business
servicing the expanded world of
motorsport generally.
Nick Gauvry is one of the graphic
artists who does the painstaking
work of preparing and painting
helmets to custom designs. Jay

Stemska is another. They agree that

the core of their profession is keeping it fresh by constantly striving for
new designs and sick graphics.
Stemska says attaining the right
practical skills takes years, although
the biggest challenge is to have the
ideas to create a truly original helmet.
Thats no small task when the
customer might be Dario Franchitti
in the IndyCar series, Juan Pablo
Montoya for Chip Ganassi Racing in
NASCAR or Patrick Long for Porsche
in the American Le Mans series.

Thats just the car side of it, never

mind Chris Blais for Red Bull KTM
in Dakar, the off-road motorcycling
race across Africa, Katrina Strand
in MTB downhill cycling, or a host
of MotoGP riders such as Louis
Capirossi for Rizla Suzuki.

Troy Lee Designs,

where originality
is the most
challenging skill

JUly 2010 I 11