On Sunday I was talking to a friend, who just finished watching the third Formula 1 race of the 2011 season from Shanghai. His brief comment after the race: “Seems like the days when you could do something else besides watching Formula 1 are over. It’s not enough to watch the start and come back 90 minutes later to watch the finish anymore, there’s so much happening during the races this year that you really have to concentrate on it.”
What has happened?
Prior to the season, the rules were changed drastically. The following three changes have the biggest impact:
Allowing a driver who’s trailing another to change the setting of the rear wing to allow for easier overtaking (DRS), the introduction of the KERS system (“kinetic energy recovery systems”) that gives more flexibility and tactical options when fighting for positions and the change of tire manufacturer to Pirelli resulting in different tire durability and less knowledge on the tire performance at this early stage of the season.
Due to all these additional factors and options, team tactics have become a lot more important – and a lot more complicated.
Still, for someone not really into this sport it still seems rather easy: Build the fastest car and you will win. It sure helps, but it’s no guarantee, otherwise Red Bull, who obviously have the fastest car in the field, would have won the race in Shanghai just like they did in the previous two race. But they didn’t, McLaren did, as they had a better strategy and execution.
Transferred to our “sport”: Producing the best product or service obviously helps, but it does not guarantee winning. The strategy and execution towards the market, that little thing called marketing, is as important as team strategy is in Formula 1: The more complex the environment is getting, the less a product “sells itself” just by the pure product capabilities.
And in marketing as in Formula 1, winning seems a lot easier from the outside than it actually is. Formula 1 teams this season seem to be overwhelmed by the amount of information and options they have.
Meanwhile, marketers have more data available than ever before in history. Yet this creates a new kind of fuzziness: Things aren’t fuzzy due to a lack of data but because we have too much data and information available. As a result, we get lost in information and in options. And acting under these fuzzy conditions is a tough job – too tough for the Red Bull team in Shanghai and often too tough for us.
I see three strategies or approaches that are used to deal with this complexity:
a) Build more complex models that try to use all data available
b) Limit yourself to the most important information and disregard the rest
c) Put less emphasis on data, try to become flexible, take risks, be intuitive, or: See the big picture.
These three are often employed in a certain hierarchy from a) to c) – the more desperate companies (or Formula 1 teams) become, the further they move towards c). This leads to two decisive questions:
1) How to find the right situation or time to move away from a), from complete calculation and the feeling of security towards b) or even c)?
2) How to do actually do c)?
Let’s start with question 1):
Approach a) is very tempting and very strong, as it is hard to argue against it. If all things are taken into account, what could jeopardize the model? The problem – and we may call it the “Red Bull problem” is: If we stick with a) for too long, it may have carried us too far into the wrong direction. Red Bull did all analysis they could and came up with the plan to run a 2-stop strategy. They were not able or willing to realize early enough that things didn’t quite go as planned in their complicated model. If they would have accepted early on that three pit stops would be faster and switched their strategy, they might have been in a good position to win the race given that they basically have the fastest car.
Model a) is also so strong because prioritizing (b) hurts. Which information is not looked at? You can’t ignore the facts, can you?
Yes, you can. If they are less important than they seem. If they don’t really help in the given situation. If they only add complexity.
Anyway, it seems like the transition from a) to b) is feasible in many companies: Priorities, scoring models, etc. still have a scientific touch and hey, after all they’re still facts, right?
It’s the step towards c) that really hurts. Many understand it as a sign of failure in a) and b). Which is wrong. Implementing c) is just based on the insight that the environment and the market have become more complex. Failure would be not to realize it.
Which brings us closer to question 2).
A good marketer is in command of a), b) and c). But great marketers feel better and better the closer they get to c). Their art, the challenge they are looking for is not just gathering figures and using common sense, it’s seeing the big picture even when it’s hidden behind a lot of complexity. Which isn’t easy, even if it may look like it from the outside. And even those classic marketing models that look oh so simple, like e.g. Porter’s Five Forces or the U Curve are not the simple truth, but a sparring partner for those working on c), as they help to recognize, understand and work with the big picture.
And once you see the big picture, that’s the point where the fun begins. The point where the race becomes interesting.