People in the car business are so used to being lectured on how they are doing things wrong -- social media, customer service, what have you -- that it’s notable whenever an automotive company sets a new benchmark for the rest of the world.
Zoom in for a closer look at the McLaren Racing pit crews doing their lightning-speed maintenance work the next time you’re watching a Formula 1 race. McLaren’s pit techniques are suddenly trending to become the hot new thing in global business management.
I’m not talking about changing big, slick tires. I’m talking about gathering and crunching the data to make the decision to change the tires before it’s too late. And it applies to business decisions as wildly far flung as inventory control, advertising buys, capital investments, tooling changes -- you name it.
Over the past few years, the British supercar and racing company McLaren has gone manic in analyzing real-time issues during its Formula 1 events. The team wires its participants to the gills, pipes data from all corners of the racetrack in a place like Abu Dhabi back to England, where a command center crunches it with the speed of a McLaren MP4-29, factors in all variables and shoots back decisions about what action to take and when.
“Atmospheric conditions indicate a chance of rain in the next 12 minutes,” you can imagine the system calculating. “Let’s go ahead and change those tires now, 15 minutes early.”
In recent weeks, the global financial consulting firm KPMG announced an alliance with McLaren to bottle that skill and translate it to business applications across the economy. KPMG clients will learn how they can make decisions in advance of trouble and change -- not during them. It is potentially the beginning of a new era of “predictive management.”
Gone will be the studied boardroom analyses of last quarter’s problems and worries, or last month’s surprises, or last week’s hiccups. Tomorrow’s decision makers will hear about setbacks and customer complaints as they happen, and even before they can happen.
In one example, KPMG’s London office used the McLaren approach to counsel a European grocery store chain on how much beer to warehouse in response to changing weather forecasts. Weather affects a consumer’s mood, which, in turn, affects his interest in buying a beer. That affects beer retail volumes, which affect grocery prices.
A good grocer probably already knew all that. But did he have the data-crunching powers and the operational resolve to process the information and act on it in advance?
This is all perhaps amusing to an industry accustomed to being chided for embracing new management habits too slowly. There is probably a factory boss somewhere reading this and chuckling to himself, “That’ll be the day that I get approval to do that!” There is a used-car manager reading these words and muttering, “No one could possibly know how to respond to my market before the customer walks in.”
And that, too, is predictable. But somebody is going to realize the competitive advantage of being able to act not merely “quicker,” but “sooner.”