IndyCar Maxim #6

Roggespierre's Maxim #6
Courtesy of Ken Homa, Georgetown University McDonough School of Business

Remedial would be Kind

At which stage would say that Terry Angstadt and Brian Barnhart operate? I would argue that they presently reside at top of Professor Homa's list and at the bottom of the motorsports management heap. Not all of the problems are their fault, of course. Unfortunately, their proposed solutions are not really solutions at all.

Note that I do not include Tony Cotman in my analysis of IRL management because his responsibilities and authority are unclear to me.

IRL management is Reactionary in almost every conceivable way. The league is indeed fighting to survive. To that end, we have ample and compelling evidence.

1. Pursuing arbitraged sponsorships that are intended to preserve the status quo despite the absence of demonstrated demand for the racing product.


2. Establishing a race promotion contract with the publicly subsidized promoter of the undersized Barber Motorsports Park.


3. Attempting to convince the City of Baltimore and the State of Maryland to subsidize a 2011 street race.


4. Renewing a Honda engine and sponsorship arrangement that forces IndyCar teams to work with a rent-seeking supplier that is bleeding the IndyCar enterprise of much needed cash.


5. Attempting to secure robust financing in exchange for a non-strategic race in Brazil.


6. Seeking corporate dollars rather than consumer acceptance.


7. Allowing powerful teams disproportionate influence with regard to selection of the new specs that are to be introduced in 2012.


8. Failing to realign IndyCar TEAM so that it might improve the IndyCar product to achieve market acceptance.


9. Chasing short-term pay days rather than establishing a sustainable cost structure that might lead to a more salable product and increased U.S. television ratings.


10. Choosing to believe that it is incapable of competing with the dominant market leader.


11. Turning its back to virtually all empirical data and pursuing a market position that has very limited upside, at best.


12. Attempting to force a demonstrably unwanted product on the market, rather than recognizing and adapting to consumer demand.
    

Toward a Market Competitive IndyCar Series: Fell the House of France!

I would like to see an IRL management team that might reside at the bottom of Professor Homa's list and the top of the U.S. motorsports market. The IndyCar Series needs Revolutionary managers! However, leadership of that type will require expertise in fields that have little or nothing to do with either sales or racing operations. I believe in all sincerity that the future of the great Indianapolis 500 Mile Race depends on it.

Acquiring such a management team is in the interest of the Indianapolis Motor Speedway Board of Directors. Now that the 2009 IndyCar Series season is nearly complete, I hope in earnest that the Board will commence with the job at once.

Roggespierre

IndyCar Maxim #5

Roggespierre's Maxim #5
Courtesy of Philip Kotler, Northwestern University Kellogg School of Business

"Who should ultimately design the product? The customer of course."

This begs the question: who is "the customer" with regard to IndyCar racing? We have argued that race fans in Middle America would be a good place to start because the Indianapolis Motor Speedway needs to attract hundreds of thousands of them over the course of a month.

The Target Audience has Spoken

These consumers have proven to be a robust market for NASCAR (sans-culottes!) Cup and Grand National. There is no reason to believe that they would not also enjoy an IndyCar product that is designed for them.

Begin with cars that are low-tech in terms of aerodynamics and electronics. These technologies have proven to add more cost than market value. The schedule should consist primarily of oval tracks, although road courses and street circuits should not be taken off the table so long as they enhance market competitiveness.

Of course, the IndyCar product requires easily detectable elements of differentiation - it should not be an open wheel imitation of NASCAR. Engines that are either turbocharged or supercharged would be helpful in that regard because they would lend a distinctive sound to IndyCar racing. Open cockpits must be kept. Conversely, wings and chassis tunnels are costly and unnecessary.

We would like to see the fuel tanks reduced to 10 gallons eventually and 15 gallons immediately. Fuel conservation leadership in U.S. motorsports would give IndyCar a relevant advantage over NASCAR. That is not to say that Indy cars should be slowed to NASCAR speeds; they absolutely must remain faster.

If the teams want an engineering challenge, then they would certainly have one, trying to simultaneously increase mileage and speed. More important, the challenge would be correlated with something that has become important to many fans. The same can not be said for the "overtake button" and wicker adjustments.

Tire supply should be severely restricted - one or two sets per race is reasonable. This would save money and put a premium on the drivers' ability to maintain pace without wearing out the tires. Danton notes that he is unimpressed with Firestone's ability to build a racing tire that is great for all of 80 miles. He would prefer that the teams run the same set of tires in all 17 races, just as the rest of us expect a set of tires to last at least a year.

But that would be too much, too soon. Limiting each team to one or two sets of tires (plus spares) per race is change enough, for now.

This is a brief and incomplete outline, we admit. But it would give the league a differentiated, relevant product that is designed to attract drivers that could draw the core fans that IndyCar racing desperately needs. Some teams would hate it. So what? The days of creating racing series for teams rather than customers are long gone.

Roggespierre

IndyCar Maxim #4

Roggespierre's Maxim #4
Courtesy of Clayton Christensen, Harvard Business School

"...the job, not the customer, is the fundamental unit of analysis for a marketer who hopes to develop products that customers will buy."

We invite IndyCar management to re-read Professor Christensen's quote, taking time to note the implicit assumption that product development is the job of marketers. This is important.

If marketers are responsible for product development, then it follows that those who work either in racing operations or for suppliers of racing teams are not. These individuals should be consulted, but they should not have final authority.


Who Cares about Torque Curves? More Cup Holders!!

Auto sales in the United States provide a good example. Engineers and designers dream-up all sorts of neat technology-based ideas for cars. They are therefore loathe to admit that one of the most important design innovations so far as U.S. auto sales are concerned is.... more cup holders! This is why engineers should not have final authority in product development.

Product development of the modern Indianapolis 500 Mile Race was more or less accidental, and yet it worked out well. Such cases are increasingly rare as marketing evolves into an analytically sophisticated, data-driven exercise.

We invite IRL Management to consider, as Professor Christensen might say, the jobs that customers are trying to get done via IndyCar racing. Do they want to witness gut-wrenching danger? Have a good time with friends? Confirm that their city of residence is somewhere important? Establish lifelong memories of experiences shared with their children? Hang out with hot babes? Get drunk and engage in debauchery? Take in colorful pageantry? Feel as if they're hip? Get away from people who are not like them?

Like any product, IndyCar Racing can't assist in each of the "jobs" above. Serving one market, as we like to say, necessarily means not serving another. But we do know that establishing a product culture of some kind will be of far more benefit to IndyCar racing than marginal aerodynamic changes, push-to-pass, or even new race cars. The latter, in fact, should be consistent with the product culture.

That way, you need not claim in successive seasons to be the "green" racing series, the "value opportunity" of the sport, and the "international" series, when in fact you are none of the three.

Roggespierre

IndyCar Maxim #3

Roggespierre's Maxim #3
Courtesy of Ken Homa, Georgetown University McDonough School of Business

"There are four keys to effective supply chain management."

1. Smooth synchronization of activities
2. Fact-based evaluation of performance
3. Fair compensation for services
4. Authentic commitment to partnership

Much more from Professor Homa, a brilliant marketing guy (and Prof of Roggespierre) can be found here.

IRL management, please pay particular attention to numbers 2 and 3 from Professor Homa.

2. It is a fact that your production costs exceed the price at which your product can be sold.
3. Fair compensation for services would include distributing appearance money based on product value (i.e. a driver that consumers actually want).

Who at the IRL has the analytical skills to make data-driven decisions? Who has the courage to stare down the bullies? Who can articulate what IndyCar is and what it is not? Who has the charisma to explain controversial choices to those who disagree?

We know who runs the racing and who does the selling. But who is managing the product? Who is managing the firm? Does anyone at IMS know the answers?

Roggespierre

IndyCar Maxim #2

Roggespierre's Maxim #2
Courtesy of Michael Porter, Harvard Business School

"The essence of strategy is choosing what not to do."

• Oval racing, road racing, street racing...
• National, international, intercontinental...
• Technology and cost containment...
  
• An hour of USA patriotism prior to Indy 500 with fewest American starters ever...
  

What, exactly, have you chosen not to do, IRL management? The market is segmented, whether you want to believe it or not. Your firm owns the world's most famous oval, and it's located in the Midwestern United States.

What will it be, IRL management?

IndyCar Maxim #1

Roggespierre's Maxim #1
Courtesy of Peter Drucker, Harvard Business School

Serving one market necessarily means not serving another.

You can't be both Wal-Mart and Barneys New York. Wal-Mart has a lot more shoppers and makes a lot more money.

You can't play both football and soccer. Fans of both sports will hate you for it. When you own the world's largest sports facility, and it's located in Middle America, which game do you think you should play?

What's it going to be, IRL Management?