- What is the Management 500?
The Management 500 is the real-world race that business managers compete in every day to generate three consecutive years of sustainable, profitable growth. It is relatively easy to generate one year of profitable growth, particularly if the manager is taking over a very weak or a very strong organization at the right time in the marketplace. The far greater challenge is to generate significant profitable growth for three consecutive years in a way that is sustainable for the long term.
I wanted very much to get away from the focus on quarterly earnings growth, which I believe is a large source of the current economic meltdown. When a manager becomes maniacal in improving ninety-day results, he or she can easily lose sight of the negative long-term impact the decisions have on the organization's desired business outcomes.
- Why did you use professional auto racing as the source for the practical management processes in this book?
To be honest, the concept evolved over time. At first I wanted to write a book called The Acceleration 300. I was going to have 300 ideas with a one or two paragraph explanation for each of them. After I put that together, I didn't feel it would have the impact I wanted.
Then I thought about putting together a management resource manual where a manager could pick up the book, turn to the table of contents, find the section he or she wanted, and just read those one or two pages. I thought about making it like a car manual that you would keep in the glove compartment of your car. After reading several car manuals that idea lost its zest for me.
Then I saw the Indianapolis 500 in the paper and thought I could write a book called The Acceleration 500 with the idea of a three-year business race instead of a three-hour auto race.
Then before a keynote speech that I gave for a BMC Software International Sales Managers Conference the senior vice-president of global sales spoke about Enzo Ferrari. That was the turning point for me. I realized there was a whole universe within auto racing that I could research for management insights.
And what a ride it has been, no pun intended. It turns out that professional auto racing provides an extraordinary array of useful analogies for modern business managers to learn from. There is so much more to auto racing than just the race itself. There is serious work done on branding and strategy and timing and teamwork. I couldn't have asked for a better comprehensive analogy of business than all of the pieces that comprise the world of professional auto racing.
- What were the main insights you gained from auto racing that business managers can use right away?
I'll answer that question with a series of code words: precision, qualifying, calmness, teamwork, innovation, leadership, problem-solving, purposefulness, and branding.
There is an extraordinary degree of precision that goes into the engineering, design, and care for the cars. The drivers themselves prepare with a remarkable attention to details in getting physically and mentally ready for the races. I've found this same characteristic in the very best business managers I've worked with.
Professional drivers know they don't get the best positions at the start of a race because of their age or past successes. They know they have to qualify for the best positions during the qualifying event for each race. The past is behind them and they have to prove themselves for each race. Great managers realize that their resume won't carry them once the business race starts. They have to earn respect and trust from other people all over again each time.
The very best drivers stay calm in the midst of absolute chaos and so do the best managers. They learn how to go fast slowly.
From engineers to crew chiefs to the drivers themselves, innovation is a constant in the world of auto racing. After each race long discussions are held on how to improve the performance of each car and the overall team. The best business managers I've studied in a host of different industries all worked consistently to find ways to improve the performance of their businesses. In other words, they were innovators.
Leaders within the auto industry represent very different styles and approaches.
A problem occurs when an actual performance falls below the expected performance and the reason for the gap in performance is unknown. Solving problems during an actual auto race oftentimes makes for the difference between winning and losing. The same is true in business. Finding the cause of a poor performance and resolving it can make the difference between profitable growth and business disasters.
At the foundation of every success story in auto racing is a profound sense of purpose. As I peeled back the lays of the auto racing onion, I found a heart. A great big pulsating heart. Actually I found a lot of hearts. Passion is the key to success in auto racing. It allows drivers and their racing teams to persevere through very difficult times in order to win championships. And that passion comes from an extraordinary sense of purpose on the part of engineers, drivers, crew chiefs, crew members, mechanics, owners, staff members, and fans.
The auto racing industry is all about branding. A brand is about perceived value. The drivers themselves become incredibly powerful brands, and corporate brands want to be associated with winners. It is the ability to build powerful brands that creates the financial wherewithal to compete at the highest level.
- Can you give some examples from your book?
Michael Schumacher is one of the greatest drivers in history. He won seven Formula 1 Grand Prix World Championships. In his very first Formula 1 race, he went a few feet before his car died. He tried to go too fast too quickly. He went on to learn how to go fast slowly, and it made all the difference.
In his autobiography, Enzo Ferrari talked about purpose a great deal. He wrote, "Fate is to a large extent within our own hands as long as we know what we want and remain steadfast in our purpose." Ferrari demonstrated extraordinary precision, purposefulness, and innovation in his quest to design and build the world's greatest racecars.
Dale Earnhardt., Sr. is a great example of leadership, purposefulness, problem-solving, and branding. He had no money and no sponsors until he was twenty-eight years old. He became one of the oldest rookies in NASCAR history and a year later he won his first championship. He went on to win six more championships and became one of the most famous athletes and best-selling brands in the world.
Lee White, president of Toyota Racing Development, USA, taught me that innovation is not a once a year thing in the auto industry. It's an everyday thing. He said, "Dan, a problem is anytime we don't win a race…We never stop working to improve, and we certainly never stop thinking about ways to improve." His passion for innovation matched that of Enzo Ferrari.
Geoff Smith, president of Roush Fenway Racing, taught me the importance of investing to win. He said if a significant item for improvement has been identified and the ROI can be a good one then the investment is made.
Ed Laukes, head of Toyota Motorsports, taught me about the principles of branding and how they apply to Toyota, motorsports, and businesses in general.
- What should managers watch for in auto racing that might provide them with useful ideas?
I suggest you watch everything. Watch the way the crew members interact with each other during an oil change. Observe how the drivers act after the race. Listen to what the crew chief has to say about the upcoming race. See how the fans respond to different drivers and ask why they feel certain ways about certain drivers. The whole auto racing universe is filled with powerful ideas that you can use in your business. The key is to go to a race, get there early, and study everything you can.
- What is the most surprising pattern you uncovered in the book?
The auto racing industry is filled with very serious people doing very serious work. Professional auto racing is not about wild and carefree people taking crazy risks. Instead it is about paying extraordinary attention to detail toward helping drivers go as fast as possible for as long as possible in the safest manner possible.
I interviewed Lee White, the president of Toyota Racing Development; Ed Laukes, the head of Toyota Motorsports; and Geoff Smith, the president of Roush Fenway Racing. They made it very clear that to be successful in professional auto racing you have to get everyone in your organization dedicated to taking his or her piece of the overall job very seriously for the entire year. This isn't about a few days of effort leading up to a race. This is about consistent, well thought-out efforts to improve performance for extended periods of time.
To win the Management 500, business managers can't rush in with one big idea to save a quarter or a year, and certainly not the whole three-year race. Winning in business, as in racing, is about consistent, applied effort over the long term.
- How does this book compare to your previous books: ACCELERATE and Corporate Catalysts?
My first book, Corporate Catalysts, was essentially a series of essays on how any employee can step up and make a difference in an organization. It was written right after the debacles at WorldCom, Arthur Andersen, and Enron had occurred. It is filled with a lot of tips that any employee can use to improve an organization's results and build a long-term successful career.
My second book, ACCELERATE, is essentially the diary of an executive coach. I studied my notes from over 1,500 executive coaching sessions and more than 3,000 hours on-site observing executives and managers in more than thirty industries. Then I outlined the twenty biggest lessons I learned from watching very effective and very ineffective executives and managers. The scope of this book is large in that it focuses on how individuals, groups, and organizations can accelerate the achievement of their desired outcomes. However, every lesson is explained through a real-life story from my experience as an executive coach.
My third book, The Management 500, is filled with practical management lessons from the history of professional auto racing. It is similar to my earlier two books in that it is also filled with very practical advice that can be used immediately to improve business results in a sustainable way. However, my focus is very tight and concentrates solely on the role of the business manager who is responsible for the overall performance of an organization or a business unit within the organization. Within that framework, I do focus on a variety of topics including leadership, strategy, branding, teamwork, and innovation.
- What was your most memorable experience in researching The Management 500?
First, I found a rare original edition copy of Enzo Ferrari's autobiography. This book was extremely motivating and insightful. Written in 1963, it helped to explain the reasons for the amazing long-term success of the Ferrari brand.
Second, I had the opportunity to interview Lee White, the president of Toyota Racing Development, USA. Lee's passion and sense of purpose was so remarkable that it reminded me of what I learned from Enzo Ferrari. I then spoke with Ed Laukes, the executive who oversees all of Toyota Motorsports in the United States, and he gave me some very helpful insights into how NASCAR strengthens the brands of car manufacturers, and, more importantly, he shared his thoughts on how any business in any industry can strengthen its brand.
Third, I interviewed Geoff Smith, the president of Roush Fenway Racing, which in recent years has become one of the top racing organizations in NASCAR. He shared with me powerful insights on how to compete successfully and strengthen not only your organization's brand but also the brands of your sponsors.
However, the most interesting day of my research was attending the 2008 NASCAR Sprint Cup Series LifeLock.com 400 at the Chicagoland Speedway. The race began at 7 PM, and I drove into the parking lot at 11 AM, eight hours before the action started. Or so I thought. It turns out that I was attending my first NASCAR race as a fan on the exact fiftieth anniversary of Richard Petty's first NASCAR race as a driver, which was on July 12, 1958.
A NASCAR race is so much more than just a car race. It's a Super Bowl event. There were 75,000 people there, and I estimate there were at least 20,000 people tailgating at 11 AM. I repeat this was eight hours before the race started. It's a giant carnival, with actual old-fashioned barkers yelling out that they had free offers inside their tents. It's a giant concert with singers and entertainers on stage all day. It's a massive outdoor mall with over 100 booths selling caps, shirts, buttons, miniature cars, giant corn dogs-and even some lemonade stands.
A NASCAR event attracts every conceivable brand name product. I walked through the largest Abraham Lincoln museum I'd ever been in outside of Washington, D.C., and Springfield, Illinois, and it was on wheels. I saw a display of dozens of the largest and most magnificent televisions I had ever seen. However, the strongest brands there were the racecar drivers themselves. People of all ages wore shirts with the faces and numbers of their favorite drivers.
There are forty-three drivers who compete at each NASCAR Sprint Cup Series race and there are thirty-six such races each year. This is a traveling circus that is bigger than any circus I had ever witnessed. And then there's the race itself. You haven't heard LOOOUUUDDDD until you've heard a NASCAR race. If you haven't been to a race, then watching it on television doesn't explain the speed well either. These cars were within a few inches of each other going at 160 mph and jumping from high to low on the turns in the track.
The whole day pulsated with lessons both inside and outside the track on branding, innovation, teamwork, strategy, execution, planning, problem solving, winning, dealing with change, and preparation. It was an amazing experience.
- What do you want readers to take away from The Management 500?
I want managers, both in for-profit and not-for-profit organizations, to have a set of well-explained practical processes they can use immediately to convert their resources into greater value for their customers and generate better sustainable results in the most important desired outcomes for their organizations.
- I noticed that the book is dedicated to your parents. What role did they play in the making of this book?
My parents, Gene and Laura Coughlin, are both eighty years old as I write this. As I look back on the total scope of their life's work, which was primarily the raising of their six children, I see them as the perfect example of what I've tried to get across in this book.
They took a long-term view of their role as parents. Neither of my parents went to college, but they set a goal that each of their six children would receive a college degree. They sacrificed a great deal financially in order to stay focused on that long-term objective. They felt education was the key to the long-term success of their children. And then they focused with precision day after day after day on winning that long-term race.
My oldest brother, Kevin, graduated from college in 1978 and my youngest sister, MaryEileen, graduated in 1991. That means from 1974 through 1991 they had at least one child, and sometimes as many as three children, in college every year. They sustained their focus for seventeen consecutive years to make the dream a reality. However, the truth is they really began thirteen years before that in discussing and planning for their dream to come true.
Between them, they provided diverse leadership styles alternating between supportive coaches and strict disciplinarians. They built a great sense of teamwork as each of us children supported each other toward being successful. They innovated and found ways to survive through multiple economic storms in the early 70s, mid-80s, and early 90s. They had a long-term strategy and they stuck to their plan. They made sure each of us understood our roles and responsibilities, and that we each did what we had to do to win the overall race.
I honestly can't think of a better model for managers who aspire for long-term greatness than my parents. Through this book, I've tried to convey to readers what I learned from them on how to achieve significant and sustainable improvement in key results.
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