ORGANIZATIONAL CULTURE IN F1 AND AUTOMOTIVE: HONDA’S OVERALL OPPORTUNITY
Posted by Riccardo Paterni & Tim Angus on 30/08/2017

REALITY CHECK ENDURES

Fernando Alonso frustrations with the Honda power unit reached new peaks during last weekend Belgian GP. The situation has turned almost farcical; as Charles Bradley, Global Editor-in-Chief of motorsport.com reports: ‘Honda finds new way to frustrate Alonso.You could not make it up, as Honda found an all-new way to annoy Fernando Alonso in qualifying. Just after we marvelled at him taking Pouhon flatout, we got a familiar cry from the cockpit: “No power. No power. From Turn 11 to Turn 12. Half a second. How is this possible?” It was a rhetorical question, as we all knew who to blame. Honda's systems got confused by Fernando not lifting at the double-left hander, and failed to deploy the 160bhp burst that it should have on the run to Fagnes. He missed out on a Q3 spot by 0.084s – even after the bold effort of teammate Stoffel Vandoorne to give him a tow.’  

Regarding qualifying Alonso himself had bold statements to frame the current situation in the team as Pablo Elizalde, motorsport.com news editor reports: ‘The Spaniard looked set for a place in Q3 before he suffered a deployment issue with the power unit in his final run, meaning he lost over half a second and was therefore knocked out in Q2. Alonso, who was heard screaming "no power" on the radio, will start the race from 11th place. According to the two-time world champion's calculations, he could have been quickest had McLaren's not been hindered by the Honda engine's lack of power around Spa. "We would have liked to be there but in general it was a very positive day," said Alonso. "In Q2 until the final attempt we were 1.5 seconds off on a track where we know how much we are losing with the engine, so we would easily be in first and second positions." He added: "The battery didn't work and I lost six tenths from Turn 11 to 12. I was two tenths quicker than on the previous lap so I would have improved one or two more in the final sector, so we would have been in Q3 without any problems. "In the end, starting 11th with new tyres maybe gives us an extra opportunity so we'll try to take advantage tomorrow."

The next day, on Sunday, he has made a fantastic start reaching 7th position; it did not last long: he got passed by several cars in the straights of Spa with no need to use the DRS to pass him! Such the difference in power! While Alonso is arguably at the very top form of his career driving skills Honda keeps struggling, no matter what changes are made or announced… 

IF FERNANDO WOULD HAVE MET SOICHIRO …

Possibly Alonso frustrations could be somewhat mitigated if he would have had the opportunity to meet a top innovator and industrialist within the automotive industry; able to found from the ground-up a corporation that has been defined ‘the most automotive innovative company in the world’. This industrialist famously stated: “Success, can be achieved only through repeated failure and introspection. In fact, success represents one percent of your work, which results only from the ninety-nine percent that is called failure.” The author of the quote is the late legendary founder of Honda: Soichiro Honda, a person that got along very well with Ayrton Senna during the glorious times of the McLaren-Honda partnership at the end of the 1980s and early 1990s. 

Mr.Honda was a very straightforward man, always looking for improvements and better performances of its creations. Possibly he could get along really well also with Alonso since he always sought feedback geared towards improvement. Honda has been repeatedly pointed out as one of the most advanced and innovative companies in the world as pointed out by the acclaimed book “Driving Honda. Inside the World’s Most Innovative Car Company” by Jeffrey Rothfeder. Is the Honda F1 power unit developing in the spirit of Soichiro (time is running out by now) or in actuality is the company unable to express its grip on innovation and continuous improvement that characterises the cultural legacy left by its colourful founder?

HONDA’S ORGANIZATIONAL CULTURE: INNOVATION DRIVEN

Honda has a unique corporate culture that has been set by principles inspired by Soichiro’s way of thinking and doing things in a pragmatic, data driven, challenge seeking and inner organisationally inclusive way. These are Eastern mindset derived principles that leverage upon several factors. Jeffrey Rothfeder has analysed and identified: ‘individual responsibility over corporate mandates; simplicity over complexity; decision making based on observed and verifiable facts, not theories or assumptions; minimalism over waste; a flat organization over an exploding flow chart; autonomous and ad hoc design, development, and manufacturing teams that are nonetheless continuously accountable to one another; perpetual change; unyielding cynicism about what is believed to be the truth; unambiguous goals for employees and suppliers, and the company’s active participation in helping them reach those metrics; freely borrowing from the past as a bridge to what Honda calls innovative discontinuity in the present’. Soichiro Honda set this way of thinking that has become part of his legacy for a company that has grown step by step into a successful corporation in which people still represent a key factor, in fact ‘Honda’s factories are the least automated among carmakers, yet Honda enjoys the highest profit margins’.

How can it be that an organisation characterised by such a distinctive culture, set to focus on decentralised problem solving and opportunity development, struggle so much on its F1 hybrid power unit project? When four years ago Ron Dennis promoted the new McLaren-Honda partnership it seemed that all was in place for a similar path (in the mid to long term) of the legendary repeated successes with Prost and Senna at the end of the 1980s and into the 1990s. This is not happening and besides possibly leading to the demise of Dennis from McLaren may actually lead Honda to eventually give-up on this currently draining F1 venture.

OUT OF SYNC WITH THE F1 CULTURE

Some key organisational aspects recognized as representing barriers to an effective development are represented by practices directly derived from the legacy principles above mentioned: a) problems need to be solved in a decentralised way but leveraging upon their very own resources in a way that they can learn from these precious experiences (and failures); b) because of the intrinsic challenges that F1 technology has, traditionally the company has considered the racing context as a relevant training field for engineers set to develop their expertise and know-how within the automotive field. This means that the input of outsiders has traditionally been avoided.

In other words some aspects that represent assets in the development of Honda automotive projects are relevant barriers within the F1 ones; and what is happening right now has also happened in the past. Honda Racing F1 as a team raced from 2006 to 2008 and had Ross Brawn as Team Manager. As he points out in his recent book ‘Total Competition’: “they did bring me in and I guess that was a recognition that they had to change their approach. I think if you looked at the contrast between what would be the typical model of a successful Formula One team and what I perceive –and I am not that experienced –is a typical model of a successful Japanese company, they couldn’t be further apart. Therefore, when you have a Japanese company owning a Formula One team, it’s difficult –it’s almost two environments at their extremes. How do you bring them together to perhaps exploit the disciplines and philosophies and strengths of a Japanese company in the somewhat chaotic environment of a Formula One team and racing?”

Eric Bouiller, McLaren team racing director, in recent weeks has pointed out similar considerations relevant to the fact that Honda still needs to fully understand, and act accordingly, upon the organisational culture present in F1. "They only need one thing, which is to understand and integrate the F1 racing culture," Boullier told Autosport. "What I mean by that is: the way we behave in racing and Formula 1 is all driven by a calendar, by some fixed targets, fixed dates, lap time gains; we always try to go to the best solution as fast as possible. "Where a car manufacturer is running a project, you can have a few weeks delay and it's not going to change the product, it's not going to change the business model. "In racing, if you don't bring your upgrade for race one, in race one you will be nowhere. "That is this racing mentality. It's as far as going to suppliers and making sure that if they do something in one month, the next time they do it in three weeks, and from three weeks to two weeks. "We value more the time gained than the money spent. This is a different approach from the rest of the world." 

Notwithstanding Honda’s approach to continuous improvement, the corporate approach, is quite far away in its implementation from the F1 one that it is needed. 

WHAT’S NEXT?

First of all it is to be noted that from a technical point of view from the beginning of the F1 project Honda has taken an unique original perspective on the power unit design and development. This does match the spirit of the company legacy but at the same time has hindered the effectiveness of the project mostly within a context in which testing restrictions and the token system have no doubt represented a barrier to the power units effective development. After several organisational restructures within the F1 operation and after opening up to external cooperation and help (at one point it was rumoured that even Mercedes came to the technical rescue of their project!) it seems a fact that the UK based engine specialist Illmor has been cooperating with Honda to solve issues more rapidly. 

It appears that at the Belgian GP it has not been possible to utilise the latest project upgrade that has been rumoured as output from this cooperation. It has also been pointed out that Honda’s commitment to F1 is ever increasing with an expanded and more independent (from the corporate system) site in Brackley. These decisions have been taken also in order to become suppliers to other F1 teams (in itself a way to accelerate project development) yet initial talks with Sauber and Toro Rosso have gone nowhere and there are still question marks about the partnership with Honda. The next races are going to be no doubt crucial to the overall project, as time is running out fast; ‘too little, too late’ could be the right kind of expression in this context.

THE IMPORTANCE OF LEVERAGING ON CULTURE AWARENESS AND HONDA’S OPPORTUNITY

Organizational culture is the way to think through and do things on a daily basis, it is an action mode. It is always present whether or not it is openly affirmed. The key issue is that the more we are aware and we articulate it openly the more we can fine tune it to leverage on it effectively towards the set goals. In many ways Honda’s declared organisational culture seem to be matching in some aspects factors that are required in the fast paced, pragmatic, data driven F1 environment; in many others there is a clearly a mismatch of focus and overall objectives. Arguably a key issue here for the company is to push its legacy into the ever more complex context of business development towards ever more challenging targets; this is true both within the F1 environment as well as the automotive one that is set for a radical new technological and business model dawn. 

Legacies relate to values and values to be maintained and respected within new environments need new operational ways that still pivot on them. Honda with this current F1 project has the opportunity to utilise these experiences to upgrade the overall organisational culture; this would be in the spirit of the values and legacy set by Soichiro Honda. Yet as Bouiller has pointed out, time is the crucial factor in F1 and time (the implementation of innovation to market) is increasingly the crucial factor also in automotive.

As Ross Brawn states: “In terms of innovation and technology being applicable to modern road cars, I think a good crossover is methodology. I think culture is the thing that definitely crosses over.” “the culture and ‘can do’ philosophy in Formula One is really strong. When I have worked with manufacturers, with Ford, Honda or Bridgestone, certain companies took advantage of Formula One by placing their engineers into this environment. It was part of the training of their engineers.”

Time will tell if Honda catches this learning opportunity from the F1 culture; recently it has been reported that the corporation is in need of new approaches different from the ways it has been operating until now. A very recent article published in Bloomberg with the title ‘Honda's Solo Act Turns Risky in the Alliance-Happy Auto Industry’ should sound as an alarm bell to top management. 

Given all of this dynamics it is going to be interesting to follow Honda’s organisational culture moves both in F1 and in automotive (and in both cases the time frame relates much more to the short rather than the mid term).