Why Red Bull Racing wins its races: 7 strategy lessons

Team sport & Schmitz’s critical role as a strategist

I like to watch the race on Sunday, and qualifying on Saturday if possible. Sometimes to the incomprehension of the rest of my family, who just don’t understand what’s fun about cars that drive 60 laps in a row. Their surprise is even greater when I want to watch the race after Verstappen’s retirement. And when it comes up that one car is faster than the other and that the budgets of the teams differ, the last bit of understanding disappears like snow in the sun.

Verstappen’s success has turned my attention back to Formula 1. But I do look at it differently than before. I see much more than before that it is a team sport. That there has to be cooperation during the race, by the drivers, by the pit crew and the team management. Red Bull’s absurdly fast pit stops last season are such a good example. But personally, what I enjoy most is the pivotal role played by strategist Hannah Schmitz in Red Bull’s success. After the race in Monaco I already posted a message about it on Linkedin. What I like is that the influence of her strategic choices is so beautifully visible in this sport. It is therefore grist to my mill that De Volkskrant also wrote an article about it last week with a similar purport. There are nice parallels with the importance of strategy for brands.

Below 7 great lessons from Hannah Schmitz and Red Bull Racing for marketers:

Lesson 1: You don’t always have to have the best product

Certainly last season Mercedes had by far the best car. Still, Red Bull Racing managed to keep up and Verstappen came through better strategic choices on a lead that he eventually just didn’t give up. Okay, maybe helped a little by luck in the last race. The difference is much less, but this season Ferrari actually has the better car. Nevertheless, Verstappen is now on a large lead, thanks to Schmitz’s best strategic choices and Ferrari’s strategic misses. The quality of the strategy has a greater share in Verstappen’s lead this season than the quality of the driver or the material.

This also applies to brands. You don’t have to have the best product to be successful. Of course, quality remains important, as well as aspects such as expertise, budget and service. But in the end, the choices you make and how well-founded and sharp they are determine how successful you will be. A good example are the blind taste tests between Pepsi and Coca-Cola, in which Pepsi invariably comes out as the winner because of the sweeter taste. Nevertheless, Coca-Cola is doing structurally better when it comes to brand value, brand awareness, brand recognition, brand preference, turnover and profit. Strategic choices and consistency make the difference.

Les 2: Stick to the plan

In other words, stick to the plan. Stick to your strategy and don’t be tempted to take ad-hoc actions in the event of a setback. This was also nicely visible last season: the luck factor seemed to be more present at Hamilton than at Verstappen. Where they touched, Verstappen was the one who couldn’t go any further. Hamilton seemed like the king of consistency with luck clinging to his ass. Nevertheless, Verstappen won the championship. How?

Apart from a bit of luck in the last laps of the last race mainly through tenacity. By not letting panic reign, sticking to the plan and continuing to believe in the team have been decisive in this. It is crucial to have confidence in your diagnosis and to keep trust in each other as a team. As Hannah Schmitz herself points out: “As a strategist you have to tell a lot of people what to do and they also have to listen to you, so it’s about building trust.” don’t be tempted to panic. Adjustments are of course allowed, if necessary on the basis of new data and diagnosis.

Lesson 3: Trust

With that quote from Schmitz, we can move on seamlessly to the next lesson: trust. Put together a collection of the very best people, but they don’t make a successful team until they start to trust each other. Having confidence is easier with the wind in your sails, of course. Red Bull’s confidence in Schmitz will be greater than the confidence Ferrari’s quarterback currently enjoys. Having trust and building trust in yourself and in each other deserves enormous attention, especially when things go wrong. As a marketer you can and should pay attention to this internally. Because if you don’t trust it internally, it will radiate externally. What then follows, you can probably fill in yourself.

Lesson 4: The dot on the horizon

I don’t think we need to mince words here. Knowing the (joint) goal and making sure everyone knows what to do to achieve that goal. The goal of Red Bull Racing is to win and everyone in the team knows what he or she can contribute to that. Make sure your overarching goal is clear, that everyone who contributes to it knows this goal and what it means for his or her contribution.

Lesson 5: Diagnosis – Strategy – Execution

First diagnosis, then strategy, then execution. I quote from the Volkskrant article: “Schmitz’s decisions are based on a stream of data. During a weekend, the sensors in Max Verstappen’s car send about 400 gigabytes of data to the team factory. Furthermore, state-of-the-art simulation software helps her to calculate countless racing strategies and scenarios.” A good diagnosis of all this data ensures well-founded choices. You make those choices in the strategy phase, based on your analysis. Only when you have made those choices do you move on to the performance. Sounds logical but proves difficult in practice. If you want to know more about this, I would like to refer you to Mark Ritson, for example in this article from 7 years ago.

The 6: Kies!

Obviously when we talk about strategy: make choices. Choices in what you will do and what you will not do (anymore). An open door because that’s what strategy is all about. Yet there are countless brands and marketers who do not choose. Who want to be everything to everyone, making them nothing to nobody. Choose. A reasonable choice is still better than no choice.

Lesson 7: How not to do it

A bit bland perhaps, but not only Red Bull Racing shows the importance of strategy. Ferrari also shows how important strategy is. After all, they manage to lose at the moment with the best materials, top budgets and top drivers.

They do this by constantly making the wrong choices. But the problem at Ferrari can be on several points:

• A wrong diagnosis and therefore not the right strategy and execution
• A good diagnosis but the wrong choices of the strategist,
• A good diagnosis and good strategy, but no confidence that makes the execution different
• Ad-hoc decisions that overrule strategy
• No clarity in choices, goals and sub-goals

Whatever the cause, the importance of a good strategy and a well-functioning team becomes painfully clear when you start paying attention. And whatever the cause, I wouldn’t like to be in Ferrari’s quarterback shoes right now. You do?