LAST WEEKEND I not only had the pleasure of seeing Andy Murray become the first British man to win Wimbledon while wearing shorts, but also to spend a day with the Caterham F1 team at the German Grand Prix.
While Caterham still has some way to go to achieve the kind of success enjoyed by Murray in their respective sports, I was struck by how both employed the principle of marginal gains. Famously coined by British Cycling’s performance director Dave Brailsford the principle of accumulated marginal improvements has become a sporting given.
Yet, the theory is equally true for business. While on the one hand the Caterham’s mechanics, technicians and computer analysts are harnessing the power of big data to improve the car’s performance based on minute adjustments, much the same can be said for the running of the team’s finance function.
Though decidedly less glamorous than the on track performance, the same focus on efficiency is taking place behind the scenes. Take for instance how the cars are painted. Caterham changed the paints/process and managed to reduce the cost by 80% but with the same quality of finish.
Similarly, the team partnered with Truphone – a telephone network that allows you to pay local tariffs on international calls – and managed to slash its phone bills. This might seem of limited importance to a team that is run on a multi-million pound budget, yet it is part of an ethos that runs throughout the team.
If finance directors were to adopt Brailsford’s theory of breaking down everything that goes into riding a bike and improving it by 1%, it would add up to a significant increase when those small and seemingly unimportant gains are put together.