Why The Best Performing Companies Behave Like A Cycling Team

Back in the early years of this century, the U.K. had gone years without any real success in the sport of track cycling. Then, along came David Brailsford, a former professional cyclist who happened to have an MBA. As an article in the Harvard Business Review recounts, he transformed a team that had won a single gold medal in 76 years of trying into a superpower that won seven of the 10 gold medals available at the 2008 Beijing Olympics and then matched it four years later in London.

Fascinated by Kaizen and the idea of continuous improvement, Brailsford, who was knighted for his achievements and went on to lead a highly successful British team in the Tour de France, has attributed the success to “marginal gains.” His theory was that, rather than focusing on some big goal, the team could get ahead of its rival by breaking down the mechanics of cycling and seeking to improve each element. In the HBR article, he tells the interviewer what this entailed. “By experimenting in a wind tunnel, we searched for small improvements to aerodynamics. By analyzing the mechanics area in the team truck, we discovered that dust was accumulating on the floor, undermining bike maintenance. So we painted the floor white, in order to spot any impurities. We hired a surgeon to teach our athletes about proper hand-washing so as to avoid illnesses during competition (we also decided not to shake any hands during the Olympics). We were precise about food preparation. We brought our own mattresses and pillows so our athletes could sleep in the same posture every night. We searched for small improvements everywhere and found countless opportunities. Taken together, we felt they gave us a competitive advantage.”

This is a highly impressive attention to detail that is so obsessional that it is surely deserving of success. It is also reminiscent of how dedicated to improving performance are the best companies.

The effectiveness of such an approach is set out in an article in the latest edition of Strategy & Business, a publication by the PwC management consultancy. Entitled “The Secret to Accelerating Performance: What Winning Companies Do Differently,” it makes the link with elite sports at the outset. “Little things count when a fraction of a second makes all the difference,” it says. “The same holds true for top-performing companies.”

Pointing out that “getting some things right” can help make an organization competitive, the authors write that truly boosting performance requires bringing together dozens of management practices and investment decisions as part of a larger, dynamic system. But for those that persevere the rewards are massive. The consultants’ research indicates that the top companies achieve a performance premium, measured as the combined effect of profit margin and revenue growth, adjusted according to industry, 13 times greater than that of their peers.

Clearly, this is a prize worth having — like all those gold medals. But how can executives get their hands on it? PwC reckons it boils down to three key things.

1. Making mutually reinforcing decisions in their business, operating and technology models.
2. Continuously reducing friction, both within the business and outside with customers and partners.
3. Ensuring leaders are up to the task and able to recognise and act on threats and opportunities.

This looks straightforward enough, but the consultancy stresses that leaders of winning companies “understand the need for ongoing transformation and focus their efforts accordingly.” To help those seeking to follow in their footsteps understand what is required, it poses six questions:

1. Are you a transformational leader, who facilitates collaboration, camaraderie and conviction?
2. Do you demand — and expand — return on investment, investing and diverting with an eye on both financial and non-financial performance?
3. Are you ready to pounce on M&A and other opportunities?
4. Do you prioritize relationships with customers and truly understand their needs?
5. Do you look and listen, finding ideas and inspiration beyond your industry and peers?
6. Are you obsessed with securing the right outcome, aiming for reinvention across the enterprise rather than just functional excellence.

This last question is perhaps the most telling. Outperforming in a highly competitive world requires a relentless, obsessional mindset — much like that needed to be successful in elite sport. For the truth is that the real winners know that they can never stand still, but must be forever improving — and that focus takes them further and further away from the others.

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