Editorial

Will CART's next leader be a corporate visionary?

 by Mark Cipolloni
November 5, 2000

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Outside of hard core race fans, CART has a serious name recognition problem.  Whereas most people on the street know who or what NASCAR is, for the majority of the population, CART is nothing more than a grocery shopping cart.  And although the term 'indy car' is pretty much understood by the average person on the street as an open wheel car that races at Indianapolis, say  CART' or 'Champ Cars'  to someone and you'll likely get a, Huh? Er....What's that you say?  Unless CART can do a good job of branding their form of racing, CART will be nothing more than a niche racing series.  CART must brand its form of automobile racing.   'Entertainment' is the avenue by which it must happen and it will take a 'corporate visionary' to pull it off.

There is a widely accepted notion that entertainment and business exist in two separate realms. Entertainment is done during leisure time, business during work time. However, there is growing evidence that the two realms are becoming increasingly mixed. In his new book The Entertainment Economy, Michael Wolf takes the point a step further by arguing that entertainment dominates the modern, global economy.  CART may be a racing series, but it is an entertainment business first and foremost.  Race fans buy tickets to go to a race and be entertained.  As you read this article we hope you will begin to understand why CART is interviewing some powerful people from the entertainment industry to become its President and CEO.

Michael Wolf's book provides much evidence that entertainment and media have moved beyond culture to become the driving wheel of the global economy. For example, children no longer go to McDonalds for food, but rather for entertainment value defined by its toys and play structures. Similarly, shopping malls have become theme parks, retail stores entertainment venues as much as shopping outlets. 

One of the key themes that emerges from The Entertainment Economy is the increasing difficulty of standing out in a media and product saturated world. In this new environment, Wolf notes consumers today face an "avalanche" of choices. Brands crowd the commercial scenery placing customer time and attention in high demand. In addition to a media clutter best exemplified by the proliferation of cable television channels, there has also been a concurrent product proliferation.  Talk about media clutter, NASCAR so clutters the racing media with its brand of racing, the American public, for the most part, thinks NASCAR is racing.

In this increasing flood of media and products, as well as the increasing number of companies practicing the E-Factor, just getting noticed (let alone making the sale) is becoming more and more problematic.  This is exactly the problem CART has with NASCAR.  Wolf observes, "Given the pervasive impact of entertainment in our economy today, companies must exceed the efforts of their competitors to amuse, arouse, and inform customers. In other words, companies need to provide entertainment experiences that engage consumers." Large, mainstream businesses, though, seldom possess this entertainment expertise "in house" and therefore the quickest route to an E-Factor company for them is hiring top management from the entertainment industry. This has caused an influx of entertainment executives into traditionally non-entertainment companies. A few examples: Disney executive Richard Nanula leaves to run the Starwood hotel chain; Viacom executive Ed goes to Citigroup; NBC's Warren Jensen goes to Delta airlines.

The lesson learned by McDonald's is instructive here. As Wolf notes, "When McDonald's realized that Burger King was cleaning its clock with its Lion King and Pocahontas promotions (this is exactly what NASCAR will be doing to CART with its recent $100 million AOL and Turner Broadcasting Internet deal), it stepped up to the plate and completed an exclusive ten-year, multibillion-dollar marketing and promotional partnership with Disney. Their logic: Disney film equals major family entertainment phenomenon equals major boost in families eating at McDonald's to get 101 Dalmatians snow domes, Hercules figurine sets, and Mulan action figures."  Warner Brothers is distributing the CART movie DRIVEN.  Will CART enter into an exclusive ten-year, multimillion-dollar marketing and promotional partnership with Warner Brothers to help brand the name 'CART' around the movie DRIVEN and any sequels, as well as other Warner Brothers action figures?

Businesses need to be aware of new business cycles created in an entertainment environment. Wolf warns that "by incorporating entertainment content, businesses will more become subject to the compressed, hit-driven business cycle of the entertainment business. Things will be cool, and then they won't be." 

"Planet Hollywood offers a good example of this new quick rise and demise scenario. The entertainment strategy of the chain was built around the "nostalgification" of culture where people went to see entertainment memorabilia as much as they went for the food." "When sales plummeted as the public finally figured out that the display jackets that were worn by the cast of Grease probably tasted better than the chicken fried in Cap'n Crunch batter, marketers were put on notice that entertainment, though necessary, is no substitute for quality in the core product." The lesson here is that CART has a good core product, very competitive races, some of the best drivers in the world, but it can't do anything to jeopardize that core product (such as going to naturally aspirated engines that CART fans don't want).  If you notice, NASCAR hardly changes its core product.  NASCAR's basic rules stay the same.  They still race with tube frame chassis' and roll bars, push rod engines and carburetors.  In fact they still refill the cars with red cans that are wheeled to and from the gas pumps in little red wagons.  It's all nostalgic.

Yet, within all the glitz and glitter of entertainment, the cycles and synergy, it is often difficult to remember that making money is still the goal of the entertainment economy. Here Wolf reminds us that there are still only a handful of ways building revenue in the entertainment and media industry: 

• Selling admission to a venue (i.e. race tickets)

• Selling subscriptions (CART leaves this up to the magazine and book vendors)

• Selling audience access (CART pit and paddock passes, or indirectly thru TV for example)

• Selling products directly (CART licensed products, here NASCAR is cleaning CART's clock)

The result is that The Entertainment Economy leaves us with interesting food for thought. At the end of the book, Wolf waxes philosophical with the observation "…ultimately, it's really not about corporate behemoths, mergers, or finances, or the box on top of the TV set. It's about stories that move us, characters we can root for, ideas that transform the cultural landscape, special effects that take us to a world we've never seen before, situations and lines that make us laugh, and ideas that are universal, they forever change the way we live."  Entertainment is really about stories. As he notes in the final words of the book, "Humanity makes it impossible not to take notice of great stories, whether they are told around a Neolithic campfire or in the cathode-ray-glow of the digital hearth. It all starts with a well-told 'Once upon a time...'."   Did you ever notice all the 'Once upon a time NASCAR stories' folks like Benny Parsons, Bill Webber and Dr. Jerry Punch tell not only during race broadcasts, but also almost every single night on RPM2Night?   When was the last 'once upon a time CART story' you heard?

As Wolf states above, "It's about stories that move us, characters we can root for, ideas that transform the cultural landscape, special effects that take us to a world we have never been before....etc."  This is how NASCAR has built their drivers into likable, household names....by making them bigger than life superheroes, that are as down to earth as they come.  Earnhardt is the "Intimidator" character, Terry Labonte the "Iron man" character, Bobby Labonte the "Ice Man", David Pearson the "Silver Fox", and Richard Petty the "King".  What is Michael Andretti?  Gil de Ferran?  Christian Fittipaldi?  Now do you understand one big area where CART is missing the boat?

A number of scholars have argued that great business leaders are often great storytellers — they create compelling stories for their organizations. Renowned education theorist Howard Gardner of Harvard has done a major study focusing on outstanding leaders. In Strategy & Business, Gardner notes the basic finding of the survey was that "leadership involves the creation of powerful narratives, narratives that are much more than mission statements or messages. They are actually stories where there are goals and obstacles, where good and bad things can happen along the way and where the people involved feel part of the enterprise that's trying to end up in a better place." 

Like the heroes in stories, corporate leaders create a sense of drama, and conflict in building a corporate mythology. In effect corporate visionaries understand the key elements of building a strong story, whether this is understood consciously or unconsciously. The elements could be picked up from a book on drama or screen writing.  Pervading all is the drama of conflict, or the age old battle between the "good guy" and "bad guy." Perhaps one of the key qualities of the great business leader is that he/she can articulate the story and drama of their company so all employees can gain a sense of the heroic themselves.  NASCAR employees all seem to understand the folklore of NASCAR's history and the heroes of the past and the heroes of the present.  The corporate visionaries in NASCAR and F1 have done their job, and done it well.

Will CART's next leader be a corporate visionary?

The author can be contacted at markc@autoracing1.com

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