Monday, July 15, 2013

NASCAR Aims to Clarify, Update Rules

NASCAR this week is set to announce several competition-related changes aimed at accelerating its adoption of new technologies and clarifying its rules, penalties and appeals process.

The changes follow an eight-month review of its competition division by a committee led by NASCAR Vice President Steve O’Donnell, New York-based consultancy McKinsey and former Chevrolet executive Brent Dewar. It is the latest in a series of evaluations of NASCAR’s business groups that began four years ago with a review of its communications division.

NASCAR's four areas of competition changes

■ Deterrence: Change its approach from having NASCAR officials “catch” rule-breakers to putting more onus on teams to use the correct parts. That will result in spelling out penalties for breaking a rule.

■ Officiating: Incorporate technology into the officiating process.

■ Governance: Shift its rule-making responsibilities from its officiating group to its Research and Development Center, and refine its appeals process.

■ Rules: Formalize its parts-approval process and simplify its rule book, which will be available in a digital format. It is considering making the rule book available to the public for the first time.

As a result of the evaluation of its competition division, NASCAR will make several adjustments, including shifting its rule-making responsibilities from its officiating group to its Research and Development Center and developing a new, digital rule book.

“We’re envisioning a world where you take our rule book, and it’s a lot of words, and transform that to modern day,” O’Donnell said, adding that doing so would make NASCAR more transparent and allow it to work closer with manufacturers on incorporating factory-car technology into stock cars. 

“The ultimate goal is that my son, or a 13- to 15-year-old, is sitting in the car and having the same experience that Jeff Gordon is having. That they’re in essence sitting in the driver’s seat and reacting to the same information and technology the drivers are seeing.”

NASCAR executives hope that the emphasis on technology helps increase interest in the sport and boosts the bottom line.

O’Donnell said that shifting the responsibility for rule making from the officiating division to the R&D Center will allow NASCAR to develop rules that are forward-looking and viable for five or 10 years rather than reactionary and designed to address changes in parts and designs on a year-by-year basis. The ultimate goal is to reach a point where the R&D Center simultaneously develops new rules and new cars, such as a Gen-7 car that is timed to the release of new vehicles.

“We want to get fans excited potentially about new launches every year,” O’Donnell said. “The goal is to really lay it out to teams, [manufacturers] and our fans, so they can anticipate where we’re going long term.”

NASCAR also plans to incorporate technology into its officiating model. For example, it may adopt intelligent lugnut guns that could time a pit crew’s installation of a lugnut and make it unnecessary to have a pit-road official determining if any lugnuts are missing in order to assess a penalty. NASCAR could share the speed of lugnut installation with fans, enhancing the fan experience, O’Donnell said.

Another fan enhancement would come as a result of a new inspection process where teams would be scheduled for inspection and fans would know when their favorite driver’s car would be evaluated. Such a change would have the added benefit of allowing teams to shave a day of travel time off each race weekend, which would save them money.

Bringing technology to pit road could reduce the number of officials needed and save NASCAR money, but O’Donnell said any savings would be reinvested in hiring staff and adding technology at the R&D Center. The biggest financial upside he sees in the changes could be in new sponsorships. He pointed to NASCAR’s recent, multimillion-dollar deal with HP as an example.

“If we get this model right, where we’re able to showcase technology, I’d use our Green Platform as an example [of the potential],” O’Donnell said. “We were nowhere in that space and now we have [two dozen] partners involved. If we get this right, you’ll see tracks and teams benefit from an innovative culture.”

O’Donnell, who worked with a steering committee that included NASCAR President Mike Helton; chief marketer Steve Phelps; Robin Pemberton, vice president of competition; and Gene Stefanyshyn, vice president of innovation and racing development, said NASCAR will begin making these changes over the next seven months, but full adoption won’t be completed until the 2015 season. McKinsey and Dewar will continue working with NASCAR through the end of the year.

Source: Sports Business Journal

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