Keywords

Introduction

In this book, the Formula E phenomenon has been explored as a case for theorizing about sport management innovation. Drawing on Hamel’s (2006) framework for management sssinnovation, Formula E was chosen due to its mix of ‘a higher cause’ towards sustainability and the implementation of pioneering practices in organizational, technological, commercial, social and community-based contexts. Our model for sport management innovation, which derives from this exploration, is introduced below. At the same time, and as the exploration has demonstrated, Formula E is not a best practice example in all circumstances, and criticism of it as a dog and pony show is plenty. Therefore, we have applied a critical perspective to both the championship’s development history and the concept of innovation. In order to make the Formula E a case for others to follow, its shortcomings are as important as its successes.

As this book has explored the conditions for sport management innovation conceptually, and not as a testing ground for hypothesis, our theoretical grounding has been based on Jasso (1988), who—taking her cue from earlier theorists like Robert Merton and George C. Homans—claims that:

the purpose of scientific theory is to yield testable propositions concerning the relationships among observable phenomena. The heart of the theory, usually a small set of assumptions expressing connections between unobservables (combined with sentences defining the unobservables or describing how they are to be measured) operates as a device that enables the deduction (and possibly as well the induction) of propositions linking observations or classes of observations). (Jasso, 1988, p. 1)

In practical terms, a result of this approach is that theory ‘may suggest models of the subject matter, so that a kind of a schematic description results. Such description can be thought of as a pattern into which ideas may be placed for convenience and clarity’ (Skidmore, 1979, p. 3). Our understanding of theorizing towards this model draws on the three building blocks of theory development: what, how and why (Whetten, 1989).

The what concerns the factors (variables, constructs, concepts) that ‘logically should be considered as part of the explanation of the social or individual phenomena of interest’ (Whetten, 1989, p. 490). Bearing in mind Whetten’s warning about authors usually factoring in too many elements (Whetten, 1989, p. 490), we decided to keep things simple and expand further research opportunities, instead of chasing a model that tried to cover all the exits. The how concerns the ways in which the selected factors are related. As Whetten advises, we have made a visual depiction of the connectivity between the theory’s parts (Fig. 7.1). This does not mean an empirically tested causality chain, even though we agree with Whetten that: ‘Although the researcher may be unable to adequately test these links, restrictions in methods do not invalidate the inherent causal nature of theory’ (Whetten, 1989, p. 491). The why is a broader justification of these (assumed) causal relationships, or ‘the theoretical glue that welds the model together’ (neither Whetten nor his inspiration distinguishes between a model and a theory). Similar to Jasso’s claim that an ‘essential feature of the assumption set is internal logical consistency’ (Jasso, 1988, p. 1), a discussion about the why also providing a reason for colleagues to ‘give credence to this particular representation of the phenomena’ is in order (Whetten, 1989, p. 491).

Fig. 7.1
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A model for sport management innovation. Created with showeet.com

Full size image

Our response to Whetten’s how and why has been twofold. First, our analysis of Formula E applied the typology of sport innovation identified by Tjønndal (2017). Based on an extensive literature review, she identified five innovation types: social (when organizations and individuals are involved in social innovation by contributing to society in a positive way through sport), technological (the development and implementation of new technologies and technological advancements in sport), commercial (which often relates to how sports products and processes are marketed), community-based (when sports organizations partner local community groups to encourage working towards a common goal) and organizational (when sports organizations and government institutions pursue institutional change projects). Second, empirical episodes from the development of Formula E were then parcelled into a fitting type and discussed chapter by chapter. The main takeaway from this analysis when combining the findings is that Formula E as a ‘managed ecosystem’—which includes all types of innovation arenas—has been able to do what the originators of the concept see as a token of success: the capabilities to shepherd communities, leverage communities without exploiting them and share intellectual property rights (Altman et al., 2019). In this ecosystem, as explored through various aspects of the championship and its partners, monetary compensation is just one of the factors that explains the collaborative effort towards common goals. Other forms of capital are equally important, as contributors to the system ‘may gain experience, feedback from other community members, status, or other benefits (…) and they need to be convinced that this is worth their effort’ (Altman et al., 2019, p. 23).

Unlike the corporate authoritarianism in Formula 1, Formula E advances a different concept altogether to operate this managed ecosystem: inclusive stakeholder networking, encapsulate the racing in societal improvement efforts and attract women to the business and action instead of using them as ‘poster babes’ (notably with some embarrassing exceptions, see Chap. 5). Formula E—at least on the surface—therefore seems to tick all the right boxes. Yet, Formula E’s problem has not been convincing people that it is a good idea but convincing them to join the party and pay for it too. Although the early years were not as successful as one might think from today’s media hype, through clever management innovation, where targets have been achieved through shepherding, there is now, ‘a type of control that guides, directs, or steers rather than a more stringent control evident in more onerous contractual relationships such as vendor-supplier’ (Altman et al., 2019, p. 22; see Chap. 1), Formula E has grown from a start-up to a mature organization with a set of characteristics that are useful to other sporting organizations seeking to innovate its managerial processes. More specifically, we have discovered in Formula E a pattern of three processes that cut across all types of innovation and which have therefore become the basis of our model.

Process 1: Is It Possible (Or the Need for Proper Entrepreneurial Circumstances)?

The first process—entrepreneurial circumstances—is included due to our sociological approach to entrepreneurship. Most studies of entrepreneurship are flooded with definitions and biographical accounts of great inventors and the like. Here, though, we align with Watson’s (2013) replacement of the common view of entrepreneurs as ‘a special category of person’ (p. 408) with a group of people, an organization, or other corporate functions engaging in innovative deals benefitting the overall goals. It is therefore relevant that the societal aspect is included, since these entrepreneurial actors are embedded in ‘institutional logics’ (Watson, 2013, p. 413), which amounts to ‘a set of material practices and symbolic constructions—which constitutes its organizing principles and which is available to organizations and individuals to elaborate’ (Friedland & Alford, 1991, p. 248).

Expanding on new institutional theory, which emphasizes how organizations primarily change as a result of external pressure, studies based on institutional logics dissect the inner life of organizations. As evidenced by studies of institutional entrepreneurship, where the emphasis is on ‘the conditions and mechanisms that enable entrepreneurs to actively shape their institutional environment from within’ (Smets & Reihlen, 2012, p. 4), and as empirically explored in a previous study of FIA and its institutional logics (Næss, 2020), the facilitation of entrepreneurial capacities has a major impact on the development of hybrid organizations (those that are both corporations and non-profit entities). Principally, it exemplifies Watson’s claim that: ‘This presses them to innovate and devise new exchange relationships, this, in turn, pressing owners, leader and managers to act entrepreneurially’ (Watson, 2013, p. 414). In the previous chapters we have seen several examples in which Formula E’s management devised partnerships in all types of innovation fields. Had Formula E’s organizational integration tactics (see Chap. 2 in particular) only been concerned with one or two of them, according to the model the chance of success would have been much lower. Due to the interconnectedness of parties in Formula E’s reach, ranging from local vendors to global corporations and from community organizations to the UN, adhering to one institutional logic would not be sufficient.

Although Formula E is very much a B2B venture, it does—as noted in several chapters—rely on a business model where investments are far more important than revenue. These investments, which are conjoined by car manufacturers’ involvement in green mobility solutions and sponsors wanting to be part of the show, would not have been lucrative if a collaborative innovation approach had not been applied. Consequently, Formula E has practised an idea of entrepreneurial actors as those who ‘begin with the means available to them’ (Watson, 2013, p. 415), rather than searching for ways to realize a vision. This claim may seem odd given the airy ideas of Alejandro Agag and others back in 2011–2012, but the reality then was that he and his partners leveraged resources ‘to manipulate the structures in which the resources are embedded’ (Tracey et al., 2011, p. 62). Similarly, as claimed by Smets and Reihlen (2012), drawing on the sociology of Bourdieu, ‘when conceptualized as a positional system in which actors compete for various forms of capital … rather than a pure network of actors, the organizational field becomes the arena—and its institutional arrangement the focus—of competition between self-interested entrepreneurs’ (p. 5). In this scenario, where knowledge about the maturity of the field is related to the likelihood of change, so-called elite participants have more widely different points of view than ‘disadvantaged actors located in the periphery of mature fields’ (Smets & Reihlen, 2012, p. 5).

Despite Agag and his crew of co-founders, who can be considered as ‘elite participants’, an institution needs to be ready to accept new ideas. When Agag suggested the idea of Formula E to FIA President Jean Todt at a dinner in Paris in 2011, Todt used the institutional learning that he and FIA had acquired from global motorsports in the early 1980s, namely to take a proactive stance to harvest the entrepreneurial energy of the Formula E founders, rather than see it as a threat to FIA’s traditional governance. As explored in another study of FIA (Næss, 2020), this was possible because FIA practised ‘organizational emulsion’ as institutional logic. Although many organizations are hybrid in the sense that multiple logics co-exist or mix, this way of blending ways of operating an organization is unique due to its adaptivity to entrepreneurial ideas that challenge the current arrangements. When FIA—unlike IOC and FIFA—chose to separate the commercial and sporting branches of the organization in the late 1990s, following a battle with the European Commission, presidents Max Mosley (1993–2009) and Jean Todt (2009–t.d.) invoked the organizational equivalent of the chemical process of emulsions, which is either unstable or stable. The former state can be described as a process of mixing two substances that do not naturally mix. Shake them and they will come together briefly before separating again. However, by adding what in food science is called an emulsifying agent, a substance that prevents the two components from repelling each other, you get a stable emulsion—like whisking drops of oil into an egg-and-vinegar mix when making mayonnaise.

In contrast to media depictions of Agag as being on a crusade against old motorsport values armed with disruptive innovations, this agent is not contained in one drifty individual. Instead, we have found that Formula E’s entrepreneurial facilitation of incremental change in many small areas and many networks of the bigger phenomenon of Formula E is much more common. This stepwise approach to aspects of what the Formula E concept wanted to achieve (green technology, urban development and social responsibility, to name but a few examples), together with shepherding the communities taking part in the project and nurturing a productive relationship with the sport’s governing body, worked well for Formula E sport entrepreneurs. In the case of Agag, Formula E and FIA, it means adding substance to the problematic and ‘previously prevailing image of the ‘heroic’ entrepreneur who single-handedly takes on institutional structures’ (Smets & Reihlen, 2012, p. 11). With this collective approach to sport management innovation, Formula E nonetheless reveals its dependence on partners for realizing its goals. Some of these goals, as discussed in previous chapters, are not achieved due to political circumstances (like awarding races to some of the world’s most fossil-fuel dependent countries) or failure to finding the right partner (as in eSports). Formula E’s facilitation of entrepreneurial circumstances therefore provides valuable pointers to its limitations.

Dimension 2: Is It Doable (Or the Need for Timing)?

The second dimension is context-receptivity. Caza (2000, p. 230) argues that a key to ‘bringing process into the study of change and innovation lies in examining the simultaneous interaction of multiple contextual factors’ and that patterns of interdependence are more important than the particular details (Weick, 1979, cited in Caza, 2000). To identify these patterns, Pettigrew et al. (1992) emphasize the difference between receptive and non-receptive contexts. Whereas the former refers to ‘features of context (and also management action) that seem to be favorably associated with forward movement’ (p. 268), the latter refers to features that could block an idea, concept or product. Similarly, in the eStory Wilbaut (2015, p. 79) emphasizes that Formula E caters to the concept of ‘absorptive capacity’, that is the ability to recognize the value of new information, assimilate it and then apply it to commercial ends.

More specifically, grading receptivity reflects how amenable a given setting is to any particular innovation (Caza, 2000). A framework consisting of eight factors determining the level of receptivity was suggested by Pettigrew et al. (1992) and summarized by Caza (2000). These eight factors are as follows:

  1. 1.

    Quality and coherence of policy

  2. 2.

    Availability of key people leading change

  3. 3.

    Long-term environmental pressure

  4. 4.

    Supportive organizational culture

  5. 5.

    Effective managerial-clinical relations

  6. 6.

    Co-operative inter-organizational networks

  7. 7.

    Simplicity and clarity of goals and priorities

  8. 8.

    Fit between the district’s change agenda and its locale

Quality and coherence of policy entails ensuring a high level of consistency between concept, strategy and action plans. Availability of key people leading change refers to Pettigrew et al. (1992) and the ability of leaders to relinquish hero leadership ideas and instead concentrate on practising leadership as a way of building trust amongst employees as a leverage towards a common goal. Long-term environmental pressure relates to institutional logics (as addressed above), in the sense that sports organizations are influenced by their non-sporting stakeholder relations, which can create new incentives for organizational change. Supportive organizational culture refers to the circumstances that leaders and managers harness in order to reach the organization’s goals and make the process as enriching as possible. Effective managerial-clinical relations mean well-functioning patterns of interaction between frontline personnel and executives. Co-operative inter-organizational networks address the necessity of co-creation through bottom-up networks to establish sustainable change. Simplicity and clarity of goals and priorities connect to Formula E’s objective of creating a sustainable and spectator-friendly motorsport championship while making money for its investors along the way, despite the tremendous complexities in achieving it. Fit between the district’s change agenda and its locale draws on factors that are seemingly beyond the management’s control, but which are nevertheless important as potential obstacles (or opportunities) for change.

In practice, these factors interconnect. Girginov and Sandinski’s study (2008) of organizational changes in the Bulgarian hockey, swimming and weightlifting federations during the transition from communism to democracy exemplifies this claim. Identifying some of the factors influencing and creating the change, they suggest that ‘changing should be seen as a combination of a myriad of culturally specific transformations unfolding over time, which when taken in their entirety more fully inform our comprehension of organisational change’ (p. 45). In line with historical sociological studies in general (Calhoun, 2003), we argue that ‘sufficiently long’ timespans related to organizational development must be justified as relevant to the research topic. For our purposes, the timespan is not really a choice, as Formula E was launched as an idea in 2011, established as a championship in 2014 and approved as a world championship by FIA in 2020. At the same time, though, we acknowledge that in order to identify the factors influencing the context-receptivity of Formula E, we need to go further back in time. In line with how institutional logics theory emphasizes historical contingency—the notion that the core logic is subject to a number of prior events, circumstances and choices that are interconnected (Skelcher & Smith, 2015)—the current status of the car cannot be sufficiently explained without a broader view of its development in general and its relation to green mobility debates, electrification and identity-generating processes in particular.

That is why in Chap. 3 we briefly traced the development of the car in the twentieth century and the beginning of the twenty-first century and explained some of the reasons why the electric car was relegated to the tiniest of niches of car consumption available until Tesla came along. Tesla’s presence, alongside political initiatives in Europe to reduce carbon dioxide emissions and measures that force car manufacturers to take greater responsibility for the climate, enabled Agag and his partners to take advantage of this momentum through motorsport. What is more, the technological advancements of electric cars, and cities’ and corporations’ increased interest in including ecological sustainability work in their corporate social responsibility (CSR) policies, paved the way for an unholy alliance between car manufacturers, sponsors and politicians. With Formula E, racing in city areas and offering a complete concept that could be adapted to local desires across the globe with media coverage tailor-made for Generation Y, the family atmosphere at E-Village, and the integration of stakeholders in the event format as discussed in Chap. 2, a new way of drawing attention to the climate cause was established. By providing an action-filled part of the solution to a higher cause, that is what in Chap. 3 is dubbed as the double bind of late modernity, environmental sustainability and economic growth (Eriksen, 2016), Formula E has become an attractive partner to those striving for better living conditions. Its challenges, as noted in Chap. 2, mostly relate to financial calculations of the value of hosting these events and the debate about who is going to pay the bills.

Dimension 3: Is It Durable? (Or How to Make the Concept Last)

In order to be durable as a concept, and not just strive for eco-friendliness, Formula E cannot remain a business proposition for ever, regardless of how many ISO certifications it gets or how many heavy corporate actors support the races. Therefore, the final element of the model is drawn from the part of Formula E’s history that reveals the innovation pitfalls and potential of entering a sport in which conservative culture and norms dominate. Although that topic could be explored in many ways, our focus is on how the Formula E sport consumer was created. As Formula E was a brand new offering to motorsport followers, and gained a lot of attention for some of its fan features, such as FanBoost, the championship could approach the sport consumer without necessarily using existing motorsport fans as templates. Establishing a fan base is important, in that any commercial sport initiative would fail without it. According to Silva and Casas (2017), the equation is easy: ‘without fans there would be no demand to show games on tv and pay for those rights. In fact, without game-attending fans clubs would have problems attracting sponsors. The initial driver for a sport club’s growth is the development of a fan-base’ (p. 35). In 2018 in the US alone, spending on attending sporting events, including tickets, transportation, food and beverages, totalled $56 billionFootnote 1 and has therefore been the subject of many categorizations and ideal types in research (Runyan et al., 2009; Samra & Wos, 2014; Yoshida et al., 2015). Approaches to how fans can be understood include behaviour analyses, fan engagement channels, socialization incentives and brand personality relationships, to name but a few.

Former strategies for coping with the ‘mediatization of sport’ along these lines often point to segmenting sport consumers for conventional media or focusing on digital behaviour patterns. In contrast, Formula E combines segmentation (focusing on Generation Y) with blending online and on-site consumer engagement activities. Conceptually this mix is not new, but the way it has been implemented by Formula E as a sport experience design, or ‘SX’ (Funk et al., 2016), suggests that there is a need to examine its qualities from the perspective of the future fan. Three factors influence the SX design: the sport user, the sport context and the sport management (Funk et al., 2016). Seemingly, Formula E saw the sporting experience as central to the fan-building process. It can be argued that the fundamental economic offering of motorsport events is not services or goods, but experiences, here understood as the physical impression of amusement, education, escapism and sense-based encounters with the sport (Pine & Gilmore, 1998, pp. 30–35). Vital to this experience was the idea that the engagement of future fans on the basis of their characteristics is meant to be enacted in an increasingly diversified media, which could potentially create shorter attention spans and more distractions. Luca Colajanni, a Formula E media delegate, explains it like this:

With previous generations of sports fans, if you were watching you were watching. Full stop. There were no distractions from tablets, smartphones or social media. Today, young people’s attention is stretched. They have more choice, and they are more easily bored. They don’t want to spend time watching a show that lasts more than two hours. That’s a matter of fact. (Cited from Performance Communications, n.d., p. 30)

While both new and old kinds of fan engagement have been combined in motorsport, for example by Volkswagen’s ‘Rally the World’ campaign in WRC (Næss & Tickell, 2019), their transmedia storytelling principles are not necessarily transferable to an entire championship’s promotional platform—and most certainly not as capable of justifying a conceptual model. As a consequence, we wanted to explore, with the use of Formula E, how sport consumer engagement is created, rather than maintained.

First and foremost, in Chap. 4 we examined how Formula E reached out to Generation Y with new features that could engage people in the sport, such as FanBoost. An interesting find was that if your sporting organization promises to be high-tech, the expectations are even higher when it comes to gaming-related sport consumer content. Although the eSport initiatives and gaming projects in Formula E were not that bad, they were considered below standard in the light of the championship’s remaining focus on technology of the future. Second, we drew a wider picture of sport engagement by including how Formula E has made its mark on social issues, such as gender equality (Chap. 5) and community-based innovation projects (Chap. 6). Similar to how corporations attract talent through CSR policies in various parts of the world (Bhattacharya et al., 2008; Simpson & Aprim, 2018), Formula E has apparently tried to gather followers by stating its responsibility for things other than racing—such as with its recent partnership with BBC discussed in Chap. 6. At the same time, this is also the element in the model where Formula E has the most to gain in terms of being as equally innovative as its business. The rhetoric surrounding the races in Saudi Arabia and the use of popular culture to induce change without saying aloud that it is needed, and the support of the Girls on Track programme without taking social circumstances sufficiently into account, are two examples in which Formula E could have been truly disruptive in the light of the neutrality policies in sport organizations worldwide. However, it remains to be seen how the #PositivelyCharged campaign works out in terms of the general rise of athlete activism in sport (Gregory, 2020).

Conclusion

Does Formula E, as claimed by Skinner, Smith and Swanson (2018, p. 265), constitute ‘perhaps part of not only the future of sport but also the world’? Although our study of its innovation history is not sufficiently rich to answer that question, it nevertheless provides valuable input on how to solve the management challenges sport organizations are facing if they want to realize organizational goals. By exploring the four phases of management innovation—dissatisfaction, invention, inspiration, and validation (Birkinshaw & Mol, 2006, p. 85)—with Formula E as case example, we created a model to flesh out the concept’s theoretical implications for sport organizations that desire innovativeness.

At first sight, this model may not come across as particularly inventive. But this is a conscious choice, which is derived from our understanding of theorization introduced in the beginning of this chapter, as well from our intention to generate practical implications from our study. Like in many other studies, newness in a managerial context is viewed relative to the unit of adoption which makes it necessary at the organizational level of analysis, to consider innovation as new to the organization or the field it is located within (Damanpour, 2014, p. 1269). For sport management innovation purposes, in both research and practice, this is an important finding. Hopefully it contributes to a shift of attention from the sometimes pointless quest for newness as ‘never seen before’ to newness as creative combinations of existing, well-functioning ways of running an organization.

We therefore argue that the management innovation of Formula E fulfils the conditions Hamel (2006) pose as requirements for being a competitive advantage. By challenging management orthodoxy systematically and developing alternatives along the road, the previous chapters have exemplified how key agents in Formula E have shaped motivation, invention, implementation, and theorization and labelling—processes that collectively define how management innovation comes about (Birkinshaw et al., 2008). This conclusion makes our model applicable to other sports in a similar situation as Formula E, either for assessing the sport management innovation status of the mature organization, or as a tool for reviewing new ideas in sport start-ups that may become the next green saviour out there.