The North American Racing Team (NART) was more than just a private Ferrari racing team, as it was owned by Luigi Chinetti. An Italo-American race driver and later owner of the first Ferrari dealership in the US. Due to this status, NART could be seen as the official US racing team, participating in Daytona and the Panamericana, but also in the traditional European races.
In 1965 NART received the 330 P2. With this prototype race car they could win the 1000 km of Monza and the Nürburgring, as also the Targa Florio. One year later they still used these cars, including one with an over-worked engine and a new bodywork by Piero Drogo. The 365 P2, a white long-tail race car, nicknamed “White Elephant”.
In business life, a “white elephant” is defined as a project, which most likely will create a negative profit. This based on potential high costs and / or risks.
We take our formula:
Values + Strategy + Compliance = Sustainability
This is valid in a theoretical environment, where we have complete information. In reality our information is incomplete, in private and business life are always surprises to be expected. For this we need to be prepared for the unprepared. Our strategy must be able to handle unforeseen opportunities. The same is valid for an ethics & compliance program, as processes, guidelines and IT tools have to give the employee flexibility to answer the sudden opportunities of the market. This to avoid the temptation that employees try to bypass such internal processes. Further it is an important task of the company to prepare its employees to such situations. Several pressures are working together:
- Most employees (as sales department) have ambitious annual targets. A surprisingly appearing opportunity often seems to be the only possibility to reach them.
- People assume that such opportunities could disappear as fast as they appeared. For this sudden opportunities tend people to act fast and bypass their normal decision making process.
- Depending on a person’s character, employees overestimate their possibility to control a situation. This is especially true for “success seekers”, they tend to overestimate their own abilities and underestimate the risks of the situation. For the “failure avoiders” it is the other way around. Thanks to self-selection the first group of people will try to get more risky tasks with the goal that they can prove their selves and advance faster in their career, they will apply to positions in sales or become a race driver. In sudden and new projects they see the opportunity, but not the risk.
Compliance has to be aware of such psychological effects which can lead to ethical blindness. Counter measures can be implemented, as trainings & workshops, but also a strong position of the Compliance Officer is required, who has to be a trusted business adviser. White elephants are a big risk. A company may wrongly calculate the business risks, as costs are higher than expected, the company’s experience and products are not adequate or also the potential attractive project got won with bribery. This leads us to an updated formula:
Values (fixed) + Strategy (flexibly) + Compliance (flexible) = Sustainability
To offer the required flexibility and with this value for the business, Compliance cannot limit itself to approve or not approve, but if something is not possible, it has to be analyzed, if the same result can be reached via a different route. Most employees do not want to do something forbidden, but maybe not had been aware of the risks and specific regulations. Here the Compliance tasks are to adapt the related action, so that it complies with all laws and regulations. A good example is the mixture between GPS and social network: “Waze”. This App, available for Android and iPhone, tells the user the quickest way from point A to B, this is not always the shortest way, but also traffic and even police controls, construction sites or accidents play a role. Just as the app, the Compliance Officer guides the way through the unknown territory and keeping the employee on the legal paths; changing legal realities on the radar.
Back to the Ferrari 365 P2. Was it a white elephant for the company? From 1960 to ’65 the Scuderia won each year the 24 Hours of Le Mans. In this last year, even the whole podium was reserved for the Ferrari pilots. This result was also based on the fact the Ferrari’s strongest competitor the Ford GT 40 still lacked reliability. But race-luck changed in ’66. The GT 40 finally lasted the 24 hours and the Ferraris had to give up with accident (as the cars of the Scuderia) or technical problems, as the as “White Elephant”, which was deployed by NART. One year later the car came back to Le Mans, but this time featuring a rear wing. Already in the ’66 version the car was innovative, as Drogo designed a long tail race car especially for Le Mans and its long straights. Later to be copied by Alfa Romeo, Ferrari, Porsche and others. The same for ’67 as the car introduced the rear wing to endurance races. The race luck was still not with the car, as it had to retire after 30 laps. Just on the results this 365 P2 was a real white elephant. But on the long run, it was an important step in the evolution and influenced later successful designs.
- Henz, Patrick (2015): “Business Philosophy according to Enzo Ferrari”, 5.edition
- Investiopedia (fetched 16.03.2015): “White Elephant”
- Supercars.net (fetched 17.03.2015): “1966 Ferrari 365 P2 Spyder”