In one of my lectures on strategic change I use a quote from Professor Larry Greiner, formerly of the Harvard Business School, ‘The clues to future success lie in the past’. I use it to explore the notion that every organisation has a unique history and it is only by understanding that history and using it to build future success that organisations can succeed in a way that is impossible for their competitors to copy. Let’s face it, most organisation’s today have very similar strategies, what makes the difference is their ability to deliver the strategy and the uniqueness they bring from their past. When you look at success stories like Apple and Harley Davidson you can see that the key is that they build on their past successes in ways that are relevant to present and future markets.

Never has the principle of remembering your past, but adapting to the future been more readily demonstrated than in Formula 1. Enzo Ferrari was first and foremost a builder of racing cars, he moved into supplying customers with versions of his racing cars to help fund the racing, but he was never a mere automotive manufacturer. Ferrari’s focus on the cars led to suggestions that he disliked drivers becoming too successful and would often manage things to suggest that ultimately it was the car that was the reason for winning, not the driver. A strong focus on the car has permeated many of the F1 teams in the UK, with Lotus, McLaren and Williams all concerned with the racing car as the focus, of course they wanted good drivers, but ultimately it was all about the car. Frank Williams’ famous mantra for anyone wanting him to sign a cheque was always ‘Will it make the car go faster?’.

The story at Red Bull Racing however demonstrates a very different history. Dietrich Mateschitz supported by his driver coach/mentor Dr Helmut Marko was never into cars. His focus has always been unequivocally on the driver. Red Bull entered F1 not as car maker, but as a sponsor with a clear focus on developing driver talent. They bought a stake in the Sauber team in 1995, and in 2001 introduced the Red Bull Junior Team under the guidance of Dr Marko. The purpose of Red Bull Juniors was to develop young talent, and ultimately to move them into F1. This included a young German, Sebastian Vettel, who Red Bull had first supported driving karts in 2000 when he was 12 years old. In 2001 Mateschitz had a disagreement with Peter Sauber; Mateschitz wanted Enrique Bernoldi in the car, whereas Sauber was keen on a young Finn called Kimi Raikkonen. As a consequence Mateschitz withdrew his funding from Sauber and looked to purchase the struggling Arrows team to provide a seat for Bernoldi. This failed to work out, but in 2004 he was looking for a drive for a young Austrian driver, Christian Klein, and in discussions with Jaguar Racing discovered that Ford might be interested in selling the team. He purchased Jaguar Racing with the initial intention of keeping the existing management team, but a disagreement over…wait for it… drivers, meant that they were relieved of their posts and Christian Horner became the new team principal at the start of 2005.

So in the end what we have is a very different history that marks Red Bull Racing ultimately as a team constructed for Red Bull drivers to show their talent, not, like Ferrari, McLaren or Williams for the building of racing cars, and like most aspects of an organisation’s history, it is both a strength and a weakness. So what happened in the 2013 Malaysian Grand Prix is perhaps less surprising than you may think and maybe what arises from Vettel ignoring team orders is more a question for Christian Horner and, particularly, Adrian Newey as to the kind of organisation they want to work for, and the kind of history they want to leave behind, than it is for anything related to drivers or indeed cars.

Luca Marmorini, Ferrari’s Head of Engines, has been quoted in Autosport.com as saying that it is important that Ferrari have a second (ie in addition to Sauber) customer for their 2014 power unit – note the term ‘power unit’ as effectively these are engine + energy recovery systems, so the simple term ‘engine’ no longer seems to do it justice.

The reason for this concern is that their current second customer Toro Rosso have recently announced that they will be shifting to a Renault power unit in 2014, which makes sense organizationally as they are co-owned by Dietrich Mateschitz of Red Bull with Red Bull Racing, so presumably they can share more data during development and racing and therefore improve the performance of both teams. However Toro Rosso’s location in Faenza makes Maranello the ideal partner from a logistical point of view as they are literally a few kilometres down the road. Location matters in F1, otherwise we wouldn’t have Motorsport Valley in the UK, and so the proximity between the power unit supplier and customer cannot be ignored. For this reason, Marmorini hopes that all is not lost with Toro Rosso and that they may review their decision to go to Renault, as he says on the Autosport site:  “I don’t know if Toro Rosso will be with us next year. We are still working very well with them now. They’re an important contribution to Ferrari engine development, but I also think we are giving them a competitive engine.”

A key factor in this is data. Derek Gardner, the now sadly departed designer of the six wheel Tyrrell, told me that a key problem that they had with the six wheeler was the speed of development of the front tyres, which were far smaller than the standard F1 front tyre that Goodyear supplied to all the other teams. As a consequence they were getting far less data on the performance of the tyre – as it was only fitted to two cars and so were unable to develop it as fast as the other which had feedback from twenty four cars (there were 13 teams racing back in 1976). Data therefore is everything if you want to improve performance.

So currently it seems (and things could still move around a fair bit) that if Toro Rosso move to Renault then Renault will be the leading supplier with power units in five teams: Red Bull Racing; Toro Rosso; Lotus; Williams and Caterham. Mercedes will be supplying power units to three teams: their works team plus McLaren and Force India. Ferrari will be supplying two teams – themselves and Sauber. It seems very unlikely that Cosworth, who currently supply Marussia, will be in the frame for 2014 (but never say never) and so who knows, we may see Ferrari supplying the power unit for Marussia, which will make an interesting dynamic in their race with Caterham to tenth place.

The Future of FOTA

December 7, 2011

The news that both Ferrari and Red Bull Racing are planning to withdraw from FOTA has led many to suggest that this is the end of the team’s association. Clearly it is better for the teams to act as one if they wish to get a bigger share of the FOM revenues, but as seems to always happen, self interest is the decider at the end of the day. They are all agreed that they want to reduce costs – doesn’t any organisation? The important question is therefore how do you do it? When you’ve got your own bespoke test track then a ban on testing means you can’t use one of your key assets to improve your performance, so you can see why Ferrari would feel that being in FOTA isn’t in their best interests, RBR are in a different situation where their business model is a very different one to the other teams, so, again it may make better sense for them to go their own way. Of course we also have HRT who were the first to leave FOTA back in January 2011. The other reason rumoured for the departure of Ferrari and Red Bull Racing is the issue of third (or fourth) cars where constructors are allowed to sell/loan their cars to other teams, a practice well used in the 1950 and 60s. Stirling Moss’s legendary victory for Lotus at Monaco in 1960 was not achieved for Lotus Racing, but for Rob Walker’s private team using a Lotus 18. This is an issue which FOTA has been divided on and it could be argued that building more cars would effectively reduce the costs of certain teams such as Ferrari and also for RBR, whose original concept was to provide cars for Scuderia Toro Rosso. It’s just a very different way of achieving the same objective.

However regardless of the reasons for Ferrari and RBR to leave the team’s association, does this spell the end of FOTA? As history has a habit of repeating itself, it is interesting to note that in the controversies around previous Concorde Agreements, there were three teams who were united in refusing to sign up to the fourth agreement which was due to run from 1997 to 2002. They were McLaren, Williams and Tyrrell. In many ways it was this stand that led to the financial demise of the Tyrrell organisation, a team who had dominated F1 in the late sixties/ early seventies. Eventually a revised, fifth, agreement was drawn up which included the three teams and was to run from 1998 to 2007. The current (sixth) agreement is to run until the end of 2012, and this is where the negotiations are focused. The point of history is that the three teams who resisted the fourth Concorde Agreement are very much at the heart of FOTA today, McLaren providing the chairman, Williams a committed participant and the team that was originally Tyrrell Racing has now morphed into Mercedes GP (sorry Mercedes AMG GP!), via spells as British American Racing and Honda, with senior management team Nick Fry and Ross Brawn very much committed to FOTA. So even if FOTA doesn’t represent all the F1 teams, it may represent a significantly powerful voice that can influence the terms of the seventh Concorde Agreement, if it holds together.

There is no question that Sebastian Vettel is a worthy driver’s champion for 2011. He had the best car, but he rarely put a wheel wrong, and so his title is undoubtedly well deserved. I do feel that Sebastian, like Lewis before him, is very much a champion who, although a worthy champion, is still highly dependent on the support of the team for the title, this I would contrast to other champions who really lead their teams to victory. It is the difference between someone who is dependent on the team for their success and someone the team is dependent upon, someone who brings the team up with them.

I guess the contrast I would draw would be the difference between Michael Schumacher at Benetton where supported by Flavio Briatore, Ross Brawn and others he achieved two world championships, here he was a champion, but not a leader. In contrast, during Michael’s time at Ferrari he played a very key role in turning round the whole organisation , becoming the catalyst for change and winning the greatest number of championships that have ever been won, Michael grew from being a champion to being a leader. Similarly, I would also put Fernando Alonso in the leader category, he played a key role in the success of Renault in the 2005/6 seasons and has gone on, with a brief blip at McLaren, to do the same at Ferrari. If we look back into previous champions individuals like Ayrton Senna, Alain Prost, Niki Lauda and Jackie Stewart all fit with the leadership role. The interesting question for me is where Jenson Button is on this, in many ways he seems to be stepping up to the leadership role this season, not only through his performance on the track but his demeanour, his confidence, his approach are all suggesting something stronger than a driver who just gets in the car and performs on the track.

So the obvious thing for Sebastian to do now, or certainly in a year or two, is to move to a new team that needs a leader and see if he can shift up a gear from being world champion, not easy, but some have done it. Who knows, like Michael at Ferrari, he may even persuade Adrian Newey to come with him.

With a few exceptions (mainly the desperately boring European Grand Prix at Valencia) 2011 has been a superb series of races. And of course we did have the rain factor in Hungary, but the excitement was already there, it was just the icing on the cake.

Winners

Jenson Button: What a great way to celebrate your 200th Grand Prix and the place where Jenson won his first race back in 2006. Jenson may not be Alonso material, but he’s a great character and on his day, unbeatable. It could have been very different, I actually think he may have pitted if he’d been in front of Lewis when the rain started to come down, but that’s conjecture on my part. A great result and who knows what will come next.

Sebastian Vettel: Although he didn’t win, he was ahead of both his main rivals for the championship – Lewis and Fernando. This was a good championship banker for Sebastian and still makes him the favourite. He is now almost 100 points ahead of both of them (notice I haven’t put Mark Webber down as a rival), and that means they need to win four races with Seb not picking up a single point to overtake him. Not very likely.

Martin Whitmarsh: Martin has come in for a bit of stick regarding McLaren’s performance, I have no idea why, as he is doing a brilliant job. McLaren have prided themselves on being the only team that can run two ‘number one’ drivers, however this has often been at the cost of much intra-team rivalry and friction (Senna/Prost; Hamilton/Alonso), and it has to be said that Ron Dennis’s partial approach to drivers has often appeared to fuel such tensions. Martin Whitmarsh has a different style and one which is about fairness, balance and the team. Undoubtedly there is a good relationship between Jenson and Lewis, but it is the team approach that will either build or destroy this, congratulations to Martin and McLaren for giving us such great racing yesterday. If McLaren had used team orders it would have been so much more boring and we wouldn’t have seen the best of Jenson or Lewis.

Losers

Lewis Hamilton: It was a big shame for Lewis as he deserved a far better result than he ended up with, but he took the outcome with stoicism and for that he probably should have been a winner as well! There is much more to come from Lewis in the second part of the season.

Team Orders: Towards the end of the Hungary race I was reminded of Austria 2002, the day when Jean Todt, oblivious to the views of F1 fans across the world decided to get Rubens Barrichello, who had outdriven Schumi all weekend, to pull over and allow the Schumi-meister to win the race. Undoubtedly Todt’s motives were sincere and for the benefit of the team, but in reality they did far more damage to the team and their lead driver. Contrast this with Lewis and Jenson fighting tooth and nail for every last piece of the abrasive Hungaroring circuit and you realise how much racing team orders can destroy. Let’s hope all teams reflect on this and think how they can get the best out of everyone and put on great racing, because that was what we witnessed yesterday.

So which do you think was the better race – a grand prix that lasted over four hours and where spectators had to endure hours standing in torrential rain, or a sunny, on time race in a beautiful Spanish city? Montreal and Valencia could not have been more different, and the biggest difference was the racing – in Valencia there really wasn’t any.

Winners

Vettel: Sebastian seems to have moved his driving onto a new level, and despite the mistake in Montreal which created Button’s victory, he really is looking untouchable. Hard to see how he can now lose the 2011 title, but stranger things have happened.

Ferrari: Despite a lot of criticism Ferrari seemed to be the only team with the race pace to keep RBR in check. As usual Fernando is the one that is always there to find the sudden opportunity. He could still win this championship.

Lewis’s radio broadcasts. I always enjoy Lewis claiming 100% visibility when it was chucking it down, as he did in Montreal. In the end it didn’t do him any good, but his radio broadcasts are always entertaining, or LOL as my daughter would text. I particularly enjoyed ‘ I can’t go any slower’ when his engineer was asking him to be more careful with the rear tyres, followed by ‘I can’t go any faster’ when it looked like he was dropping back towards Felipe Massa. F1 would be so much duller (yes really!) without Lewis.

Jaime Alguersuari: Alguersuari has come in for some (undeserved in my view) criticism in the last few races. He silenced his detractors in Valencia with a great drive from 18th on the grid to 8th in the race.

Losers

Valencia Circuit: Although it looks great, with the bridge and the old gothic fish market, but since the first grand prix it has only been able to produce mind numbing processional ‘racing’. Given that Bernie has always said there are too many European Grand Prix, it has always been strange to have two Spanish races, if we have to have two can we find a better track?

McLaren: McLaren made some good calls in Montreal, but the race really didn’t work for them in Valencia, perhaps it was the high downforce, or perhaps they don’t go well at boring tracks, let’s see what happens at Silverstone.

Michael Schumacher: Finished 17th, unlike some, I’ve been very reluctant to write Michael off, but as Vettel looks more and more like a champion, Michael looks less and less like one.

The Canadian GP was over four hours long from flag (or rather lights) to flag. It was also quite the most extraordinary race that we’ve seen for some time.

Winners

McLaren: It has to be said that so far this year McLaren do not appear to have really delivered on the promise their car has been showing. But that changed in Montreal, well it certainly changed for one of their drivers and the team must take a fair amount of credit for opting for the high-downforce setting, something that neither driver seemed particularly happy about during qualifying, but it paid off in the race.

Jenson Button: It is perhaps a bit unfair that Jenson’s Championship season was achieved in an outstanding car, and one which most people remember for the rather creative interpretation of the regulations relating to rear diffusers. However it has to be said that on his day Jenson is peerless and this was another one of those days, he showed the kind of controlled aggression that you only associate with the best of Champions. There are still a lot of races to go (although not quite as many as Bernie might have liked) and there is still plenty of time for things to shift in the championship stakes in Jenson’s favour.

Charlie Whiting: Race Director Charlie Whiting often gets a lot of stick over this or that, and particularly from Martin Brundle relating to how long the safety car is out. Of course we don’t want to see safety cars, but we want to see loads of wrecked cars and injured drivers much less. I think he achieved a great balance between anticipating undrivable conditions and keeping the racing alive for the fans. I was convinced the race was going to be called off during the red flag period – not because I wanted to watch Antiques Roadshow - but because I felt that was the lower risk route. But he didn’t and what a race we had. Thanks Charlie.

Sir Stirling Moss: Stirling has retired from racing at 81 years old after giving himself a fright on the Mulsanne straight at Le Mans, the equivalent of what most other 81 year olds might feel batting along the pavement in their mobility scooters. What an absolute winner, never a champion, but one of the most respected drivers of all time, and someone who Enzo Ferrari rated as the closest to Nuvolari he’d seen, you don’t get higher praise than that.

Losers

Lewis Hamilton: Lewis could have won this race, but in the way that Alonso is often ahead of his car, Lewis seems to be ahead of everything, particularly the car in front, before he’s passed it. There seems to be an air of desperation about Lewis’s driving. Let’s hope he’s got things a bit more under control for Valencia.

Ferrari: As in Monaco Ferrari showed great promise for the actual race with Fernando not really being able to mount a serious challenge. Filipe had a rather erratic race, but redeemed himself with a last minute charge to take sixth away from Kobayashi.

Team Lotus: With one HRT and two Virgins ahead of them at the end Team Lotus won’t have been happy with their days work. They need to start making progress if they want to seriously challenge Toro Rosso, Sauber, Williams and Force India.

Monaco is always a great spectacle, it is also a bit of an anachronism in terms of F1 tracks, but then that’s what makes it so special. This year’s race also underlined the dangers that are always present when racing takes place, the accident which befell the talented Sergio Perez (who looked like he was going to go well in the race) was very reminiscent of the accident that ended Karl Wendlinger’s F1 career back in 1994, only weeks after the deaths of Ayrton Senna and Roland Ratzenberger. When you see a driver remain still in the car after an accident that is always a very worrying scenario, but the most distressing part was watching Perez’s father clearly beside himself staring at the TV screen in the pit garage and wondering what had happened to his son. Fortunately it looks like Perez and Petrov will be OK, so we got away with it again, the quest for safety is one that should never stop.

Winners

Vettel: It cannot be denied that Sebastian had luck on his side at this race, the big question was how long he had with his tyres, McLaren estimated that they would ‘go over the cliff’ in a few laps, when the red flag allowed him to restart with fresh tyres, I wonder if luck will continue to smile on Seb through the rest of the year, or has he now had his quota?

Racing: Yet again we had an exciting race, and overtaking at Monaco! Some great moves, particular those involving Schumacher and Hamilton (Michael overtaking Lewis at the hairpin, and being overtaken by him at St Devote). Michael, unlike his earlier races, showed how to both overtake and be overtaken while keeping on the road!

Alonso: Another stellar performance from the man who (using Denis Jenkinson’s terminology) is ‘a racing driver ahead of his car’. Alonso could well have won the race if Vettel’s tyres had gone off. Ferrari have done the right thing in signing him up till 2016.

Pastor Maldonado & Williams: OK, Pastor was actually taken out just before the end, while in 5th Place, but this was the second time he had made it into Q3 and had driven a great race. But Rubens did at least get them some points, if only two of them. Keep it up team Willy, we want to see you back where you belong!

DC’s commentary: I have been rather negative on DC as a commentator, and felt that he was very much being propped up by the very experienced Martin Brundle, however in Monaco their roles seemed to have reversed with DC being a lot more authoritative and insightful than his former manager. Sometimes it’s a pleasure to admit you were wrong.

Losers

Regulations: The prospect of Vettel, Alonso and Button battling out in the final laps with different levels of tyre degradation was an amazing prospect, but sadly one that was denied us by the regulations. Perhaps next time they red flag a race they should be prevented from changing tyres?

McLaren: They showed so much potential before the race, and Jenson had been very well positioned to make a bid for the lead, should Vettel and Alonso’s tyres fall away, but it wasn’t to be. I’m sure they’ll be even more determined in Canada to reign in Red Bull.

Hamilton: Lewis can always be expected to provide drama at a Grand Prix. I love the way, like Alonso, he nevers stops racing, no matter where he is in the field. However this time his frustrations seemed to really get the better of him. Ron Dennis once said ‘show me a good loser and I’ll show you a loser’. Well Lewis is not a loser, but perhaps he needs to give some thought to being a bit more gracious on those occasions when he is, but then if he did he wouldn’t be Lewis would he?

So with things now underway for the 2011 season do we now have a clear picture has to how the season will pan out? If we take the lessons from Bahrain in 2010 then the answer has to be no. As you may recall the Bahrain 2010 race was pretty boring and suggested that all the changes for that year hadn’t really worked, but what we ended up with was one of the most exciting F1 seasons ever. So Australia was not the most exciting race, a number of teams (RBR and McLaren) appeared to be continuing their 2010 form, a number of teams seemed to have fallen back (Mercedes and Williams), whereas some had moved forwards (Renault aka Lotus Genii), the Pirelli tyres seemed to be a lot more durable than anyone had anticipated, Sergio Perez looks like being the new find of the year and Martin Brundle got things off to a good start in his role as BBC ubercommentator.

The key lesson from Bahrain 2010 seemed to be that one race is never sufficient to pick up on trends through the season. Back in 2009 everyone was writing off KERS (particularly strong advocates BMW discarded their system), but Ferrari and McLaren got theirs to really deliver as the season developed, so there’s no reason to believe that this won’t be the case in 2011. The thing that the teams need is feedback to understand what is working and what isn’t and they will now be absorbing all the lessons from the first Grand Prix of the year to put into the second, and the third.. and so on.

So the main lesson is let’s give it a few more races before we jump to any conclusions.

The current dispute between Tony Fernandes’ Lotus F1 team and Group Lotus, owned by Proton cars, underlines the importance of brands and who owns them. Formula 1 is a brand business, F1 itself is owned by CVC Capital Partners, a brand which they protect and enforce in order to make significant returns on their investment. But even Formula 1 is secondary, in terms of global presence, to its most successful team – Ferrari, and it is the Ferrari brand that provides an example to all in F1 as to what can be achieved from fast cars and motorsport. Of course the irony is that Enzo Ferrari wasn’t interested in building brands, he just wanted to win races and his road car operation was only there to fund the race team – the exact opposite of the other automotive manufacturers who have typically looked to F1 to help them sell road cars. And it is probably for this reason that the Ferrari brand has always been so different and so enigmatic.

A number of teams have attempted to emulate Ferrari, the most recent being McLaren. McLaren’s foray into high value road cars and other luxury items such as audio systems have underlined McLaren Group’s aspiration to become a global brand to the same value and impact as Ferrari. There is clearly a long way for them to go, but their recent move away from the Mercedes brand and their focus on a new road car, the McLaren MP4-12C, has indicated a clear strategy where the F1 team is a key element, but not the only component in a brand building activity.

Enzo Ferrari was famously contemptuous about the British constructors during the sixties and seventies, referring to them as garagistes and assemblatori, in other words he did not consider them to be proper race car manufacturers, but it was also recognised that the one person he really respected was Lotus founder Colin Chapman, you only need to read Enzo’s foreword to Jabby Crombac’s excellent book on Chapman, “Colin Chapman: The Man and His Cars” to recognise this. Chapman’s Lotus was the thorn in Ferrari’s side during both their heydays from the sixties through to the late seventies. The most remarkable thing about Chapman was that he was not only a very capable leader and negotiator as, of course, was Enzo, but he was also a brilliant engineer. If you track the evolution of the F1 car from 1960 through to 1980 the majority of the major innovations and trends were down to Colin Chapman. The Lotus team were famous for their ‘all-nighters’ during this time and we are not talking about partying until the small hours, but working on the cars, rebuilding and modifying through the night to ensure that Chapman’s latest tweaks and ideas were incorporated in the car before the race. During this period Lotus was the name and brand that was equal to, and often beating Ferrari. And like Ferrari, Lotus also had a flourishing road car business, focusing on both tuning existing mass produced cars such as the Lotus Cortina with Ford and the Lotus Sunbeam with Chrysler, and producing light, innovative sports cars such as the Lotus Elan and Lotus Elite. They were in a different space to Ferrari, less of the luxury and more of the fun and performance.

And so today what we see between Tony Fernandes’ Lotus F1 team and Malaysian car manufacturer Proton’s Group Lotus is a battle for the Chapman legacy. Proton acquired and rescued the ailing Lotus company in 1996. Through investment in new products such as the Lotus Elise they sought to regain the ethos and spirit of Lotus, with a relatively low cost sports car that acquitted itself well on the racetrack and also used innovative technologies such as a bonded aluminium chassis. Certainly in rebuilding the business they did not see F1 as an essential ingredient, and focusing at the club level they have rebuilt the Lotus motorsport presence. Then along comes Tony Fernandes and Mike Gascoyne with a vision and passion to rebuild the Lotus F1 team, locating in Norfolk and using the Lotus name licensed from Group Lotus. The new team is very much the best of the new entrants it has impressed on the paddock and (most importantly) Bernie Ecclestone that they mean business and are here to stay. In reaction to this event Group Lotus appear to realise that there is an opportunity here, they recruit Dany Bahr from Ferrari to help build up their brand, who then brings in a number of Ferrari personnel and then start to look at running their own GP2 race teams in conjunction with ART and Felipe Massa’s manager Nicolas Todt. The licensing deal with Tony Fernandes falls apart and now the lawyers are going to get rich.

Of course this is all about ego and power, something that crops up in F1 rather frequently. But isn’t it a real shame that they can’t work together and, as in the old days, have both Group Lotus and Team Lotus working off each other, driving forward the Lotus name to become a global brand exemplifying fast cars, high performance and competition? Perhaps good sense will ultimately prevail and if they are able to work together maybe they’ll even have Ferrari worried.

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