Turnaround strategies in #F1

March 1, 2013

One of the fascinations of Formula 1, from a business strategy perspective, is how the same organisation suddenly shifts from being nowhere to a championship contender and equally how a championship contender suddenly ends up nowhere.

The obvious explanation for many is that it is simply all about money, the more money you have the better car you produce and the better driver you recruit so inevitably you will win more races. Not so. If it was all about money why didn’t Toyota’s huge investment in an F1 operation allow them to win a single race, even though today some of the top-teams are still making use of their wind tunnel in Cologne? If it was all about money then Renault would not have won their world championships in 2005 and 2006 and the team that was BAR and then Honda would surely have achieved more success on the track before they became Brawn in 2009?

Of course money is a key part of the equation. I remember former Jaguar Racing boss, Tony Purnell, describing Formula 1 as a ‘celebration of unfairness’, you can see his point, the richest teams have the most resource to get sponsors and performance on the track, and when they do well they get even more revenue from the distributed media royalties via Formula One Management, the more you have the more you can get. But that’s what makes it fascinating when the underdog does pull through. When Williams produced their FW07 car back in 1980 they were running on a shoestring and only could afford one week in the wind tunnel at Imperial College to try out Patrick Head’s ground-effect design, and yet they produced a better car than the all-dominant Lotus and went on to become world champions. When Dietrich Mateschitz bought Jaguar Racing for a ‘nominal sum’ (and all the debts as well – so in reality a bit more than £1) most could not see how he would turnaround a team that had showed potential as Stewart Grand Prix, but had become a corporate political football for various groups of Ford’s management to fight over and ultimately destroy, and yet today we all see them as the obvious favourites for the championship.

Today many argue that the technology is so tightly regulated and the focus so much on continuous improvement, rather than innovation, that we will not see the kind of turnarounds that we have seen in the past. I’m more optimistic, there is a huge wealth of engineering talent in F1 and it is not just about the superstars drawing the seven figure salaries, there’s a lot of creativity out there and maybe this year we could get a few surprises that show that at the end of the day performance in F1 isn’t just about money.

3 Responses to “Turnaround strategies in #F1”

  1. Paolo Aversa, Ph.D. Says:

    I agree with the argument in this article. Technological creativity can counterbalance the positive effects of wealthier resources. In addition, I’d stress that there is a tendency between F1 teams in assuming that more money correlates with more innovation. Not so, in my opinion. More money definitely allows to make more technological exploration, but this does not necessarily lead to more (or better) outputs. Instead, limited resources force teams to realized that they have few good shots available, thus pushing them to focus their efforts toward reaching the strategic targets. When technological change in the regulations throw the best-in-class teams off balance, even the minor teams can play their game with reasonable chances of getting good results.

  2. Paolo Aversa, Ph.D. Says:

    Reblogged this on Motorsport Strategy and commented:
    Can the power of smaller teams’ creativity counterbalance of the benefits of top teams’ better resources in F1?
    Read Prof. Mark Jenkins’ opinion.

  3. I find this quite an interesting subject, especially from within the sport. I’ve worked at quite a few teams, both large and small and the differences in approach are quite clear. I would say that with the exception of Red Bull, many of the large established teams are prone to making technical mistakes and find it difficult to react. Mclaren, Ferrari and Williams have had either consistent or sporadic poor form despite their massive resource .
    The model that many of the midfield teams are following now which is take engine, KERS and gearbox deals from the larger teams, means that they can produce simple, straightforward cars and concentrate on optimising their aero, the material cost of which is very low. Any slip up by the big teams as a result of chasing small gains via big risk is punished.

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