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.

Advertisements

Apparently an exchange of views has occurred between Bernie Ecclestone and Lewis Hamilton regarding the choice of management Lewis made, following his split with his father Anthony, back in 2010. Bernie having the view that it would have made more sense for Lewis to stick with his father, and Lewis declaring himself very happy with his move to Simon Fuller’s XIX Entertainment.

The subject of driver management in motorsport is an interesting one. There have been various forms of ‘manager’ over the years, the fact that Bernie is commenting on Lewis’s management is germane as he began his involvement in F1 as a driver manager, first advising Stuart Lewis-Evans in the 1950s and then with Jochen Rindt in the 1960s. Here the focus was very much on negotiation and contracts, something that Bernie, as we now know, had a bit of talent for. These tend to be independent managers, focused on motorsport who are directly advising one or several drivers and who certainly tend to be with them at races. They have often moved into management either from being a driver, or more often when they supported the driver at an earlier stage in their career. Examples would be David Robertson who looked after Kimi Raikkonen and Jensen Button, Martin Brundle looking after David Coulthard and Willi Weber with Michael and Ralf Schumacher.

Today it is very much the norm for drivers to have their own managers, effectively managing their financial affairs and negotiating on their behalf, although there are still one or two who like to handle things themselves such as Gerhard Berger and current world champion Sebastian Vettel. At the F1 level there are not often the close family relationships between driver and manager, such as that which existed between Lewis and his father, although Mark Webber took things a stage further and is living with his former manager, Ann Neal, and Jean Todt’s son Nicolas was managing Felipe Massa when Todt was CEO of Ferrari, which must have made negotiations interesting. Flavio Briatore may have had to negotiate with himself when he was Team Principal of Renault and also managing Fernando Alonso. So things have sometimes got a bit complicated.

An alternative approach is followed by those who go down the professional sports management route: using a specialist organisation to provide the support, such as the services provided by CSS Stellar which in addition to a range of sports/entertainment businesses includes individual sportsman/woman management.  This was founded by lawyer Julian Jakobi, formerly Ayrton Senna’s manager. As far as I’m aware the first driver to go down the route of using a professional sports management organisation was Jackie Stewart in 1968. JYS enlisted the help of Mark McCormack’s IMG operation, (he of – ‘What They don’t Teach you at Harvard Business School’ fame), which up to then had focused on professional golf players such as Arnold Palmer, Jack Nicklaus and Gary Player. Famously JYS’s first ‘assistant’ ,provided by IMG, was one Martin Sorrell who went on to do rather well for himself eventually becoming chairman of marketing communications conglomerate WPP. Here the benefit of the management company is more geared towards the wider ‘celebrity’ of the driver and makes a lot of sense – as was the case with JYS – if you have an eye on the longer term earning potential of the individual ‘brand’. It is therefore probably too early to say whether or not Lewis has made the right decision in going to XIX Entertainment. However one thing I did find out on a visit to Tennessee was that XIX Entertainment owns Graceland, Elvis’s former residence, I wonder if they’ve now got an eye on a certain property in Stevenage?

First, I must apologise for not posting for a while. I have a few work and family issues on at present, but hope to be back to normal (whatever that means) by December.

As Fernando Alonso sailed (almost literally) to victory in Korea last weekend I wondered how the managerial minds at McLaren and Red Bull were now turning to that dreaded subject – team orders. Both Martin Whitmarsh and Christian Horner made much of the distinction between their approach of two drivers who are clearly racing each other as well as everyone else, to that of Ferrari where the focus is on getting Fernando to the top step of the Driver’s World Championship. However that was when Fernando himself was less of a threat, and there were a few more races to go, now the situation is different. There are a maximum of fifty points up for grabs and Fernando leads the championship with 231, followed by Webber with 220, Hamilton with 210, Vettel with 206 and Button, who is the last driver who could mathematically beat Alonso with 189.

The view of most commentators is clear, McLaren have to get behind Hamilton and Red Bull have to get behind Webber if they want to win the Driver’s Championship. But will they? If, like Frank Williams, they chose to focus on the constructors’ championship – which after all is the basis on which Bernie’s media spoils are divided up – then Red Bull, with a 27 point lead, already have things pretty much in the bag. The other interesting dynamic at Red Bull is the attention that is paid to Vettel (particularly by Dr Helmut Marko) and his dominant performance in Korea which was undermined by his engine losing the will to rotate in a rather spectacular manner. Do you think they will tell Vettel he is now number two while he still has a mathematical chance of winning the championship? I think not.

At McLaren, under Martin Whitmarsh’s rather refreshing and open regime, I suspect it will be down to a good old team chat, and Jenson may well, as he himself has suggested, accept that the title is not within his grasp and fall in behind Lewis, but I suspect it will be down to Jenson to accept this as the way forward, rather than he be told, that isn’t the best way to manage a world champion. So we may have Ferrari and McLaren operating a world champion driver strategy in Brazil, behind Alonso and Hamilton, but Red Bull? I suspect they will stick to the wheel to wheel approach that they’ve held to so far, until it is clear as to who it is they need to focus on, of course by then it may be too late.

Michael will be unlikely to want to finish his F1 career in a car which stopped development half way through the season

I was interested to note Ross Brawn’s comments, published on Autosport.com, that Mercedes were going to be focusing on their 2011 car after the August shutdown. Now, of course, actually all the teams will be focusing on their 2011 car as this is now the phase during which they get the majority of the design finalised, before they can begin the build process. However I think that Ross’s comments are significant in another way. Michael Schumacher has a one year deal with Mercedes for 2010, and there has been much conjecture, particularly from the British press that his comeback has been a bit of a disaster and that he will probably finally retire at the end of this year. I suspect otherwise. One thing that Michael has demonstrated this year is his tenacity in adversity, there have been times when he could have walked away, but did not. He has not fully got to grips with the handling of this year’s F1 car, and Ross himself admitted that they probably didn’t deliver the best car for either of their drivers. However they now have a lot of data on where Michael has been struggling and this data can be very important in designing the 2011 Mercedes F1 car. I therefore think it very unlikely that Michael would want to end his F1 career on his 2010 performance and indeed finish up the season with a car which had not been significantly developed since August. I think this is a clear sign that Michael Schumacher will now be focusing on his 2011 season along with Mercedes.

RBR Team Principal Christian Horner (left) alongside team owner Dietrich Mateschitz

I think Christian Horner is one of the best Team Principals we have seen for some time in F1, but even he is having his work cut out to try and damp down the increasingly problematic relationship between the two Red Bull Racing Drivers, something which the media are having a field day in trying to flare up further. The one issue that effects a driver more than any other is the belief that their team mate is getting preferential equipment. After he had taken over the Brabham team in 1972 Bernie Ecclestone had to solve a problem where his two drivers, then Graham Hill and Carlos Reutemann, both believed the other was getting a more powerful version of the Cosworth engine, so Mr E. resolved the debate in his own inimitable style – he tossed a coin for each race and got the drivers to call as to who got which engine – problem solved! However, in the F1 of today the incessant rate of development, and lack of testing opportunities means that situations often arise when hard decisions have to be made as to who gets what. Christian Horner’s challenge could not, unfortunately, be solved by tossing a coin.

Red Bull Racing had come to Silverstone with two new specification front wings, one of these failed during practice when it was fitted to Vettel’s car, meaning that only one new wing was available for two competitive drivers and cars for qualifying and then the race, when no further changes are allowed to be made. Christian Horner was therefore left with three options, 1) replace Vettel’s broken wing with a ‘old spec’ wing and keep Webber’s car fitted with the new one. 2) swop the wings giving Vettel the top spec wing and replacing Webber’s with an old spec one or 3) replace Webber’s new spec wing with an old wing so that both drivers had equal equipment. McLaren boss, Martin Whitmarsh, who never misses an opportunity to pour oil on a troubled rival (remember his interview on the BBC after the Red Bull driver collision in Istanbul?) was very clear on the McLaren position as quoted by James Allen on his site, http://www.jamesallenonf1.com: “I think if you are in a very strong position then even more cause to be as fair as you are with the drivers, the cohesiveness of the team is such that you don’t need to set up those kinds of tensions and if you are in a strong position you need to be careful to hold it together.” So he goes for option 3 then – the team harmony choice, although, to be honest, I’m not sure Mark Webber would have seen it that way. I would have thought the Webber would have gone for number one – the ‘keep things as they are’ choice – using the ‘it’s on my car so leave it there’ logic. This would have kept Adrian Newey happy, he would have felt that the McLaren option would have lost the chance for the wing to be tried out in race conditions, and given the lack of opportunities to test such components this was an imperative for continuing to improve the performance of the car. So Christian had to make a decision and he decided for Option 2, which pretty much made Webber incandescent and led him to comment that he would have not re-signed his contract for 2011 if he’d known he would have been treated thus. However I suspect Webber would have been just as unhappy if he’d been forced to run an old wing for the sake of fairness, and this would have meant RBR would have lost a valuable opportunity to run the new wing. So in the end we have an unhappy Webber who dominated the British Grand Prix and underlined the supremecy of the Red Bull, we have a team who now have more data on their new wing and who have now set a clear and explicit basis for priority – whoever is leading in the drivers’ championship, and of course this is now Mark Webber, so maybe things will calm down sooner than the press would like. On balance I think Christian made a good decision and perhaps most importantly, he made it openly and defended in openly, and as long as he now sticks to this, team spirit in RBR may just be saved.

 The final point however is that it is two McLaren, not Red Bull, drivers who are now leading the championship, and if we look back to 2007 we may recall how Kimi Raikkonen took the world championship from the feuding Hamilton and Alonso. We are now just over half way, with nine races remaining, if RBR aren’t able to resolve these tensions in a productive way then this could be another year in which internal competition got the better of collaboration and destroyed team performance.

Felipe Massa's seat at Ferrari is secure for 2011

The recent announcements that both Mark Webber and Felipe Massa will be remaining at Red Bull and Ferrari respectively for 2011, suggests that the driver’s market for 2011 is already fairly well sorted. The speculation that the two stars of 2010 – Mark Webber and Robert Kubica may be going to take Massa’s seat at Ferrari now appears to be over, and with most of the leading drivers in place for 2011 it appears that the line ups for the front-running teams will remain the same as 2010, with perhaps the biggest question being whether Michael Schumacher will continue into 2011. He only signed a one year contract with Mercedes back in December 2009, and a lot will probably depend on how well the Mercedes team do in terms of developing the car to remain in touch with Red Bull and McLaren.

The other question is of course how many teams will be competing in 2011? The FIA plan is for 13 teams, they have a process currently underway to identify both team number 13 and a reserve. Bernie Ecclestone has already made the comment that he expects one of the current new teams to fail. As Lotus seem to be actively recruiting for the long term, the two candidates have to be Virgin Racing or HRT. HRT have the greatest uncertainty surrounding their operation as they have parted company from their car designer and builder – Dallara, and are planning to set up their own design/construction operation which is not easy if you do it from scratch and will need to be in place pretty quickly if they are to stand a chance of getting a competitive car put together for 2011. With all the doubt surrounding their funding earlier in the year, it is unclear as to how committed their investors really are, so they may well be the team most likely to fall away in 2010.

However I do have a further concern for the current teams and it is the current lack of existing sponsorship and new sponsors coming into F1. In particular the Sauber and Williams teams show very little evidence of sponsors on their cars – Sauber are trying to rebuild their brand after taking over the BMW operation and Williams will be losing their long-time partner and now nationalised bank – RBS at the end of the year. Williams are currently running their own Williams Hybrid Power logo in one of the prime locations on the chassis. If the FIA increase the number of the teams next year that will mean even more teams looking for fewer sponsors, so this is not good news for the commercial departments who are trying to sell space on their cars at premium rates. Let’s hope that these teams already have deals lined up which are still to be announced for 2011.

A great deal is at stake in the battle between Team Lotus and Virgin Racing

Winners

Red Bull Racing Press Team. Forget the racing, for me the most impressive performance of the Turkish Grand Prix came from the Red Bull Press Team. With Mark Webber and Sebastien Vettel conspiring to destroy what should have been another dominant display from the Milton Keynes team (I know it just doesn’t sound the same as Maranello – no matter how many times you say it), the press spotted that golden opportunity: a very unhappy driver returning to the team base before he can be given the party line by the media team – manna from heaven for the F1 journalist. The format is simple, get unguarded comments from Driver A, feed these back to Driver B who then reacts even more strongly, go back to Driver A etc… the outcome being that you have more column inches and a very happy sports editor. However they had not reckoned on the martial arts skills of the Red Bull Racing Press Team. You may think that the main skill required for an F1 media person is to turn on a digital recorder and hold it close to your driver in order to capture those wonderful words of wisdom. Not so at Red Bull. As Vettel was spotted returning to the RBR base first one hack managed to get to him and as he hopefully raised his microphone this was swiftly grabbed and he was spun, in a graceful pirouette, by RBR’s Katie Tweedle. Vettel was now nearly home, but not quite. As he made the final steps towards his sanctuary the large form of the Daily Mail’s Jonathan McEvoy barged his way through, in a move that most second row forwards would have been proud. However, he had not reckoned on the second line of defence, and was swiftly spun around in a very effective line dancing move by one of Katie’s colleagues who then placed himself between Mr McEvoy and his scoop, at this point Mr McEvoy appeared to lose his self-control and started shouting at the RBR employee, Vettel, who by now was up the steps and nearly inside, lent over and made a calming move with his hand towards the irate journalist – this was in marked contrast to his earlier gestures to his team mate. Clearly both Mr McEvoy and Sebastien Vettel had just suffered an extreme disappointment, but it was interesting to see that the F1 driver was the one who appeared to be in a more conciliatory mood.

McLaren. One of the most impressive things about McLaren (and there are many) is their ability to develop the performance of their car during the season. They may not always produce the fastest car at the start of the year (and if they do that normally means game over for everyone else). But the breadth and depth of their expertise means that they can generally improve at a far faster rate than the competition – the only other team who gets close to this is Ferrari. In Istanbul it appeared that they had caught up with the, so far untouchable, Red Bull. It will be interesting to see if McLaren are able to maintain this impressive capability in the face of reducing budgets and resources.

Virgin Racing. I know I’m biased on this one, but VR managed to finish the race with both cars, albeit several laps down. They don’t seem to have an answer to the pace of the Lotus yet, but let’s wait and see, of course the stakes of this battle are very high with either Tony Fernandes (Lotus/Air Asia) or Richard Branson (Virgin Racing/ Virgin Atlantic) taking on the role of stewardess in their competitor’s airline if their team finishes behind the other at the end of the season. However I’m not sure how, should he win, Mr Fernandes will explain this to the Air Asia staff – “OK guys we won the bet and now you’ve got Richard Branson as part of your in-flight service team” – so what would have happened if they’d lost – would RB be flying the plane, balloon style?

Losers

Red Bull Racing. Although for many teams a place on the podium could hardly be seen to be a losing scenario, for RBR this was undoubtedly the case, as they should have been first and second. But the bigger negative is not the loss of points, but the potential for loss of team spirit. This looks like being Red Bull Racing’s year, but as with all great achievements it may come at a price. For me Christian Horner is one of the most impressive team principals we have seen for many years. He may not have the flamboyance of a Briatore or the technical abilities of a Brawn, but he gets on with the serious business of running the team quietly and professionally. He will now need all of his managerial skills to ensure that the potentially toxic fall-out from the Webber/Vettel collision does not undermine the team spirit and cohesion at Red Bull Racing. The media will clearly fuel this story as it creates headlines, particularly as there is also the added dimension of ‘what does Mr Mateschitz think?’ reminiscent of the days when Enzo Ferrari let his views be known, not directly to team members, but through the press. It was also interesting to see a number of McLaren personnel, including Martin Whitmarsh, doing their bit to fan the flames of discontent in their closest rival. However, McLaren’s Chief Engineer Tim Goss went a bit further and did rather seem to be tempting fate when he stated that “In this race Red Bull Racing did not deliver, and they’ve not delivered because their two drivers are racing. Our two drivers were racing, but I think that just shows how well our two drivers can manage themselves on the circuit.” I think it’s fair to say that McLaren have been the team where, over the years, their drivers have been the least able to manage themselves on the circuit – Prost/Senna; Hamilton/Alonso. Let’s hope those words don’t come back to haunt him.

Ferrari’s 800th Grand Prix. I don’t think that Enzo would have been too happy to hear that his beloved Scuderia only finished 8th and 9th in their 800th race. The number 800 being emblazoned on the air box of both cars – subliminally didn’t you think it looked like a number of cigarettes in a packet? Either way the Maranello based team appears to have their work cut out to pull back into contention. But let’s not forget this was only race 7 out of 19, there’s still a long way to go.