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There seem to be a range of articles around at the moment analysing the current problems at Ferrari. There are suggestions that Ross Brawn is returning, that Eric Boullier should be recruited, or that Ferrari should relocate to the UK, as they once did in the 1980s.

To add my own pennyworth into the discussion, I see the problem as one which impacts on many organisations around the globe. The problem is the nature of the relationship between a specialist business unit and the corporate centre. Corporate centres, and the senior managers within them, like to feel they are the ones in control, they are the ones that call the shots, and, generally, because they own the overall business, they are correct. However the managers in the business unit are the ones who really understand the industry, the market and how to get things done in this particular situation. So there is inevitably a tension between these two worlds. The term often used to describe the relationship between the business unit and the corporate centre is corporate parenting.

There are many different approaches to corporate parenting. At two extremes we have the laissez faire approach where – to extend the parent/child analogy – we don’t care what our children do, as long as they are getting the right results. We don’t tell them when to work on their homework, or what to write in their reports, we give them a set of boundaries and we let them get on with it, we judge them by their results rather than their activities. In a corporate sense this could be like the relationship between Tata and Jaguar Land Rover. Tata don’t tell JLR what cars to build or where to sell them, they set some overall targets and tell them to get on with it. At the other parental extreme we micro-manage and attempt to control everything our children do. We tell them when to do their homework, we continually check their work (whether they ask or not) and suggest how they could improve things in a great deal of detail, and perhaps we even end up doing it for them. This is over-protective parenting, where we focus on control and micro-managing activities in the assumption that this will produce the best results. This is analogous to the relationship between JLR and their previous owners the Ford Motor Company. In this relationship they were told what models to lauch in what markets, how to price, market them etc. In other words the managers in the business unit were being micro-managed by the centre, unable to do the things that they felt would work best in their specific markets.

Ferrari are the most successful team in F1. Ever. Their most successful period owes much to the driving skills of Michael Schumacher, the technical orchestration of Ross Brawn, the design brilliance of Rory Byrne and engine director Paolo Martinelli. But it owes equally as much, if not more, to the management style of Jean Todt. Todt protected the F1 Team from the parent Fiat. This also would not have been possible without the support from, then President, Luca di Montezemolo. Montezemolo had been responsible for appointing Todt. It was always tempting for Fiat/Ferrari to meddle with the F1 team, particularly in the mid-nineties when the results were not yet there, but this would ultimately have destroyed their ability to compete and dominate F1. Just look at what happened when the Ford Motor Company took over Stewart Grand Prix and turned it into a corporate political football called Jaguar Racing. The team lost its direction and leadership and ultimately failed. When they then became Red Bull Racing the story was somewhat different.

Parents who micro-manage their children may be well-intentioned, but ultimately misguided. If we want our children to become capable, well-developed individuals, we have to give them space to grow, make mistakes, learn and build their own capabilities. Organisations are no different. The main problem I see at Ferrari is the managerial style and approach of Sergio Marchionne. As Chief Executive of Fiat Chrysler he has ended up micro-managing the F1 team – Scuderia Ferrari. He has made their success in F1 a very personal crusade and he has also been quick to get rid of those that he saw as not supporting his approach. Hiring and firing can be very important to build a great team, but, if done badly and for the wrong reasons, it can destroy a great team and create a culture of blame and fear from which success will never grow.

Great leaders are great enablers. Their secret is that they allow others to flourish and develop and bring their abilities to the organisation. Just look at how Mateschitz built up Red Bull Racing. He doesn’t micro-manage. He has good people in place, they know about racing, and he lets them get on with the job. Marchionne should take a step back and give Scuderia Ferrari and its leaders the space they need to build future success.

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Is Force India's talent exodus a sign of on-track success or managerial failings?

The news that Force India’s Technical Director – Mark Smith is leaving to go to Lotus, suggests that all is not well at the Silverstone based firm. This comes very quickly after Mark’s predecessor James Key had left to go to Sauber, there are also a number of other Force India staff leaving to join their previous Technical Director – Mike Gascoyne at Lotus. If you add to this the fact that F1’s most experienced Commerical Director, Ian Philips, also left Force India after a rather public disagreement with Vijay Mallay over who talked to the press, it seems like Force India is experiencing a bit of talent exodus.

So why could this be? Well typically in F1 a good time to move is when your team is doing well and you can reap the benefit from being associated with a successful team, although Force India are certainly not a front runner they have, over the last couple of years, produced a few surprises with their car and are currently well ahead of Williams in the midfield battle. However such a mass exodus of technical people is unusual and suggests that all may not be well in the management side of things. Talented technical people are motivated by working with other good technical people and being given the freedom to test out theories and ideas. They also look to work with and be managed by those who have a strong technical reputation and thereby benefit in terms of professional kudos. The benefit to Red Bull in hiring Adrian Newey was not just in getting the skills and capabilities of Newey, but the fact that he was there was a powerful signal that said the team plan to invest in technology, furthermore if you come to Red Bull you will be working with one of the all time greats, suddenly Red Bull Racing’s attractiveness to talented technical people went up exponentially, and we are now seeing the results.

Ron Dennis was a past master of recruiting the top technical brains (e.g. John Barnard, Gordon Murray, Adrian Newey) and often managing to keep hold of them by allowing them to work on other interesting projects such as Murray’s work on the road car – this way the talent is not lost to the competition. One of the great strengths of Flavio Briatore (and as we know there were also weaknesses) was that he let his technical people do their thing. He gave them the space and resources to get on with the job. He allowed Benetton and then Renault to build up its technical capability and also brought through some great talents, Mike Gascoyne and Mark Smith among them. Let’s hope that Force India haven’t lost the plot regarding retaining and developing their technical talent.

360 Degree Feedback in F1

September 1, 2009

A number of recent articles suggest that there is much amiss in the people management side of F1. As someone who spends a great deal of his time arguing that other businesses and organisations can learn a great deal from F1 this only provides further ammunition to those who maintain that this is a wholly atypical context (which of course it is) from which we can learn nothing useful.

Of course I disagree with this perspective and would counter that it is the particular nature of F1 – high pressure, hugely competitive, intense public scrutiny, that makes it so interesting to observe. Imagine one of your senior Directors makes a statement to some external stakeholder that you disagree with, or which you believe may be damaging, and it is broadcast nationally in the UK? How do you react? Imagine making an employee redundant, the employee then publishing his view of your personal failings and transgressions on his website, what do you do?

Ian Phillips, Commercial Director of Force India

Ian Phillips, Commercial Director of Force India

Well, both cases have recently hit the headlines with Force India’s commercial director Ian Phillips (who has been in F1 longer than all the car manufacturers put together) making a statement on BBC Radio 5 Live concerning the imminent possibility of Ferrari requesting the services of their Italian driver – Giancarlo Fisichella, the statement prompted an instant rebuttal from his boss and owner of Force India – Vijay Mallya, who said that Ian was not authorised to make such statements (even though he is responsible for the PR department!). We await further news from Ian’s next performance appraisal. Similarly the, now out of work, Brazilian driver Nelsinho Piquet has launched an attack on his former boss and manager Flavio Briatore who he described as his executioner. Ferrari boss Luca di Montezemolo once said of Flavio that he always missed a good opportunity to keep quiet, well on this occasion he has been completely silent, even issuing a statement thanking Nelsinho and wishing him well. Whether he’ll be quite so restrained following the recent allegations made on a Brazilian radio station (I wonder where they came from?) that Nelsinho was instructed to crash his car thereby enabling Fernando Alonso to win the 2008 Singapore Grand Prix remains to be seen.

So some useful feedback for bosses and employees alike – perhaps not to the standards laid down by the Institute of Personnel Management, but certainly entertaining for us!