Manor F1 Sporting Director Graeme Lowdon with myself and co-author Ken Pasternak

Manor F1 Sporting Director Graeme Lowdon with myself and co-author Ken Pasternak

I’ve just returned from the Belgian Grand Prix at Spa. Although many of my students think that I’m off to a Grand Prix every other weekend, sadly this isn’t the case. In fact, I only tend to visit a Grand Prix when we’re working on a further edition of our book – Performance at the Limit: Business Lessons from Formula 1 Motor Racing. In these situations Mr Ecclestone has kindly supported our endeavours by permitting us access to the F1 Paddock, the essential place to be if you want to meet up with the movers and shakers in the various F1 teams.

The first time was at Imola in 2004 – ten years after that fateful weekend when Roland Ratzenberger and Ayrton Senna lost their lives, then we were at Barcelona in 2008 working on the second edition. Now it’s time for the third edition and, as luck would have it, this time it was the Belgian Grand Prix at Spa that fitted into our publishing schedule – it is a circuit I have always wanted to visit, one that oozes from the history of F1, where else would you find a version of the circuit which was modified in 1979 being referred to as the ‘new’ circuit?

It’s always enjoyable to attend a Grand Prix and to breathe in the real atmosphere of F1, but on the other hand this would hopefully be a fairly straightforward visit – interviewing some familiar and some new faces to update the F1 story and how it provides real insights for organisations and their managers to learn from. I’d managed to make contact with a few people prior to Spa to see if it would be OK for us to talk to them. One of these was Manor’s Graeme Lowdon, I’d never met him before, but I’d always thought he seemed to be a straight-forward and approachable kind of individual, and this was borne out when he responded positively to my Email within 50 mins – no passing me on to the media team, or his PA, just ‘yes, come and see me when you get to the race’ they don’t hang around in F1.

This was great news, our book focused on how other businesses and organisations can learn from F1, and as Manor F1 had just effectively risen from the ashes of administration to race again – I felt that there must be some real issues here that would interest a wider readership. So we met with Graeme at the Manor hospitality unit and I started with the question as to how he and the organisation had dealt with the challenges it had been facing over the last twelve months and how it had managed to make it back to the F1 grid in 2015, my thought was that this would get us into a discussion about the problems of going into administration. But Graeme started talking about the 2014 Japanese Grand Prix and the dreadful accident that befell Jules Bianchi and the challenge of then going to first Russian Grand Prix at Sochi while Jules was still in a critical condition in hospital. How could I have been so crass? Why did I not anticipate that the biggest challenge the team faced was nothing to do with administration, but with the catastrophic injuries suffered by one of their drivers at the Japanese Grand Prix. Like every F1 fan I had been devastated to hear that Jules had lost his fight for life in July 2015, but somehow I had managed to separate this from the organisation and most importantly the people in that organisation. What was I thinking? Or rather why was I not thinking?

How many of us can envisage a situation where one of our colleagues dies in the course of doing his or her job? Sadly, it does happen – today we woke to the sad news that Justin Wilson had succumbed to his injuries at an Indycar race – how do we then pick ourselves up from that devastation, what can those leading the organisation do to help and support others when they themselves are grieving too? And then if you realised that your business was now in a desperate financial situation that could not be immediately resolved, wouldn’t it be easier to walk away? To decide that this was the time to do something else? Not so Graeme Lowdon and John Booth of Manor F1. They pulled Manor from the ashes or perhaps more accurately from EBay, where much of the teams equipment was due to be sold, and they put themselves back on the grid where, currently they are fighting with McLaren for position, a team with around four times the budget and people that they have.

We had a great time at Spa, many of the teams could not have been more helpful and co-operative – particularly Mercedes, McLaren, Williams and Sauber. But my abiding memory will always be Manor F1, what they’ve been through, but also the quiet commitment and resolve they have demonstrated, never giving up, when most of us would have been pleased to be able to do so. One term that is used now and again in F1 is ‘racer’ it means someone who has a passion and a commitment to go racing no matter what, it’s not about the money, it’s not about status or fame, but the joy of racing and the desire to win the next race. Teams like McLaren and Williams epitomise this approach, as do their leadership, and for me so do Manor F1. They have demonstrated a different order of commitment, one which shows who the real racers are.

Red Bull Energy Station: Moving the Paddock towards the Paddock Club

Autosport’s Dieter Rencken is one of a number of business savy journalists working in the world of F1. He has posted an interesting story on the Autosport website which looks at the implications of Sauber’s recently launched ‘Club One’. One of the biggest success stories of the business side of F1 is the Paddock Club, normally located in a prime rooftop location at the Grand Prix, the Paddock Club is the venue where several thousand VIPs gather over the race weekend, these include the Presidents and Vice-Presidents of global companies who are wined and dined and talk business, and of course catch the odd moment of the race. A three day ticket to the Paddock Club for the recent Canadian Grand would cost over $5000. The Paddock Club is run by Allsport Management SA whose founder Paddy McNally started off as an Autosport journalist before moving into driver management, sponsorship consulting and then working for Bernie Ecclestone improving the trackside signage at races. He has become a millionaire many times over from the growth in corporate hospitality in F1.

But the world is now changing, in Rencken’s article he quotes a sponsorship agent that the Paddock Club is 60% down on the previous years levels. It also seems that many teams are currently struggling to generate longer term sponsorship contracts of three or five years. They need such deals to underpin their finances and ensure they can continue to recruit and invest. It is also interesting that the Paddock itself has changed. I noticed the change between doing the interviews for our book in 2004 and 2008. For the first edition of our book we went to Imola in 2004, here the team motorhomes were primarily for team personnel to get a bite to eat and have a break, we enjoyed great hospitality at the Minardi motorhome, but it was a relatively basic experience. In 2008 we were in the paddock again, this time to do interviews for the second edition in Barcelona, there was a major shift in the team facilities approach which had been prompted by the arrival of the Red Bull Energy Station. The Red Bull facility in the paddock is fantastic, particularly for those, like us, who were not team members or sponsors, it is open to anyone in the paddock to go and sit, watch the TV coverage enjoy high quality snacks and canapés and the odd glass or two of whatever, in there you find journalists, racing dads (David Coulthard’s father was in there back in 2008), and a whole range of people enjoying the ambience and facilities. The interesting point is that this marked a shift where the teams were now starting to open up their facilities for sponsors and others, moving the Paddock toward the Paddock Club without the price tag.

So the obvious development of these trends of less money from sponsors for the teams and less desire to spend the kind of money that the Paddock Club demands has led Peter Sauber to launch Sauber Club One. Rencken describes Club One as ‘timeshare for sponsors’. It means you can become part of the F1 club without committing to huge sums over many years, a kind of ‘pay as you go’ sponsorship which Minardi used to operate so effectively (and necessarily) with different sponsors at different races. The point is that with Club One sponsors can access the facilities at the Sauber motorhome to build relationships and make deals with other members, but without their name necessarily plastered all over the car, which can often create issues for companies, particularly when downsizing. So perhaps we are starting to see the start of different clubs being managed by the teams, whether or not this means the end of the Paddock Club remains to be seen, but it certainly heralds some innovative new business models so that teams can survive in the long term.