The news that Stefano Domenicali has stepped down as Team Principal of Ferrari is the latest in a series of leadership changes in Formula One that illustrates the problem the sport’s competitors face in an era when employees are expected to do a job originally held by the men who founded and owned the teams.  Four of the five top teams in 2013 have seen a change of leadership with Mercedes’ Ross Brawn, Lotus’s Eric Boullier and McLaren’s Martin Whitmarsh being followed out of their respective factory doors by the likeable Domenicali.

These changes raise questions about the way in which Formula One teams should be lead and organised. Everyone in business will acknowledge that for leadership to be effective it also requires authority, credibility and stability.  The leader-employee is immediately at a disadvantage compared to the leader-owner because, quite simply, he or she is at the mercy of sometimes fickle boards of directors and shareholders anxious for results.  And, as we know only too well, there can only be one winner in F1 each season, which means that the other ten franchises can be regarded as ‘losers’.  It becomes all too easy to develop a blame culture, with the employee-leader inevitably in the firing line.

The major transition in Formula One’s team leadership came in 1998-99.  Looking back 15 years we saw Key Tyrrell’s eponymous team disappear into the clutches of British American Tobacco, prompting one of the sport’s most successful team owners to retire.  Indeed, of the 11 teams which competed in the 1999 season only one, Williams, has the same Team Principal today.

Of the rest Giancarlo Minardi, Jackie Stewart and Eddie Jordan sold up, Alain Prost and Tom Walkinshaw watched their teams collapse, Jean Todt departed Ferrari to run the FIA, Flavio Briatore exited the sport under a cloud of controversy and BAR (nee Tyrrell) would fail to achieve Craig Pollock’s early ambitions. Ron Dennis stepped away to run McLaren Automotive, and Peter Sauber handed the reins to Monisha Kaltenborn. What all, apart from Todt, had in common was that they owned some or all of the teams they ran.

In the ten years I worked with Eddie Jordan the one certainty we had within the business was that so long as Eddie’s name was over the door he was Team Principal.  And whether the decisions were right, or wrong, whether the team produced a competitive car, made a profit, or faltered, the one thing we knew was that the boss wasn’t going to fire himself.  It was a strength for the business, since leader-owner’s regard the success or failure of their teams as something intensely personal, and that adds an edge no leader-employee can ever quite bring to the table.

There is an inherent weakness in a Formula One team whose boss runs the risk of being removed whenever the results don’t come, even over the course of several seasons.  It can take 3-5 years to drive significant change in a Formula One team, such is the time delay in bringing new organisational structures, systems, processes and technology into play.  It is not the work of a moment, and is something Ferrari’s new boss Marco Mattiacci may wrestle with.

Until and unless Ferrari achieves race-winning and championship-challenging performance, which is likely to be in 2015 at the earliest, Mattiacci will be under scrutiny.  How long will his paymasters wait?

As we have sometimes seen in professional football, where managers are changed more often than team kit, there is also the worrying phenomenon of teams abusing the realisation that their boss’s position is inherently weak unless the results come.  To put it bluntly, if a team doesn’t like the leader-employee, they can even come to view a period of under performance as having the upside of providing them with a new boss they may prefer.

Formula One teams have to think very carefully about how they solve the problem of inconsistent leadership.  Constant change is most definitely not the way to build sustained success.

The empowerment of a single, credible and authoritative leader is vitally important, and whilst Mercedes Benz may promote the idea that a single leader is no longer possible in Formula One because it is ‘too complex’, the history of the sport and business sense tells us otherwise.  Formula One team’s are ‘Small Medium Enterprise’ engineering companies, employing perhaps 600 full time staff, and the ones that succeed tend to have centralised leadership under one Team Principal supported over a long period of time by key lieutenants.

It is ironic, therefore, that in trying to end the dominance of Red Bull Racing – a team which has enjoyed the same leadership team for almost a decade – their competitors have decided to go through a series of changes at the very top of their businesses. This even includes Mercedes, whose current performance owes much to the leadership of Ross Brawn and Bob Bell, both of whom have opted to quit, presumably as the result of last year’s shareholder changes within the team.

It will be interesting to see whether this era of hiring, firing and restructuring at senior leadership level produces the on track results these teams desire.  Or whether it will simply lead to a generation of team bosses who spend much of their time wary of the opinions of shareholders questioning their every move.

As Winston Churchill said, (people) ‘find it very hard to look up to the leaders who are keeping their ears to the ground.’

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