Culture eats Strategy for Breakfast; a business mantra that came to mind when I heard Maurizio Arrivabene’s tetchy reply of “that is your opinion…” when, in Abu Dhabi, the BBC’s Andrew Benson put it to him that Ferrari had made too many mistakes in 2018.
The ‘culture’ phrase is attributed to the late Peter Drucker, one of America’s leading management consultants. It doesn’t mean that strategy is unimportant, simply that you aren’t going to get anywhere if your team doesn’t have the right culture; including admitting mistakes. As counsellors know, admitting you have a problem is usually the first step towards recovery.
Drucker was born in Vienna in 1909 and I am sure he would have enjoyed chatting with Toto Wolff, not only about their city of birth, but equally the challenge of building a winning team.
Mercedes’ huge achievement owes much, of course, to having the strong technical foundation that Honda and Ross Brawn built in Brackley. Yet major automotive companies have a poor track record in F1; big factories and large budgets seldom guarantee success. Think Jaguar or Toyota.
A winning culture depends on high quality leadership, usually delivered by a boss with real authority. One of the first signs Mercedes had learned a lot from its time in the sport was in separating the race team from the parent company. The other was the masterstroke in agreeing to sell shares to Toto Wolff and Niki Lauda.
As a 30% shareholder Wolff is in the unique position of being the only active Team Principal with significant equity in the team he leads. This consolidates his authority, and makes for a very different situation to that at Ferrari where Arrivabene was often overshadowed by the late Sergio Marchionne.
The Mercedes boss also has a perspective beyond Formula One, enabling both him and Lauda to draw upon their experience of creating successful companies; Lauda has built and sold three airlines, Wolff’s Nextmarch investment company backing a string of successful businesses in telecommunications and software, not to mention the HWA motorsport empire.
This background, glued together by a love and knowledge of the sport, has enabled Wolff and Lauda to form a strong partnership and drive a culture that has more in common with an entrepreneur-led business than the squashed sub-division of an automotive giant.
In business management the process by which you admit, analyse and rectify your mistakes has a name; it’s called Continuous Improvement. When Mercedes’ chief strategist James Vowles came on the radio to Lewis Hamilton and took responsibility for a pit-wall debacle in the Austrian Grand Prix, it illustrated that approach. In the most public way imaginable Vowles was being open, honest and accountable. He also had confidence that the team would not punish him.
‘Blame the problem, not the person’ is one of the in-house sayings in Brackley, and Wolff has referred to the team’s way of dealing with issues as ‘tough love’. You end up having difficult conversations at times, but nothing is left to fester.
Similarly there is an emphasis on communication, from the trackside emails that flow to everyone back in Brackley and Brixworth, to the Monday afternoon 2pm ‘town hall’ meetings where senior staff debrief everyone on the race weekend and take questions.
The positive culture is self-evident; from Lewis Hamilton’s constant ‘thank you’s’ to the factory through to non technical staff such as the respective heads of communications, marketing and human resources collecting the Manufacturer’s Trophy on the podium. In this one-team approach everyone is recognised as a contributor to the team’s success.
Ultimately it is openness that works for Mercedes; internally within the team and externally with the media and fans. It’s a powerful culture; powerful enough to help drive five consecutive titles, even when last season the competition sometimes produced a faster car. And that’s a fact, not an opinion.
This Article was first Published in Mark Gallagher’s monthly column for F1 Racing Magazine, January 2019