STRAIGHT TALK
TIME TO JOIN THE CULTURE CLUB
New columnist Mark Gallagher on Mercedes’ special culture
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 to beat Mercedes.
The ‘culture’ phrase is attributed to the late Peter Drucker, a leading management consultant. 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. Admitting you have a problem is usually the first step towards recovery.
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
Toto Wolff’s equity in the Mercedes race team sets him aside from all other active team principals in Formula 1 learned a lot from their 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 (Frank Williams is not considered ‘active’ because he no longer attends races). This consolidates Wolff’s authority, and makes for a very different situation to that at Ferrari, where Arrivabene was often overshadowed by the late Sergio Marchionne.
Wolff also has a perspective beyond F1, enabling both him and Lauda to draw upon experiences of creating successful companies. Lauda has built and sold three airlines, Wolff’s Nextmarch investment company backs a string of successful businesses, not to mention the HWA motorsport empire. This background, glued together by a love and knowledge of the sport, has enabled the pair 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 pitwall debacle in the Austrian Grand Prix, it illustrated that approach. In the most public way, Vowles was being open, honest and accountable. He also had confidence 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 ‘town hall’ meetings where senior staff debrief everyone after the races.
The positive culture is self-evident – from Hamilton’s constant ‘thank yous’ to the factory, through to non-technical staff, such as the heads of communications, marketing and human resources teams collecting the constructors’ trophy on the podium. In this one-team approach, everyone is recognised as a contributor to success.
Ultimately it is openness that works for Mercedes. It’s a powerful culture, powerful enough to help drive five consecutive titles, even when last season the competition sometimes produced a faster car.