You’re All Racing For 3rd: Mercedes Dominance of Formula One

Christy Sutherland   |   LinkedIn

I’m sweating in the baking Italian sun on the front straight of the Monza Raceway listening to the drivers rev their engines in anticipation of the start.

The light turns green and the race is underway as each driver battles to be first into turn one. I sat in a sea of loyal Ferrari fans or “tifosi” screaming encouragement in Italian. Lap after lap, I watch as the field goes by and tune into that hum of the engines. It’s not what it used to be but there’s no sound quite like it. After a slow start, Lewis Hamilton fought his way back to finish right behind teammate, Nico Rosberg, giving Mercedes its fifth one-two finish in 2016. In what was mostly an uneventful race for Formula One standards, it was evident that all of the other teams were competing for that final podium spot and a few more points towards the Championship. Working at CrossLead I’m trained to assess teamwork and leadership. Watching Mercedes blow the competition out of the water, I was intrigued to investigate the root cause for their success.

With the start of the Abu Dhabi Grand Prix only hours away, it seems another season has come and gone. But what has made the last few Formula One seasons so different? Everyone is talking about which driver will come away with the Championship; Nico Rosberg or Lewis Hamilton, both whom drive for the Mercedes AMG Petronas team. Either driver would give Mercedes its third straight Championship. The odds lean in favor of Rosberg with 367 points, 12 points of ahead of Hamilton. But it’s necessary to look at the bigger picture. Both Mercedes drivers out rank the next best driver, Daniel Ricciardo with Red Bull Racing by over 100 points. Rosberg and Hamilton may be battling for first, but everyone else is racing for third.

As a team, Mercedes vastly outperforms the rest of the teams in the field. Much of the current literature attributes Mercedes’ success to budget and their change to a more aerodynamic turbo in 2014. It would be easy to argue that they win more because they spend more, when in fact that’s not the case. In 2015, the teams with the largest budgets ranked accordingly:

  1.  Red Bull Racing: €468.7m
  2.  Mercedes AMG Petronas: €467.4m
  3.  McLaren Honda: €465m
  4.  Ferrari: €418m[1]

It appears Mercedes is getting the most bang for their buck. This season, the team so far has won 18 races (of 20 races in the circuit), 8 of which they took the first two positions on the podium. In 2015, Mercedes came away with 16 wins, 12 of which were one-two finishes. And in 2014, they claimed another 16 wins with 11 being one-two finishes. In terms of Championships, Hamilton won the Championship in 2014 and 2015 with Rosberg coming in second with overall leader points during those years. In the past 3 seasons, Mercedes has collected 88 total podium finishes, dominating every other F1 team.[2]

Typically, in any race car series, the larger team is divided up into smaller teams that belong to each car. Whether the team has 2 cars or 4 cars, each car has its own driver, chief mechanic, pit crew and so on. Incentives and racing culture motivate teams to withhold information that could aid their teammates, which leads them to view their own teammates as competition. With so much inner team rivalry, those smaller teams within the team are reluctant to share any vital information. In racing, even something as small as a centimeter adjustment on the front wing can make that car a tenth of a second faster, which in Formula One, is the difference between winning and losing.

Historically, Formula 1 teams have put all their eggs into one basket with their top driver. Take Ferrari’s strategy during the 1990s aka the Schumacher Era. Despite having two cars in the field, Michael Schumacher was always the one to win while his teammates were told to sit back and ensure that Schumacher received the top spot and points. Now, clearly this was successful as this strategy gave Schumacher and Ferrari 6 separate Championship seasons.

 

However, times have changed.

 

Today, the world is much more complex and fast-paced and teams must change the way they operate in this new environment. For racing, cars are more advanced and aerodynamic which makes the difference between each lap time only fractions of a second. Mercedes has accepted this new way of running their team where everyone shares information and works together no matter which car they work on. Toto Wolff, Head of Mercedes-Benz Motorsport, is embracing this new-age management system. Instead of keeping both of his teams siloed, he encourages information sharing and collaboration between both teams.

Wolff has worked to cultivate an environment of teamwork. On an F1 team, the team must be a well-oiled machine. Every individual in each position is an expert in their field. They are high performing individuals who are responsible for anything from keeping the drivers in shape to managing the shock systems on the car. Pit crews practice pit stops until they’re flawless and under 2.35 seconds. Everyone must know the race strategies so that the guy replacing the right front tire knows whether he’s putting on soft or super soft tires. If the entire team is not on the same page it could not only result in the difference between winning and losing but could also be the difference in life or death for the driver. However, the difference between Mercedes and the rest of the competition is that they share information and establish trust throughout the whole team and not just the small teams that work with each car. Wolff even went so far as to swap the head engineers between Hamilton and Rosberg’s crews to display that neither team was being favored over the other.

Mercedes has led the F1 series in the past 3 seasons because they embody trust and information sharing, they break down siloes, and they let their drivers race. These factors cause the Mercedes team to dwarf the rest of the competition. Most people attribute budget and the W07 Hybrid Chassis for the reasons behind their success, when in fact it goes deep within the decision to operate the entire team as one high performing team rather than two siloed teams within the same organization.

 

At CrossLead, we see 4 major characteristics of small, high performing teams; trust, shared consciousness, empowered execution, and information sharing.

 

It turns out that as teams become larger, they lose these features. We help organizations scale the agility of a small team across the enterprise through leadership training, strategy-enabled software, and consulting. With our clients, we have found that re-engaging a sense of shared consciousness and trust dramatically increases performance and productivity. Much like how Mercedes operates, we help our clients succeed in today’s complex environment. The only major difference is that they’re success isn’t racing around at 250 mph.

 

[1] Business Book GP
[2] Formula 1 Results, <www.formula1.com>.

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