Discussion
LaurasOtherHalf said:
Do they even need to boost their budget?
I know money talks but it’s not like they’re s
tty performance is down to a lack of spending.
For all we know whatever new money comes in might just replace some of what the Arabs are pouring in.
Its all down to spending, the old Mclaren when it built a dud would produce huge very expensive upgrades to get back to the front. Mclaren just dont seem to be able to do that last few years. Dont believe me, look at how Red Bull with F1 biggest chassis budget when it built a lemon a few years ago, brought bascially a B spec car by half season to get back to the front of the field.I know money talks but it’s not like they’re s
tty performance is down to a lack of spending.For all we know whatever new money comes in might just replace some of what the Arabs are pouring in.
revrange said:
LaurasOtherHalf said:
Do they even need to boost their budget?
I know money talks but it’s not like they’re stty performance is down to a lack of spending.
For all we know whatever new money comes in might just replace some of what the Arabs are pouring in.
Its all down to spending, the old Mclaren when it built a dud would produce huge very expensive upgrades to get back to the front. Mclaren just dont seem to be able to do that last few years. Dont believe me, look at how Red Bull with F1 biggest chassis budget when it built a lemon a few years ago, brought bascially a B spec car by half season to get back to the front of the field.I know money talks but it’s not like they’re s
tty performance is down to a lack of spending.For all we know whatever new money comes in might just replace some of what the Arabs are pouring in.
In other words, up until last year they weren't that far away from Mercedes and Ferrari on budget and it still went wrong. And let's be honest about one thing, selling your soul to a fag company is not going to bring in another $150M pa not mater what spin they put on their immoral products.
It is very hard to work out actually how big the budget is at McLaren.
Most estimates are based on the Turnover of the company that own the F1 entry. In 2017, McLaren had a Turnover of £197m but in the 9 months to 30 September 2018 this had fallen to just £98m.
However, Turnover only tells you how much money is coming in; not how much is being spent. A team could choose to spend more money than they are receiving. In 2017, McLaren spent £153m on Cost of Sales and £71m on Administrative Expenses giving a total of £224m. We will have to wait and see what the 2018 figures will be but it is likely that these will be distorted by the cost of renting engines from Renault and compensation to Honda for breach of contract.
Most estimates are based on the Turnover of the company that own the F1 entry. In 2017, McLaren had a Turnover of £197m but in the 9 months to 30 September 2018 this had fallen to just £98m.
However, Turnover only tells you how much money is coming in; not how much is being spent. A team could choose to spend more money than they are receiving. In 2017, McLaren spent £153m on Cost of Sales and £71m on Administrative Expenses giving a total of £224m. We will have to wait and see what the 2018 figures will be but it is likely that these will be distorted by the cost of renting engines from Renault and compensation to Honda for breach of contract.
LaurasOtherHalf said:
revrange said:
LaurasOtherHalf said:
Do they even need to boost their budget?
I know money talks but it’s not like they’re stty performance is down to a lack of spending.
For all we know whatever new money comes in might just replace some of what the Arabs are pouring in.
Its all down to spending, the old Mclaren when it built a dud would produce huge very expensive upgrades to get back to the front. Mclaren just dont seem to be able to do that last few years. Dont believe me, look at how Red Bull with F1 biggest chassis budget when it built a lemon a few years ago, brought bascially a B spec car by half season to get back to the front of the field.I know money talks but it’s not like they’re s
tty performance is down to a lack of spending.For all we know whatever new money comes in might just replace some of what the Arabs are pouring in.
In other words, up until last year they weren't that far away from Mercedes and Ferrari on budget and it still went wrong. And let's be honest about one thing, selling your soul to a fag company is not going to bring in another $150M pa not mater what spin they put on their immoral products.
I think [and also taking in ralphrj’s post on turnover etc] the greater challenge for McLaren, F1 team that is, will be the current corporate structure and setup.
I saw one overlay that had the construction of the organisation as the three or so business units top level alongside a COO, business services support type unit. Quite a classical and trad setup of course. A setup easy enough to impose and justify when you’re really a company of diverse retail brands (Diageo, BAT etc) as in the FMCG sector.
But I suspect as McLaren PLC invested more and more energy in this formal corporate setup, then the F1 team which I’d believe would operate on high performance terms, quick turnarounds, innovating, etc, started to become impaired. Because everyone is arguing over those wooden dollars being spent internally between company units on upgrading computer system x or ranking of project y against the projects in others parts of the company for business resources to deliver. Like the Marines being sucked into the wider US Army.
The appropriate spend number for the McLaren F1 team, I think, is moot compared to the wider point that the Bahrainis and Ojjeh would surely have considered at some juncture: that the high performance potential of the team might more likely be unleashed if it was run as an independent, at arms-length, operation that could wheel & deal, procure at pace, work as suited, entity.
$500m. $250m. $20m. I bet even at $2m a San Diego chop shop team could have handled the Honda>McLaren than some of those poor, institutionalized guys at the time!
Think FMC Corp & Levent or Deutsche & their asset management arm, sometimes like with some kids, it’s best for everyone if they live somewhere else: Dump Zak, get someone like Jost Capito in (“...oh yeah, they did try to before, right?”), give the F1 entity it’s head, and let them run themselves.
Or you know, Tigerkoi, maybe just follow Mercedes’ lead?
(I am actually being serious! Quite how the “best” business heads in the world haven’t looked at how a manufacturer turned the F1 team model on its head and became unbeatable and suddenly thought, “by Jove, that’s it!” I’ll never know.)
(I am actually being serious! Quite how the “best” business heads in the world haven’t looked at how a manufacturer turned the F1 team model on its head and became unbeatable and suddenly thought, “by Jove, that’s it!” I’ll never know.)
LaurasOtherHalf said:
Vaud said:
Eurgh. LaurasOtherHalf said:
Or you know, Tigerkoi, maybe just follow Mercedes’ lead?
(I am actually being serious! Quite how the “best” business heads in the world haven’t looked at how a manufacturer turned the F1 team model on its head and became unbeatable and suddenly thought, “by Jove, that’s it!” I’ll never know.)
Oh no, I’m with you, in as much as it’s more or less the same approach!(I am actually being serious! Quite how the “best” business heads in the world haven’t looked at how a manufacturer turned the F1 team model on its head and became unbeatable and suddenly thought, “by Jove, that’s it!” I’ll never know.)
I can’t remember on which thread we discussed it, but I was sure to pay service to the branding cloak/operationally separate model, Mercedes, well Toto and co, have used. You’ve got some main Daimler AG board members also represented on the F1 teams structure to keep them in some sort of check. Wear the logo, do what you want, don’t make us look like t
ts!With McLaren however the challenge is sort of reversed because as we know, the F1 team begat the brand as opposed to say Amazon & AWS, where suddenly the parent has a high performing child it has to manage.
Business school study can be dogmatic, and exploring how to resolve micro puzzles in a corporate structure that might threaten harmony in the rest of the entity around it just isn’t often explored. In one company I spent 18mo in a perpetual argument as to why a potentially high performing unit should’ve been handled at arms length. Personalities and emotions jarred with commonly agreed sound business strategy.
Xerox & PARC is the oft quoted model as how a parent-child situation might work and mixing innovative, envelope pushing work with mundane retail, production line stuff. The problem is that making it successful in driving consistent roaring performance for everyone involved seems a little alchemic when you factor in human beings.
tigerkoi said:
Xerox & PARC is the oft quoted model as how a parent-child situation might work and mixing innovative, envelope pushing work with mundane retail, production line stuff. The problem is that making it successful in driving consistent roaring performance for everyone involved seems a little alchemic when you factor in human beings.
Indeed. I worked at PARC on a project (a very fun time)Dealers of Lightning: Xerox Parc and the Dawn of the Computer Age is worth a read.
The issue with Xerox/PARC was fundamentally cultural. East Coast copier salesmen did not understand what they had created, nor how to monetise it, nor the critical importance of self disruption when you are a leader.
I could write a lot on this topic, having had first hand experience but it probably isn't the right thread.
Vaud said:
Indeed. I worked at PARC on a project (a very fun time)
Dealers of Lightning: Xerox Parc and the Dawn of the Computer Age is worth a read.
The issue with Xerox/PARC was fundamentally cultural. East Coast copier salesmen did not understand what they had created, nor how to monetise it, nor the critical importance of self disruption when you are a leader.
I could write a lot on this topic, having had first hand experience but it probably isn't the right thread.
If you started a thread on that topic I would read it. Just so you know Dealers of Lightning: Xerox Parc and the Dawn of the Computer Age is worth a read.
The issue with Xerox/PARC was fundamentally cultural. East Coast copier salesmen did not understand what they had created, nor how to monetise it, nor the critical importance of self disruption when you are a leader.
I could write a lot on this topic, having had first hand experience but it probably isn't the right thread.
Vaud said:
tigerkoi said:
Xerox & PARC is the oft quoted model as how a parent-child situation might work and mixing innovative, envelope pushing work with mundane retail, production line stuff. The problem is that making it successful in driving consistent roaring performance for everyone involved seems a little alchemic when you factor in human beings.
Indeed. I worked at PARC on a project (a very fun time)Dealers of Lightning: Xerox Parc and the Dawn of the Computer Age is worth a read.
The issue with Xerox/PARC was fundamentally cultural. East Coast copier salesmen did not understand what they had created, nor how to monetise it, nor the critical importance of self disruption when you are a leader.
I could write a lot on this topic, having had first hand experience but it probably isn't the right thread.
I did read “Dealers of Lightning..” a good ten years or so back, and the PARC story is such an interesting one. Good book. In some ways the problem in many companies today is the seeming reverse. With everyone now walking around quoting Clayton Christensen, a lot of legacy companies now have an influx of young professionals who all think everything should be flipped on its head! Innovation isn’t the joyful exception anymore - it seems everyone is at it...
Very interesting, thank you
M3ax said:
If you started a thread on that topic I would read it. Just so you know
Me too, c'mon Vaud-pull your finger out! Yes Tigerkoi, we did indeed discuss it recently on another thread and while desperately not trying to sound like a stuck record I can only say it's because it's so interesting-if only for those of us inspired by others making a success of something different.
And that's my major problem with McLaren these days. I won't lie, I detest the team and everything it stands for these days.
I don't mind admitting a lot of my passion is from the (most derided on PH) tribalism of fandom, I was a huge fan, supporter and enthusiast about MP4 era McLaren and despite his faults I can't support a team who did that to Ron. Fair enough in my eyes.
But the demise of McLaren goes way further than one fanboy cheering on a team losing because he was a fan of their former boss.
MP4 McLaren revolutionised the business of winning, most have refined that formula ever since but Mercedes have turned it on it's head again. The tragedy for McLaren was that Ron essentially (in my opinion) saw it and tried to do the same. He couldn't and the rest (like their winning days) is history.
LaurasOtherHalf said:
M3ax said:
If you started a thread on that topic I would read it. Just so you know
Me too, c'mon Vaud-pull your finger out! Yes Tigerkoi, we did indeed discuss it recently on another thread and while desperately not trying to sound like a stuck record I can only say it's because it's so interesting-if only for those of us inspired by others making a success of something different.
And that's my major problem with McLaren these days. I won't lie, I detest the team and everything it stands for these days.
I don't mind admitting a lot of my passion is from the (most derided on PH) tribalism of fandom, I was a huge fan, supporter and enthusiast about MP4 era McLaren and despite his faults I can't support a team who did that to Ron. Fair enough in my eyes.
But the demise of McLaren goes way further than one fanboy cheering on a team losing because he was a fan of their former boss.
MP4 McLaren revolutionised the business of winning, most have refined that formula ever since but Mercedes have turned it on it's head again. The tragedy for McLaren was that Ron essentially (in my opinion) saw it and tried to do the same. He couldn't and the rest (like their winning days) is history.
LOH, I agree with you: the topic is interesting and for me at least, a microcosm of why F1 is such an engrossing study. I think the politics of world football run it a close second, but it’s really a ‘sport’ of two halves. There’s the actual racing, Sunday afternoon stuff, and then all the competing interests, game theory practising, big corporates meeting oligarchs...all in some bear pit of stunted competition. Putin, Ghosn, bearded energy drink magnates, absconding airline tycoons, oil sheiks...and then guys like Ron Dennis, who come from pretty much nothing and in essence, make the show.
It may not be your interest, but over last week or so, I couldn’t get enough of the Anthony Davis, LA Lakers, potential trade that dominated NBA news. And like a lot of sports business it’s caught the interest because it all boils down to people - who gets shafted, who doesn’t. The people dynamic. The constant strategising and the endless circling of the ring. And the F1 story is just infinitely more engrossing.
Dennis might be a really idiosyncratic guy, but yeah, I think how he was buggered out of his interest at McLaren was awful. Awful in consideration of what he had achieved. I’m positive that if you managed to corner him for a chat over a Siglo V cigar or two (
) he’d probably admit readily to many mistakes. But he probably wasn’t quite so prepared to think he’d be so ruthlessly cut up as he was. Interestingly enough, the same goes for Sorrell and WPP, and one of the few comparables I know of in taking a small outfit, and turning it into something much, much more significant. Then being cut.A few years ago, I know the owner-boss of a significant global advertising firm was invited by Ron to go and see the Woking setup and mooch around. He came back and was so taken in by all the attention to detail, the cleanliness, organisation etc etc, that he turned the U.K. hq into a similar working environment. He was heavily influenced by what he’d seen and the company that Dennis had willed into his own image. The evident culture of precision, exaction, winning and success.
But what of Woking now? I’d imagine if you were there from the early days, all the character must have been ripped out of the company when Dennis left, and all you have remaining is a big shiny building with a random collection of souls inside. And without the “people”, the ones you can understand and get behind, the ones with the history, then all you have is....Just. Another. Company or Just. Another. Team.
It’ll surely take a lot for McLaren to get that winning culture back again. Sure they might luck out every now and then with some Williams 2012 Spain GP style success, but it will take a special person or special group of people to drive that heart back into the operation for another sustained period at the top.
tigerkoi said:
it all boils down to people - who gets shafted, who doesn’t
Way too many interesting points to address in a forum quote/reply as always Tigerkoi, yours and DS' are some of the few posts and (probably to my detriment) posters who I genuinely look out for and digest.But I digress and to get to the point above it's still why I love the sport. Yes it's the speed, the cars, the technology, the glamour, the danger but it's the people who I love. The whole dynamic of this "sport" revolves around the amazing characters it attracts and who make it their life's work to succeed in such an environment.
I love business and entrepreneurial-ship too and it's that same dynamic that gives me the buzz in management-building a business around talented people and working each one towards and against others. I'd love to spend 2 years in an F1 team just as a learning curve to see how they manage it all-I imagine it's an all encompassing rollercoaster ride to be honest.
(although having a hair and beauty business probably runs it a close second if I'm honest!)
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