Last month we sat down with Mark Gallagher to talk motor racing, F1 politics and his forthcoming book, ‘The Business of Winning’.

Over the course of the day we identified seven lessons from Formula One which can be applied to the world of business, all of them present in the winners of today and yesteryear.

To make it easier to digest we’ll separate the interview into two parts; this one about transferring the winning ways of F1 into business and a second piece about F1, past, present and future.

It’s a subject very close to my heart, having spent nearly 30 years advising CEOs and their executive teams on ways to deliver sustainable performance.

During this time I learned that winning has as much to do with mindset as talent and Gallagher has plenty of experience with both, having held senior roles within Jordan and Red Bull Racing and more recently running Cosworth’s F1 Business unit.

In addition to F1, Gallagher has tasted success in several other forms of motorsport including A1 GP, which he won in 2009 with Team Ireland, and Status Grand Prix – the team he co-founded in 2005 which has won seven GP3 races and competes in the LMP2 category of the Le Mans sports car series.

He now spends an increasing amount of his time as a motivational speaker, touring the world and talking to business leaders about the lessons learned from creating winning teams in the high-pressure world of motorsport.

Here are seven lessons we discussed that Formula One can teach us about winning.

1. Winners surround themselves with other winners

The idiom ‘cream always rises to the top’ would suggest that sheer driving talent alone was responsible for podium success, but how many world champions have won in a bad car? And how many achieved those victories without a top-class team of designers, engineers and team personnel all pushing in the same direction?

Winners assemble the best resources and work with the best people.

This highlights one of the personality traits of successful race drivers – they’re also good leaders – particularly in a team running two drivers and competing in identical cars, the winner will be the one who best draws the team around him (or her). See Schumacher and Barrichello, Vettel and Webber, Häkkinen and Coulthard, Alonso and Massa.

MG: “Not only do the drivers who win championships drive the best cars, but they usually have the best management, the right sponsorship and a team which works equally as hard. You need to assemble the 20 different things in order for your career to achieve its potential.”

Michael Schumacher is perhaps the best exponent of winning as a collective; From 2000 to 2004 the dream team of Jean Todt, Ross Brawn, Rory Byrne and Schumacher claimed five successive world championship titles for Scuderia Ferrari, a feat yet to be eclipsed even by messrs Vettel, Newey and Horner at Red Bull Racing, although you can clearly see the same ingredients at play.

2. Winners become the best they can be

Damon Hill won the F1 world championship title in 1996 with Williams GP, and while a lot of people acknowledged his talent, he was also driving the best car. While the same was true of Ayrton Senna and Michael Schumacher, Hill’s achievement was seen by many in the paddock as a little less worthy than some of the greats.

Gallagher worked with Hill during the ’98 and ’99 seasons, when he drove for Jordan GP, and observed first-hand the way in which he applied his talent.

MG: “The penny really dropped with me when Damon came to Jordan in ’98, and obviously his win in Spa. He was no longer driving the best car, but the defining point in that weekend was during qualifying because Damon qualified third on the grid behind the two McLarens, and on the lap he qualified third he had Michael (Schumacher) literally in his wheel tracks – there was about 300 metres separating them – and every time Damon went through a sector time we were convinced Michael would beat him, but he didn’t. In fact through the third-sector, which in those days was the bus-stop, Damon pulled out an advantage on Michael’s Ferrari. That’s down to the driver. Although Damon wouldn’t be in the top six of my pure driving-talent list, my view on Damon is he worked very hard at his craft and deserved everything he achieved.”

There’s a parallel here for business. Winners aren’t always the most exceptional, nor the most outspoken, but they understand their strengths and conscientiously apply these to maximise their potential.

3. Winners innovate and make their own rules

Michael Schumacher remains the most successful F1 driver of all time with seven drivers’ titles and a host of records including most championships, race victories, fastest laps, pole positions and most races won in a single season.

Gallagher worked with him when he made his 1991 Formula One debut with Jordan, observing the German’s single-minded focus and laser-like determination. But while most admired his success, few rivals possessed the courage to go their own way, despite how this might impact their reputation.

Gallagher recites a comment made by Schumacher’s ex-Ferrari team mate, Eddie Irvine, after the champion retired for the first time in 2006.

MG: “In response to the question, ‘What do you think of Michael retiring?’ he (Eddie) made a typical Irvine throwaway comment – he said hopefully he’ll have a more interesting life because up until now the only things he cares about has been racing, his wife (Corinna), the family and his dogs. And I thought.. well actually Eddie what you don’t realise is you’ve just summed up the reason why Michael has won seven world championships and you’ve won none.”

MG: “In order to win, you’ve got to do something different. If you keep doing the same thing, especially if it’s the same as others, then why should the result be any different?”

Winners who make their own rules are natural innovators, whether in the intensity of their personal fitness regime (Schumacher and Senna), their detailed feedback to engineers (Nico Rosberg) or the way in which they approach a grand prix weekend (Vettel).

If you’d like to decipher someone’s winning ways, start with what they do differently.

4. Winners continually adapt

Change is the same in F1 as it is in business, the difference is, it’s easier to measure and the consequences of failure are visible for all to see – every other weekend.

Mark Gallagher (top right) representing Cosworth at the 2011 German Grand Prix with James Allison (Lotus), Monisha Kaltenborn (Sauber), Stefano Domenicali (Ferrari) and Norbert Haug (Mercedes).

Technical innovation is at the heart of F1 and 2014 has seen the biggest set of rule changes in recent history. The winning teams and drivers will be those who adapt more quickly than the rest, although some never quite manage to assemble all the right ingredients to do so.

Gallagher spoke about one such driver who struggled more than most.

MG: “Jarno (Trulli) was a very fast driver, certainly over a lap he was perhaps faster than anyone, but he wasn’t able to put together races and therefore he wasn’t able to win championships. At Jordan we used to set our watches by the fact that 10 minutes into every race, without fail, he would come on the radio and say the car was un-drivable. And when Jean Alesi drove for us in the last four races of his career, he said to me one evening that he realised why Jarno hadn’t achieved his potential – because Jarno wants the car to feel exactly as it does in qualifying on every single lap. But the reality is at the beginning of a stint the car will feel rubbish, feel better in the middle as the fuel lightens and the tyres settle in, then towards the end feel awful again. So most of the time it will feel awful. That’s the difference between the winner and a talented competitor – the winner has the big-picture perspective and the intellectual capacity to adapt their performance to suit their environment.”

Top drivers learn to adapt their motivation to suit the circumstances, maintaining their ‘fighting spirit’ for when the opportunity to win arises again. This intelligence marks out the greats from a peer-group of equally talented rivals.

In the Driver’s Press Conference during the recent Spanish Grand Prix, Sebastian Vettel said (in reference to Red Bull Racing’s lacklustre performance during the first four races of the season), “..ultimately we’re here to win, not come second place.”. Ferrari’s Fernando Alonso added, “..he’s got more recent experience (of winning), but when you cannot (win) you find different goals.”

Both current and former world champions know how to win and it would be foolish to bet against them doing so again.

5. Winners understand that failure leads to success

One of the biggest differences I notice working with startups compared to corporate businesses, is the way they handle failure. In F1, much like a startup, failure is a step on the path to success – if you never crash then you’re just not trying hard enough and therefore will never achieve your potential – success comes from understanding your limits (or the rules) and learning to operate (‘just’) within them.

Success in the corporate world relies on avoiding failure or being skilled enough in passing the blame onto someone else.

But it’s not all bravado. Through failure we learn, and one of the best ways of doing so is admitting when we don’t know something.

In F1, the winning drivers and constructors embrace risk, recognising it as the path which leads to a clear competitive advantage – they’re also not afraid to learn from the success of others. Red Bull Racing’s Adrian Newey is a legend among F1 engineers and a consummate risk taker, using innovations such as the exhaust-blown diffuser to build a dominant car between 2011 and 2013.

With the hybrid powertrains of 2014, Newey continued his risky ways, building a tightly-packaged car which left the team floundering with unreliability in pre-season testing. Five races into the season and Red Bull Racing lie ‘second’ in the championship behind the dominant Mercedes cars, and despite the 113 point deficit nobody is prepared to dismiss their chances because they’ve shown how well they can learn from failure.

Gallagher cites 1997 F1 World Champion, Jacques Villeneuve, as an example of a driver who learned to manage risk and turn it to his advantage.

MG: “Jacques started his racing career knowing it was the sport which killed his father (Gilles). Despite experiencing a huge personal tragedy, which for most people would cause them to run in the opposite direction, he decided to go on and do exactly the same thing, and not only that, he ends up being more successful than his father (winning the 1997 F1 drivers title).”

6. Winners inspire success in others

Pay a visit to the headquarters of Red Bull Racing in Milton Keynes and you’ll see a monument to their achievements as soon as you walk through the door – a glass tower of trophies reaching up to the ceiling – but it’s easy to overlook why this exists.

According to the team, “Science has proven that 0.7 per cent of F1 is glamorous: the rest is long hours and really, really hard work.”

Team Principal Christian Horner makes a point of celebrating success, but more importantly inspiring success in the workers who never taste that winning champagne.

MG: “A lot of businesses I speak to have this notion that because you work in F1 it must be incredibly glamorous, but 90% of the employees in F1 teams do not travel and the most they see of the sport is what you and I see on TV.”

It’s very rare to find an organisation where every single person is dedicated to maximising their own performance, but that’s the predominant characteristic of the top teams and constructors in F1.

F1 as a business is very good at conveying the accomplishments from the front-end to those behind the scenes. According to Gallagher, “within the top teams everyone gets that ‘winning feeling’ because a huge amount of effort is made to engage staff and make them feel part of the success.”

MG: “If you walk into McLaren, the attention to detail hits you straight away, but the other thing is the working environment they’ve created – so everyone in the factory feels they’re part of a technology company that’s doing great things and there’s a real sense of pride. When you go to the McLaren canteen you walk past a Bruce McLaren Can-Am car and Emerson Fittipaldi’s McLaren M23. No matter who you are in the company, you can’t fail to be energised by that.”

Every successful brand needs a strong narrative, a story which it conveys that inspires people to support it or buy into its goals. The very best organisations build this into their communication processes and reinforce the value contributed by every member of staff.

7. Winning organisations reduce complexity and empower leaders

Successful teams in F1 have many lessons to teach those in business, but there are still a few tricks which the corporate world has to teach F1.

While many corporate businesses employ upwards of 100,000 people, an F1 team might only contain around 600 full-time staff. At their biggest they’re still only SMEs (‘Small Medium Enterprises’) and yet many have become hampered by top-heavy management and slow decision making.

Part of the problem stems from the increased prevalence of the leadership-employee, where the person responsible for strategic and operational decisions no longer owns the team, and part from the greater influence of corporate management over those teams (such as BMW, Toyota, Mercedes).

Gallagher captures some of the key points in his recent article; “Formula One’s Leadership Conundrum”.

MG: “The complexity of the business that is Formula One has increased dramatically (in recent years) and that’s because we’ve gone from being a Eurocentric industry to truly Global one and the range of disciplines we now need to have within a Formula One team has gone from having chassis and engine designers to also vehicle dynamics, information technology specialists, software, control systems.. the list has grown substantially and therefore the complexity of managing this is on a level that we haven’t seen before.”

The flip-side of this dynamic is whether some of the F1 teams are beginning to mirror the complexity of the organisational structures in business and in that regard Gallagher’s response is unequivocal;

MG: “I definitely think that is the case. When I see team principals who are merely employees that makes me worried, because the board can decide to get rid of that person and they don’t have the final word.”“Perhaps the most embarrassing example in recent years were the team principals of Toyota and BMW who would sit at the table with Bernie Ecclestone, Ron Dennis, Frank Williams and Eddie Jordan and apparently be of the same position but be unable to make decisions, then the plugs were pulled in both of their companies overnight by boards sitting in Munich or Tokyo.”

Over the winter period McLaren made a retrospective change when Chairman Ron Dennis re-took control of the team, displacing team principal Martin Whitmarsh and bringing in Eric Boullier in the role of Race Director. Dennis was at the helm for most of McLaren’s 8 constructors world championships and 12 drivers titles, but more importantly he is able to take decisions without being subject to the approval (or veto) of a corporate board.

MG: “When you look at 1988 when McLaren won 15 out of 16 grand prix, the thing I found really fascinating at the time was when Ron Dennis was interviewed and was asked how ‘delighted’ he was with the achievement. Ron answered, ‘what we really need to understand is why we didn’t win 16 out of 16 races, and the second thing we need to understand is how we can keep winning 15 out of every 16 grand prix in the future’. “

Gallagher is a great believer in the value of a benevolent autocracy (where an authoritarian leader exercises absolute power for the greater good), particularly in a high-performing organisation where the clarity of decision making is critical. The tone of voice of the business is heavily influenced by such a leader and the values which he or she represents.

He cites one of the teams which he was working with while at Cosworth;

MG: “One of the teams had 11 people whose titles involved the word President, or Chief (as in Operating Officer, Financial Officer or Executive Officer) and some of those people used to say to me ‘our board meetings last forever and achieve nothing, because it’s just a talking shop.’ – unsurprisingly they struggled near the back of the grid.”

As in business, complexity is the enemy of progress. Over the years I’ve learned that complexity stems from an inability to decide on the right priorities. If something seems complex then it’s probably because you’ve yet to distil it down to its root components.

The same applies to leadership – choosing a leader and then supporting that leader is how teams like Red Bull Racing respond so swiftly to competition.

F1 can still learn a thing or two from businesses, racing teams like other SMEs can become incredibly reliant on a few key individuals, leaving them vulnerable to the ebb and flow of changes (in regulations or team personnel). But as Gallagher says, “All F1 teams have common traits, what’s different between the front and back of the grid is the way those resources are harnessed – almost inevitably the difference comes down to people.”

Conclusion

Building a sustainable organisation depends as much on people (how they’re chosen, motivated and led) as the technology used in delivering their performance, certainly more so than money, otherwise teams such as Toyota would have won several championships during their time in F1.

It goes without saying that winners never quit. Every successful F1 team and driver has shown a relentless determination to win and a belief that hard work is the foundation of any worthwhile achievement.

But if there’s one thing F1 can show business, it’s this; winning requires every person in a team to give their best and to focus their efforts on achieving the same goal. Think of that when you next watch F1, what you’re seeing is eleven of the most effective organisations on the planet – the driver is just one piece in the puzzle.

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Thanks to Mark Gallagher and Steve Hindle for their contributions. If you enjoyed this article and would like to find out more, get in touch with me on @driversrepublic. You can keep up to date with Mark Gallagher on Twitter at @_markgallagher and contact him for public speaking engagements via his website. Further Reading: Maximise Potential is a programme of easily-digestible podcasts featuring interviews with inspiring people from the world of sport and business. From the Polar Explorer, Pen Hadow to Opera Singer, Janine Roebuck there’s plenty to draw further lessons from outside the world of Formula One.

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