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Team Favorite: Fueling Success for Mercedes F1 with Toto Wolff · Masters in Business

0:02
Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
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Speaker 2: This is Master's in Business with Barry rid Hoolts on
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Speaker 2: Bloomberg Radio.
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Speaker 1: What can I say about this week's guest, Total Wolf,
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Speaker 1: principal CEO of Mercedes Formula one race team. What an
0:25
Speaker 1: incredible career from a winning racer to an investor and
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Speaker 1: venture capitalist, to a person who just kind of became
0:36
Speaker 1: a principal at Williams and then eventually after that team
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Speaker 1: surprisingly began to win, got recruited over to Mercedes, where
0:45
Speaker 1: he has put together a fantastic track record. His rookie
0:50
Speaker 1: year at Mercedes was the same rookie year for Lewis Hamilton.
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Speaker 1: Obviously they've had an amazing run together. I don't know
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Speaker 1: what else I could say about this conversation. If you're
1:01
Speaker 1: a fan of Formula one racing, if you're a fan
1:04
Speaker 1: of managing a team of people, if you're interested in
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Speaker 1: how to ring out every last millisecond of performance, you're
1:13
Speaker 1: going to find this conversation absolutely fascinating. I know I did,
1:17
Speaker 1: with no further ado my discussion with Mercedes F One's
1:21
Speaker 1: team principal Total Wolf. I don't want to waste time
1:25
Speaker 1: singing your accolades let's just jump right into this undergraduate
1:29
Speaker 1: Vienna University of Economics and Business. How did you end
1:34
Speaker 1: up in racing? It sounds like you were going into finance.
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Speaker 2: Dropout, dropout. Yeah, so yeah, I was born and raised
1:42
Speaker 2: in Vienna and went to the Vienna u University of Economics,
1:46
Speaker 2: but actually raced in junior formulas at the time and
1:51
Speaker 2: wanted to be a race driver. And when that ended,
1:54
Speaker 2: abruptly ran out of money and we had a very
1:58
Speaker 2: bad spell of accidents in Formula one, so I lost
2:00
Speaker 2: a sponsor. I decided I'm going to quit both. I'm
2:03
Speaker 2: gonna quit UNI and I'm going to quit racing and
2:05
Speaker 2: launch myself into working.
2:07
Speaker 1: And you were fairly successful as a race so you
2:10
Speaker 1: began an Austrian Formula Ford. You won the twenty four
2:13
Speaker 1: hours of Bahrain, which is an unusually any twenty four
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Speaker 1: hour races difficult. How do you what's the key to
2:20
Speaker 1: winning twenty four hours of driving?
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Speaker 2: Yeah? So the twenty four hour race was in Dubai
2:25
Speaker 2: and was in so far relatively important because it was
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Speaker 2: the first big raase of twenty four hours in the
2:30
Speaker 2: Middle East. So you have three drivers of four and
2:33
Speaker 2: you're having two hour stints, and it's and it's challenging
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Speaker 2: from mentally and from the human body because sometimes you
2:38
Speaker 2: have to get up at two o'clock and drive from
2:40
Speaker 2: two to four in the ninth But it was all
2:42
Speaker 2: part of my racing and I loved every minute.
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Speaker 1: So you go from racing to saying, all right, I
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Speaker 1: don't have a career in racing, I'm gonna go into finance.
2:52
Speaker 1: And you found March fifteenth in nineteen ninety eight. Tell
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Speaker 1: us a little bit about what sort of investing you
2:58
Speaker 1: were doing in the late nine Yeah.
3:01
Speaker 2: So the first company was called March fifteen and then
3:04
Speaker 2: March sixteen, and there is not a lot of meaning
3:06
Speaker 2: behind it. It was just the data incorporated it and
3:08
Speaker 2: that felt the easiest. So back in the day you
3:10
Speaker 2: wouldn't think a lot about brand. And I went to
3:15
Speaker 2: the US for a couple of months and realized that
3:18
Speaker 2: internet companies were coming up here Yahoo, America Online and
3:22
Speaker 2: Netscape And went back to Austria and figured out who
3:26
Speaker 2: is doing that in Austria and stumbled up upon a
3:31
Speaker 2: few websites and met these people, sometimes not even companies.
3:37
Speaker 2: One was a seventeen year old board that round the
3:40
Speaker 2: largest free SMS platform online and set up structure around it.
3:46
Speaker 2: It was equity for consulting, so I didn't get any
3:48
Speaker 2: didn't buy anything because I didn't have the money, and
3:52
Speaker 2: it was just a good timing. In ninety nine and
3:54
Speaker 2: two thousand we started to IPO companies and it became
3:57
Speaker 2: a proper menture capital company from from consulting.
4:00
Speaker 1: Actually, and let's first forward a little bit to two
4:03
Speaker 1: thousand and nine. You invest in the Williams F one
4:07
Speaker 1: team and eventually in twenty twelve you become their executive director.
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Speaker 1: How is that transition? How do you go from being
4:15
Speaker 1: a venture investor running a team.
4:18
Speaker 2: Yeah, the ten years in between was going from pretty
4:22
Speaker 2: much tech investor into motor racing. I bought a touring
4:27
Speaker 2: car team. We were doing FORMA three Engines for Mercedes.
4:32
Speaker 2: Was quite an extensive program about our raality team as well,
4:36
Speaker 2: and so in these ten years I kind of merged
4:39
Speaker 2: my passion for the spot with the investment world. And
4:43
Speaker 2: as you say, Williams was the first former one team
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Speaker 2: I got myself into, had a minority stake, and then
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Speaker 2: I run it in twenty twelve with Frank Williams because
4:53
Speaker 2: the CEO decided to depart and This is where basically
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Speaker 2: my Formula one active Formula one story started.
5:00
Speaker 1: So Williams at the time wasn't exactly front of the grid.
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Speaker 1: You help them win a big race and suddenly you're
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Speaker 1: now competing with much better known, better funded teams. How
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Speaker 1: are you competitive with You know, you're fighting an uphill
5:17
Speaker 1: battle when you're at Williams.
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Speaker 2: Energy only just energy. Yeah, we didn't have the infrastructure,
5:22
Speaker 2: not the capability. The drivers work were not on the
5:27
Speaker 2: level of Louise Hamilton and others. It was the energy
5:31
Speaker 2: in the team. People gave it all. They had heart
5:34
Speaker 2: and soul and I think we moved, We moved barriers,
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Speaker 2: we moved, We fought against adversity and we want to
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Speaker 2: race just because the people gave it their all.
5:44
Speaker 1: H So you're involved in an initial public offering for
5:49
Speaker 1: hwa AG, the company behind Mercedes Racing. Tell us a
5:56
Speaker 1: little bit about that IPO and that lead to your
6:00
Speaker 1: relationship with Mercedes.
6:03
Speaker 2: Yeah, that's quite interesting because that when AMG was bought
6:08
Speaker 2: by Mercedes, the racing side was spun out because the
6:12
Speaker 2: big Timeler corporation didn't want to have the headaches with
6:16
Speaker 2: motor racing, you know, with the unions this is weekend
6:20
Speaker 2: work and you want to stay argile as a corporate
6:23
Speaker 2: to say well we're in the spot or we're out
6:25
Speaker 2: without having too much overhead and headache. So that was
6:28
Speaker 2: spun out and it was a really good high tech company.
6:31
Speaker 2: They built engines for Formula three y as I said before,
6:34
Speaker 2: touring cars for the very famous DTM racing series. This
6:37
Speaker 2: is the equivalent of NASCAR in Germany or in Europe.
6:41
Speaker 2: Limited editions broadcast for MG and high margin business. And
6:46
Speaker 2: I bought forty nine percent of that business with the
6:48
Speaker 2: found of MG, and we iPod it and sold it
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Speaker 2: to investors and then to a Katari investment fund and
6:58
Speaker 2: that was a success story.
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Speaker 1: So how did that IPO lead to you eventually getting
7:04
Speaker 1: tapped by Mercedes to both take a piece of the
7:08
Speaker 1: of the team and become principal.
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Speaker 2: So it was multi faceted because we had this company
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Speaker 2: where we were basically doing all the work for Mercedes
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Speaker 2: Racing outside of Formula one. I had a driver management
7:24
Speaker 2: company where fifty percent would be paid by Mercedes, fifty
7:27
Speaker 2: percent by myself and so we established a trusting relationship.
7:31
Speaker 2: And then I obviously embarked into being with Williams which
7:33
Speaker 2: was a competitive of Mercedes. We won a race and
7:36
Speaker 2: they were interested to understand how can that be. You're underfunded,
7:39
Speaker 2: back market team and you're beating us on track, and
7:43
Speaker 2: they asked me, could you evaluate that? And I said,
7:45
Speaker 2: I don't want to bed mouth anybody, but I can,
7:47
Speaker 2: so I did that. They came back and said, would
7:49
Speaker 2: like to offer you to run this as a head
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Speaker 2: of Mercedes multip.
7:53
Speaker 1: Was that a surprise? Was this? Like? Very did you
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Speaker 1: have any during that conversation? Hey, why is a wealth funded,
8:00
Speaker 1: big team asking me how we beat them? It sort
8:03
Speaker 1: of seems like an unusual situation, especially how competitive everybody
8:08
Speaker 1: seems to be in the paddocks.
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Speaker 2: I think the board realized that that stage that I
8:11
Speaker 2: bought a world championship team winning team with brawn, and
8:15
Speaker 2: that the results were getting worse and worse and they failed.
8:19
Speaker 2: They had no grip on what was actually happening, and
8:22
Speaker 2: that's why they asked me. They knew that I was
8:24
Speaker 2: not biased because I had another team, but I was
8:27
Speaker 2: with them in touring cars, and this is how it
8:30
Speaker 2: all came about.
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Speaker 1: So you become a thirty percent owner of the Mercedes
8:35
Speaker 1: Patrona's team and the principal. How long is it before
8:42
Speaker 1: that team starts winning races? What were the first couple
8:44
Speaker 1: of years.
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Speaker 2: Like, So, my first day was in January twenty thirteen,
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Speaker 2: and it was a difficult situation because I got the
8:51
Speaker 2: job of head of Mercedes Motorsport and at the same
8:54
Speaker 2: time sharehold of the team and executive director. But those
8:57
Speaker 2: two posts were, you know, where we people that were
9:00
Speaker 2: icons in the industry, a gentleman who was running Mercedes
9:04
Speaker 2: Motorsport and then Ross Brown, a highly decorated technical director,
9:07
Speaker 2: was running the team, and so had to manage that situation.
9:10
Speaker 2: Eventually took over and when I joined, we started to
9:14
Speaker 2: win races. In that first year, we won three races
9:18
Speaker 2: with Lewis joined that year as well at the same
9:20
Speaker 2: time as me.
9:21
Speaker 1: That was his rookie year. You started the same time.
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Speaker 2: Yeah, we were both rookies and Mercedes basically huh. And
9:28
Speaker 2: that started to be a successfully and by the end
9:29
Speaker 2: we were front runner and we finished second in the
9:33
Speaker 2: championship and from then on we introduced new engine regulations
9:36
Speaker 2: in fourteen, which was really co expertise of Mercedes obviously,
9:40
Speaker 2: and then we had this run of eight consecutive World Championships.
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Speaker 1: Unprecedented run. We've never seen anything like that, even in
9:47
Speaker 1: the Schumacher era. I don't think he won eight consecutive championships.
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Speaker 1: I have to ask an obvious question. You're in venture
9:57
Speaker 1: capital investing, you're in race saying, what similarities do you
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Speaker 1: find between the two fields. You're dealing with a lot
10:05
Speaker 1: of data, you're dealing with a lot of unknowns. Did
10:08
Speaker 1: your background and venture investing help you put together the
10:13
Speaker 1: winning streak at Mercedes?
10:15
Speaker 2: It always starts with the human being because in tech,
10:18
Speaker 2: human beings have ideas, they manage processes, and it's the
10:23
Speaker 2: same in formula one. When you talk about a company
10:26
Speaker 2: or a team, what is that? And it's basically a
10:29
Speaker 2: bunch of people that on this professional journey together. So
10:35
Speaker 2: I around people that run racing cars, and I did
10:37
Speaker 2: the same when I was a venture capital invest stock.
10:40
Speaker 2: I tried to hire and develop the best people to
10:43
Speaker 2: run a specific organization.
10:45
Speaker 1: And I mentioned when you joined Mercedes you took a
10:48
Speaker 1: thirty percent ownership stake. Did I read this correctly? You
10:51
Speaker 1: recently raised your stake in that, So what's your ownership
10:55
Speaker 1: now of the team?
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Speaker 2: Yeah, exactly. When they offered me to run it, I said,
10:59
Speaker 2: that is super honorable. But I'm a shareholder at Williams
11:04
Speaker 2: and the deal we found is that I bought forty
11:06
Speaker 2: percent from the Abu Dabistar and fund, and then Nick
11:10
Speaker 2: Lauder came in and he bought ten percent, so it
11:12
Speaker 2: was sixty Mercedes, thirty myself and ten Niki Lauda. And
11:15
Speaker 2: when Nikki passed away, we found another investor. In today's
11:18
Speaker 2: three shareholders each with thirty three point three percent, so
11:21
Speaker 2: I increased my stake. As you say, so.
11:24
Speaker 1: You're you're not a majority shareholder, but you're the principal.
11:28
Speaker 1: How do you juggle dealing two other substantial shareholders, especially
11:34
Speaker 1: when things become challenging.
11:35
Speaker 2: I mean, I couldn't wish for a better shareholding group
11:38
Speaker 2: because within Naios we got a tremendous powerhouse behind us,
11:43
Speaker 2: a very financially profitable organization. Obviously chemicals business and that
11:49
Speaker 2: is you go through cyclics. But Jim Redcliffe, the founder,
11:53
Speaker 2: is involved in Manchester United and an America's Cup, in skiing,
11:57
Speaker 2: in cycling, so that was always that was a good
12:00
Speaker 2: deal financially made sense. It was during COVID and then
12:05
Speaker 2: Mercedes obviously providing us with this mighty car brand the
12:08
Speaker 2: seven most valuable brand in the world, and I'm running
12:10
Speaker 2: it and between us situary well understood who contributes. And
12:14
Speaker 2: I deem myself very lucky that I have a shareholder
12:17
Speaker 2: with Mercedes that's basically giving us the keys the responsibility
12:21
Speaker 2: for this brand. And it's been great. The current Coola Calaneus,
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Speaker 2: Marcus Schaeffer CTO and the whole Bot gang is fantastically supportive,
12:30
Speaker 2: and you know that's part of our success.
12:33
Speaker 1: You seem to thrive in very competitive environments, not just
12:37
Speaker 1: investing and racing, but America's Cup and yachting, free diving,
12:44
Speaker 1: like you do a lot of what some people would
12:48
Speaker 1: perceive as calculated, high risk activities. What is the competitive drive?
12:54
Speaker 1: Where does this come from?
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Speaker 2: I don't know it. When I was young, and obviously
12:59
Speaker 2: in racing, it was always a relative competition, you want
13:03
Speaker 2: to beat the other guy, and I realized over the
13:06
Speaker 2: years that it was actually more a competition with myself
13:10
Speaker 2: setting expectations and trying everything in order to achieve that.
13:16
Speaker 2: And today racing, whilst it's still a relative and we
13:20
Speaker 2: want to beat our competitor, it is more for us.
13:23
Speaker 2: It's not only me in the team. We want to
13:25
Speaker 2: surpass our expectations and if we lose, it's not particularly
13:28
Speaker 2: losing against another team, it's losing against ourselves. And the activities,
13:33
Speaker 2: like you mentioned, is a fight against myself. How far
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Speaker 2: can I push myself? And I love free diving. It
13:38
Speaker 2: has a meditative component for me that I like. I
13:42
Speaker 2: like the water, and achieving certain depth is expectations that
13:48
Speaker 2: are set myself and I don't need to have anybody
13:51
Speaker 2: competing with me.
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Speaker 1: What's the longest you can hold your breath? I know
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Speaker 1: you must have timed this to the second.
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Speaker 2: Four minutes and fifteen seconds.
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Speaker 1: What do you think about some of these world champions
14:03
Speaker 1: who are holding their breath ten, twelve, fourteen minutes? It
14:06
Speaker 1: seems superhuman.
14:08
Speaker 2: Yeah, there was obviously the grades of the spot that
14:11
Speaker 2: have achieved it, but there is two different angles to
14:14
Speaker 2: it somehow. Basically, you pump fresh oxygen in your body
14:19
Speaker 2: to fill your lungs and that basically doubles your time
14:25
Speaker 2: underwater holding your breath and when you're doing it without it,
14:28
Speaker 2: without it it forming. It is quite a good benchmark.
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Speaker 1: So we talked earlier your rookie years with Lewis Hamilton.
14:36
Speaker 1: I know you're a very competitive guy. Did you have
14:40
Speaker 1: any sense when you were first beginning the sort of
14:43
Speaker 1: run the two you were going to go on.
14:46
Speaker 2: No, not at all. I think when I joined the
14:50
Speaker 2: team they finished fifth in the World Championship, and then
14:55
Speaker 2: we quickly became so competitive. And it is not particularly
14:58
Speaker 2: just because of Lewis and myself. A really good group
15:01
Speaker 2: came together and started to form in twenty twelve before
15:04
Speaker 2: my time, and then it kind of started to rule.
15:07
Speaker 1: And I want to put some flesh on those numbers.
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Speaker 1: Eight consecutive Formula One Constructors championships from twenty fourteen to
15:16
Speaker 1: twenty twenty one. Seven consecutor drivers championships, and I put
15:21
Speaker 1: an asterisk on it because we all know that eighth
15:23
Speaker 1: one was stolen. We won't go get into that. I
15:26
Speaker 1: don't want to put words in your mouth. This is
15:28
Speaker 1: me saying that you you mentioned the whole team, and
15:33
Speaker 1: that it's not just you were the driver. Tell us
15:36
Speaker 1: about all the various people involved in this team. This
15:40
Speaker 1: really is a team sport.
15:43
Speaker 2: Absolutely every single team member contributes to the team's success.
15:49
Speaker 2: And how I'd liked to make the let's say the
15:51
Speaker 2: breach to people that would be saying, well, what is
15:55
Speaker 2: my contribution? To the car speed. It is that someone
15:58
Speaker 2: in another team, Ferrari or red Bull is doing your job.
16:02
Speaker 2: Whether it's in accounting, it's finance and cleaning, someone is
16:05
Speaker 2: doing that job. And as long as you're able to
16:07
Speaker 2: outperform that person, and you keep that in mind, you're
16:09
Speaker 2: contributing to the team's dynamic and to the team's success.
16:13
Speaker 2: And that's why everyone in their position, if done with
16:19
Speaker 2: discipline and responsibility, is contributing to making the car faster.
16:24
Speaker 1: And when you say everyone, I want to go into
16:27
Speaker 1: some details about some of the things you did, because
16:31
Speaker 1: initially people thought it was ridiculous, and then the data
16:34
Speaker 1: backed you up. At one point, you had the people
16:38
Speaker 1: who cleaned the bathrooms make sure everything was wiped down
16:43
Speaker 1: twice a day. You did these changes to something as
16:46
Speaker 1: simple as the brush that you used to clean the
16:49
Speaker 1: ball and people thought you were a little obsessive compulsive
16:52
Speaker 1: about it. Hey, why is Toto so nuts about the bathroom?
16:55
Speaker 1: But it turns out your team gets ill last day
16:59
Speaker 1: stuff for stomach virus is last just there was a
17:03
Speaker 1: uptick in the overall health of everybody in the organization
17:08
Speaker 1: once you implemented that. What detail is too small for you?
17:13
Speaker 1: To notice.
17:14
Speaker 2: I've rarely seen cutting edge businesses without the founder of
17:20
Speaker 2: the CEO or some of the top management being obsessed
17:23
Speaker 2: with the detail. You have to be, because if you
17:25
Speaker 2: don't have an attention to detail, how should the rest
17:27
Speaker 2: then fly? And I came into the office my first
17:30
Speaker 2: day and I said, in the lobby and there was
17:32
Speaker 2: an old daily Mail week, old daily Mail newspaper and
17:35
Speaker 2: some old coffee cups. And when I came to the guy,
17:38
Speaker 2: Chross Brown, I was running and I said, well, that's
17:40
Speaker 2: not how Formula one team should look like. And the
17:42
Speaker 2: answer was the engineering is what makes a car quick,
17:46
Speaker 2: and not the appearance of the reception. And I said, well,
17:50
Speaker 2: I disagree, because it's the attention to detail that is important.
17:52
Speaker 2: And if the reception as a point of sale, fire
17:55
Speaker 2: and I font team is not the standard. And what
17:56
Speaker 2: is the rest?
17:57
Speaker 1: Why do people think they're mutually exclusive? You have great
18:00
Speaker 1: engineering and a clean bathroom and lobby.
18:03
Speaker 2: Yeah, and chose your mindset, I guess. And you mentioned
18:07
Speaker 2: the bathroom story, which has become a little bit famous,
18:11
Speaker 2: and it's not being obsessed. But long before COVID, we
18:14
Speaker 2: had had sanitizers that were drilled into the walls of
18:17
Speaker 2: the races where we were going, we had a hygiene manager.
18:19
Speaker 2: To today's many of them that looked after our health.
18:23
Speaker 2: When you have sponsors and CEOs and husbands and wives
18:27
Speaker 2: that are visiting our grand prixs and issuing big checks,
18:30
Speaker 2: they are expecting these standards. You can't have a dirty bathroom.
18:34
Speaker 2: And for me, there's no job too small, And I
18:37
Speaker 2: know what I expect from going into a bathroom. So
18:40
Speaker 2: this is how I taught them what I would think
18:43
Speaker 2: it should be done. And yeah, it's maybe one example
18:46
Speaker 2: of many others.
18:47
Speaker 1: I mean, it's an extreme example, but it points to
18:50
Speaker 1: a certain culture and mindset. Talk a little bit about
18:54
Speaker 1: the importance of culture to any organization.
18:59
Speaker 2: Culture is the immune system of any organization, the immune
19:02
Speaker 2: immune system, because when times are tough, that keeps the
19:06
Speaker 2: team together, keeps the people aligned beyond maybe the co objectives,
19:12
Speaker 2: because when you fail, you know, those objectives become difficult
19:16
Speaker 2: to reach. And here's the crux. You can quickly put
19:21
Speaker 2: some values on a piece of paper and say that's
19:26
Speaker 2: our culture now, and we projected on the wall the
19:30
Speaker 2: PowerPoint and this is the standards we want to live to.
19:33
Speaker 2: But the truth is, you've got to live it in
19:35
Speaker 2: and they out. And for us, attitudes like loyalty and humility,
19:42
Speaker 2: integrity just not just not words that we think about
19:47
Speaker 2: some time because this, but these are the basic principles
19:49
Speaker 2: upon we act. The old motto we're not all cost
19:52
Speaker 2: doesn't work for us. And I don't want to work.
19:55
Speaker 2: I don't want to win, not along those lines, because
19:58
Speaker 2: it means you're not maybe you're playing matter rules or
20:01
Speaker 2: you're stretching the rules to a degree that I feel comfortable.
20:04
Speaker 2: We are in a business of reputation, and in that respect,
20:09
Speaker 2: I want to do it the right way, and everybody
20:11
Speaker 2: in the team wants to do it the right way.
20:12
Speaker 2: We're playing the long game. It's not a game or
20:15
Speaker 2: a race, but it's the next twenty years. Huh.
20:17
Speaker 1: Really interesting. I have a bunch of rule questions for
20:20
Speaker 1: you later, but I want to stay on the topic
20:23
Speaker 1: of culture and people. How do you invest in and
20:27
Speaker 1: retain talents? And I don't mean just a driver, I
20:31
Speaker 1: mean engineers, everybody across the board. How do you find
20:36
Speaker 1: and retain the best talent.
20:38
Speaker 2: Like any other team and company out there. That's the
20:41
Speaker 2: most complex of all actions because hiring the best talent
20:47
Speaker 2: and developing isn't yet a guarantee to long term success
20:50
Speaker 2: because environment change or exchange, people change, and I think
20:56
Speaker 2: this is at the core of what we are trying
20:57
Speaker 2: to achieve and retaining them in the same way. You know,
21:01
Speaker 2: we've been successful eight times in a row, won the championship,
21:05
Speaker 2: and then obviously people get interesting opportunity if somebody doubles
21:09
Speaker 2: your salary and another team, you have to have the
21:11
Speaker 2: responsibility towards your family to consider that such moves. And
21:15
Speaker 2: that's why it's the normal lab and flow with people
21:18
Speaker 2: coming and people leaving. But you want to stay with
21:22
Speaker 2: that core team that your team as being essential for
21:24
Speaker 2: the success.
21:25
Speaker 1: How do you plan for that? I know there's a
21:29
Speaker 1: sort of hyper competitive set of I don't want to
21:34
Speaker 1: use the term poaching, but someone says, hey, we need
21:37
Speaker 1: this sort of mechanic or this sort of engineer. I
21:41
Speaker 1: like that guy as that team. How do you plan
21:43
Speaker 1: for that? How do you cope with that loss of talent?
21:46
Speaker 2: I think you need to have an overview about your
21:48
Speaker 2: organization and the blueprint of how you want to have it.
21:52
Speaker 2: And sometimes you operate even sometimes you operate along those
21:57
Speaker 2: lines and you still fail in terms of the results.
22:00
Speaker 2: So knowing who performs to which levels, where you're having gaps,
22:06
Speaker 2: do you need to hire outside or develop from within,
22:09
Speaker 2: bring up talent, and who is who is at risk
22:12
Speaker 2: to be poached anyway, I think an overview of the
22:15
Speaker 2: organization is key.
22:17
Speaker 1: So let's stay with that topic. Last year was a
22:20
Speaker 1: really challenging season. How do you keep the team motivated?
22:24
Speaker 1: How do you face challenges when just it seems like
22:28
Speaker 1: maybe two years ago especially, it felt like everything was
22:30
Speaker 1: going wrong for the first half of the season. How
22:33
Speaker 1: do you keep everybody's spirits up and people focused on
22:37
Speaker 1: the job at hand.
22:39
Speaker 2: It starts with myself. I have to acknowledge that maybe
22:43
Speaker 2: my motivation or my energy levels are not that good
22:47
Speaker 2: if our results just don't happen, but it needs to.
22:52
Speaker 2: I'm the one who kind of needs to have that energy,
22:57
Speaker 2: imparts into the organization and keep the organization up. So
23:01
Speaker 2: do my colleagues on the leadership level. And that's not easy.
23:05
Speaker 2: It's not easy. You're having fald stones. You said your
23:09
Speaker 2: expectations based on the previous results, and if they were great,
23:12
Speaker 2: then obviously everything is a failure. So it's been a
23:14
Speaker 2: process over the last three years to rationalize, not be
23:19
Speaker 2: carried away with your emotions either way, and it's a
23:23
Speaker 2: valuable time. And I'm sure we will be looking back
23:25
Speaker 2: in ten and twenty years and saying we had those
23:27
Speaker 2: eight consecutive World championships, and then we had a P three.
23:31
Speaker 2: We finished third in a championship, then second in a championship.
23:34
Speaker 2: Now it's more complicated at force, but we want three races.
23:37
Speaker 2: So this is still a more successful season than the
23:39
Speaker 2: once before and it's all part of the learning, as
23:43
Speaker 2: tough as it is when you're right in there.
23:45
Speaker 1: So you're working on a new legacy with two young drivers.
23:49
Speaker 1: What can we expect from Kimmi Antonelli? How do you
23:52
Speaker 1: compare his driving style to his predecessors?
23:56
Speaker 2: Obviously, Louis Hamilton is irreplacible, is the greatest champion that
24:02
Speaker 2: has existed. He's a fantastic personality. He's a core family
24:06
Speaker 2: member of our team. But he decided he wants to
24:11
Speaker 2: pursue the Ferrari dream, and like every Formula One driver
24:14
Speaker 2: wants to do that, he got a fantastic framework of
24:16
Speaker 2: an agreement and I'm at peace with it because we
24:22
Speaker 2: decided to sign a short term deal with him because
24:24
Speaker 2: we wanted to promote them to nailin to the team
24:25
Speaker 2: and not lose him like we did with a Stub
24:27
Speaker 2: ten years ago. So that is all very structured and amicable.
24:32
Speaker 2: And now we have two drivers in our team that
24:35
Speaker 2: are really juniors since the early days. George Russell was
24:37
Speaker 2: a menacedest junior since he was seventeen and Kimmi since
24:41
Speaker 2: he was twelve. So having a lineup of an eighteen
24:45
Speaker 2: year old and twenty seven year old is our future
24:49
Speaker 2: and that means developing and there will be moments where
24:52
Speaker 2: we tear our hair out, but he's quick and we've
24:54
Speaker 2: seen that in the same way George. It's a great
24:56
Speaker 2: opportunity for George to be the more senior driver and
24:59
Speaker 2: the team at that stage. I'm happy about it.
25:00
Speaker 1: So Hamilton one Silverstone in July kind of felt like
25:04
Speaker 1: a bittersweet victory. What were you thinking when when he
25:08
Speaker 1: took the podium.
25:10
Speaker 2: It was only sweet. That was no bitter part of
25:12
Speaker 2: it because we're still racing together. He will be part
25:16
Speaker 2: of Mercedes's history forever, and him winning the British Grumpuin
25:19
Speaker 2: his final year with Mercedes, against all odds, we couldn't
25:23
Speaker 2: have scripted it better.
25:24
Speaker 1: And there has to be some sort of farewell we're
25:28
Speaker 1: planning for him at the end of the year. What
25:31
Speaker 1: are you thinking about? How are you gonna, you know,
25:34
Speaker 1: put a put a cap on this long term relationship.
25:39
Speaker 2: When you look at it from a let's say, purely
25:41
Speaker 2: professional side, When he's leaving Mercedes, he's going to one
25:44
Speaker 2: of our competitors. Do we want to leave that like that?
25:49
Speaker 2: And the question is the answer is no, certainly not.
25:52
Speaker 2: We had so much success with each other. We want
25:54
Speaker 2: to celebrate the time that that we had. And in
25:58
Speaker 2: that respect, I think there's more many activities planned. He
26:01
Speaker 2: doesn't know about it. He doesn't know what it is.
26:05
Speaker 1: Secrets here.
26:05
Speaker 2: No, he knows that something's coming, but he doesn't know
26:08
Speaker 2: what it is. And I'm very much looking forward to
26:11
Speaker 2: that emotion, which is to this moment that's clearly going
26:13
Speaker 2: to be very emotional.
26:14
Speaker 1: It does seem like you are playing a very different game,
26:18
Speaker 1: a very long game, than everybody else. I sometimes and
26:23
Speaker 1: I know Drive to Survive is, you know, emphasizes the
26:26
Speaker 1: conflict and stuff, but it sometimes seems that people are
26:31
Speaker 1: just thinking about this race or maybe this season. You
26:35
Speaker 1: guys really are looking out a decade or so into
26:38
Speaker 1: the future. How is that built into your DNA?
26:42
Speaker 2: I think, without wanting to be disrespectful, it's different if
26:45
Speaker 2: you're running an organization as an employee that has a
26:47
Speaker 2: certain shild life and needs to perform in order to
26:50
Speaker 2: stay in the job, or my situation as a shareholder
26:55
Speaker 2: being able to look at the long term if you're
26:59
Speaker 2: if you know that, you know, I know if I'm
27:01
Speaker 2: not in principle, I'm going to be on the board
27:03
Speaker 2: or cham and still responsible for the overall company. So
27:08
Speaker 2: I kind of get that that other people need to
27:10
Speaker 2: have more short term perspectives. It's their livelihoods and their
27:14
Speaker 2: professional career. And on the one side, I can look
27:17
Speaker 2: further down into the future, but that shouldn't be an
27:21
Speaker 2: excuse of not being successful at the specific moment.
27:24
Speaker 1: You mentioned. Some of your drivers have come from Mercedes
27:28
Speaker 1: junior teams. Where do you see talent coming from these days?
27:32
Speaker 1: Not just driving talent, but crew and team members, mechanics, engineers.
27:37
Speaker 1: Where are you looking for the next great hire for
27:40
Speaker 1: Team Mercedes.
27:41
Speaker 2: You just need to have a knowledge about the various
27:44
Speaker 2: channels that talent can come up in. On drivers, we
27:47
Speaker 2: are looking at car drivers from the age of eight
27:50
Speaker 2: years old, and we're seeing who can you know who
27:52
Speaker 2: is outstanding?
27:53
Speaker 1: You're literally tracking people a decade before they can even think.
27:57
Speaker 2: Absolutely, we have our scouts that are on the more
28:00
Speaker 2: junior of international count races that are looking at those kids,
28:03
Speaker 2: and we're not the only ones for Oris doing that
28:05
Speaker 2: and some of the other teams. So and when it
28:07
Speaker 2: comes to engineering, we have a very strong undergraduate program,
28:11
Speaker 2: internships and work experiences. We're giving opportunities to underprivileged and
28:15
Speaker 2: underrepresented groups into the team because we believe not only
28:19
Speaker 2: for the sake of doing it to do good, but
28:22
Speaker 2: we believe more variability and diversity in our people will
28:26
Speaker 2: give new perspectives and new perceptions and a lot of
28:30
Speaker 2: ambition and drives so very early into academic careers, we're
28:36
Speaker 2: looking at people.
28:38
Speaker 1: Let's talk a little bit about that diversity. I read
28:41
Speaker 1: following the Black Lives Matter protests and the death of
28:46
Speaker 1: some American citizens at the hands of police. Here, you
28:50
Speaker 1: had a long conversation with Lewis Hamilton. You painted the
28:53
Speaker 1: car black, which was sort of unprecedented that hadn't been
28:57
Speaker 1: done before, kept it that way for at least a season,
29:00
Speaker 1: if I remember correctly, and then made a commitment to, hey,
29:04
Speaker 1: the minorities are very underrepresented in F one. How can
29:07
Speaker 1: we expand this? How has that process gone and how successful.
29:12
Speaker 2: Have you been? I think long before Black Lives Matter,
29:17
Speaker 2: as a team, we have always strived to be diverse.
29:21
Speaker 2: It was part of my upbringing that I saw what
29:24
Speaker 2: it means to be discriminated. Anti Semitism was a strong
29:30
Speaker 2: topic in my upbringing in Vienna, and so that is
29:35
Speaker 2: always how we have been calibrated. And then when obviously
29:38
Speaker 2: Lewis was pushing very hard for more diversity in our
29:43
Speaker 2: population in the team, and we embraced that from the beginning.
29:46
Speaker 2: And then Black Lives Matter started with you know, obviously
29:50
Speaker 2: the things that happened in the in the US, and
29:53
Speaker 2: he said, shouldn't we do you think we should paint
29:55
Speaker 2: the car black, which is a highly unusual question because
29:59
Speaker 2: the silver arrows very much how the Mercedeses are being
30:02
Speaker 2: called in the racing world.
30:03
Speaker 1: That's the history going back to what the nineteen thirties.
30:06
Speaker 2: Yeah, the very the first Mercedes racing car or the
30:10
Speaker 2: earlier Mercedes racing cars were too heavy, so we scratched
30:12
Speaker 2: off the white collar and it was the Bay aluminium,
30:15
Speaker 2: the Bell silver and that state but it was a
30:18
Speaker 2: very quick decision. I called the board of Mercedes at
30:21
Speaker 2: least listen, I have an unconventional question, and I think
30:24
Speaker 2: it's good. Are we doing this? And it wasn't. It
30:28
Speaker 2: was an absolute capital letter, Yes, let's do that. And
30:32
Speaker 2: so you can see the support of the White the
30:34
Speaker 2: Mercedes organization for these topics, and here we go. The
30:38
Speaker 2: car is still black until today.
30:41
Speaker 1: Let's talk a little bit about Netflix and Drive to Survive.
30:46
Speaker 1: I'm a fan of the show. I couldn't help but
30:49
Speaker 1: notice that in the first season, you guys really didn't
30:53
Speaker 1: participate in it. It now looks like you're not only participating,
30:58
Speaker 1: but enjoying it. Tell us a little bit about your
31:01
Speaker 1: experience with Netflix.
31:03
Speaker 2: Clearly, Ferrari and do has got that wrong at the beginning,
31:06
Speaker 2: because we decided for ourselves work participants in the Formula
31:09
Speaker 2: one World Championships, and my colleague at Ferrari outspoken Italian
31:13
Speaker 2: said we're not seeing the Solai, so we're not going
31:15
Speaker 2: to act. And my approach was try to be pragmatic
31:19
Speaker 2: and said, the moment you have microphones on you and cameras,
31:21
Speaker 2: you're going to start to act. And I don't want
31:23
Speaker 2: my engineers to act for some cameras, so we said
31:27
Speaker 2: we're not doing it. But that was a blessing in
31:30
Speaker 2: disguise because as we were not playing as the main protagonists,
31:34
Speaker 2: Netflix was showing smaller teams, was showing drivers that weren't
31:38
Speaker 2: competing for racemans or podiums, and that in itself created
31:43
Speaker 2: the interest from our fans for the spot. So you two,
31:48
Speaker 2: we joined, and from then on it's been it's been
31:51
Speaker 2: a blast. They're doing a fantastic job the impossible task
31:55
Speaker 2: of showing is sport, a real sport and honest sport,
32:00
Speaker 2: and on the other side trying to make it spectacular
32:03
Speaker 2: and exciting and drama and glory. But it's been a
32:06
Speaker 2: great success for Netflix and Formula one overall.
32:08
Speaker 1: So it's obviously brought a ton of new fans, and
32:11
Speaker 1: not just overseas, but especially here in the United States,
32:15
Speaker 1: and now there are multiple races that take place here
32:17
Speaker 1: each year. How has the Netflix documentary expanded the audience
32:24
Speaker 1: and expanded where you guys actually run races.
32:27
Speaker 2: I think there were a few pillars that came together
32:31
Speaker 2: for it to be so Formula one to be so successful.
32:34
Speaker 2: We were the first spot to actually race in twenty twenty.
32:37
Speaker 2: We had a very discipline and strangent COVID protocol. People
32:42
Speaker 2: were at home. Netflix was showing our series and the
32:46
Speaker 2: racing was excited, exciting the first up Hamilton, Saga, the
32:51
Speaker 2: Grand Prix that you mentioned, twenty one, Abu Dhabi, many
32:55
Speaker 2: young drivers being avid social media protagonists, and all of
33:00
Speaker 2: that contributed to a boom of Former One in the
33:03
Speaker 2: United States. We've always been in Austin. It's a fantastic place,
33:08
Speaker 2: and last year was the single biggest event in the
33:11
Speaker 2: United States to my knowledge, with four hundred and forty
33:14
Speaker 2: thousand people. And since then Miami has joined, in Las
33:17
Speaker 2: Vegas has joined, and Formula one has been booming in
33:20
Speaker 2: the United States in that affluent demographic. Our strongest growing
33:26
Speaker 2: group is the young females fifteen to thirty five, believe
33:29
Speaker 2: it or not, and that shows how you know, all
33:31
Speaker 2: the things have come together and we are on a
33:35
Speaker 2: successful path. But you've got to be wary. We know
33:38
Speaker 2: that we are in the entertainment industry. We need to
33:40
Speaker 2: provide a product that is exciting and if we fail
33:43
Speaker 2: to do so, we could as well hit some stumbling blocks.
33:46
Speaker 1: So you do a pretty good job at not only
33:50
Speaker 1: maintaining your emotions but not revealing a lot. I kind
33:55
Speaker 1: of got the sense in the beginning of the first
33:57
Speaker 1: season that you participated in I was like, all right,
34:01
Speaker 1: this is an annoyance, but I'll play it. Seems like
34:04
Speaker 1: over the past few seasons you've kind of learned to
34:07
Speaker 1: enjoy yourself more on camera, and sometimes it feels like
34:12
Speaker 1: you're just throwing out these little bombs and leaving them there.
34:16
Speaker 1: For some of your competitors, especially at Red Bill, you
34:19
Speaker 1: seem to like to get under other people's skin in
34:23
Speaker 1: a very subtle way. How much fun has the entire
34:27
Speaker 1: Netflix Drive to Survive experience been for you?
34:30
Speaker 2: At the beginning, most of the teams gave Netflix a
34:35
Speaker 2: full access to the premises and to the team members.
34:38
Speaker 1: And by the way, you could do that if you're
34:40
Speaker 1: the back of the pack, right, you have too much
34:43
Speaker 1: stuff that you don't want anybody else to see.
34:45
Speaker 2: Yeah, but even front running teams failed. They needed to
34:48
Speaker 2: be left and sent into the camera, and that's not
34:51
Speaker 2: something we wanted to be, so we gave we immersed
34:54
Speaker 2: them fully for our race to season, and funnily enough,
34:57
Speaker 2: these were always our worst performances, but not Netflix's fault.
35:02
Speaker 2: And over time you just you just realize that you
35:04
Speaker 2: embed those people into the team. We put them in
35:07
Speaker 2: team cloth so they weren't looking like aliens in the garage.
35:11
Speaker 2: And since then they have just been part of our
35:15
Speaker 2: of our of our sport. And they've always been very
35:18
Speaker 2: fair when it comes about, you know, cutting out stuff
35:22
Speaker 2: that it was not appropriate or that wasn't right to say.
35:27
Speaker 2: And it's been a great, great relationship. And some of
35:29
Speaker 2: our you know, some of my colleagues, they they're just
35:32
Speaker 2: keen and being a little bit more on Telly. I'm
35:35
Speaker 2: trying to stay authentic to who I am. Sometimes that
35:38
Speaker 2: you know, makes me shine in a not so good light.
35:40
Speaker 2: I'm not proud for some of the moments that were
35:42
Speaker 2: captured on the other side. I want to just continue
35:45
Speaker 2: to to be like I am and not act. I'm
35:47
Speaker 2: not good at acting.
35:48
Speaker 1: That's very fair. Let's talk a little bit about what's
35:51
Speaker 1: going on in F one today. It's pretty clear that
35:55
Speaker 1: over the long haul, no single team has produced the
35:59
Speaker 1: best car. Year after year, you could have a run,
36:02
Speaker 1: but eventually the platform changes, the rules change. It's sort
36:06
Speaker 1: of cyclical. Just how challenging is the F one engineering.
36:12
Speaker 1: It seems like it's at an incredibly high level.
36:16
Speaker 2: Formula one has always been at the pinnacle of racing
36:19
Speaker 2: and high tech. We're an organization of two and a
36:22
Speaker 2: half thousand people, half of them on the engine, the
36:24
Speaker 2: other half on the chassis, and it's science. We're trying
36:28
Speaker 2: to utilize the best infrastructure that there exists today, things
36:34
Speaker 2: that are starting to really kick off on AI and
36:37
Speaker 2: as an example, we operate wind tunnels and computational fluid
36:42
Speaker 2: dynamic technologies, etc. Etc. And in that respect, it is
36:47
Speaker 2: a huge, huge engineering challenge. But you know, having the
36:51
Speaker 2: best people and the best infrastructure is still no guarantee
36:54
Speaker 2: for success, as it's been shown in our performance. At
36:57
Speaker 2: the moment, rules change and Formula one and rules change
37:01
Speaker 2: to have balance performances out and twice these changes were
37:06
Speaker 2: thrown at us and we came out on top. And
37:08
Speaker 2: this last time with ground effect cars, we were caught
37:10
Speaker 2: out and we were not among the winning teams.
37:13
Speaker 1: So let's talk a little bit about some of those
37:15
Speaker 1: rule changes, including rules that don't really seem to be enforced. First,
37:20
Speaker 1: what's your most and least favored rule change of the
37:24
Speaker 1: past few years.
37:26
Speaker 2: Well, obviously have a certain bias, so if I look
37:28
Speaker 2: from the team's perspective. Ground effect cars caused a lot
37:32
Speaker 2: of problems because the lower you're round to the ground,
37:34
Speaker 2: the faster you are. That smashed the flaws up. And
37:37
Speaker 2: we were really not great at finding the best compromise here.
37:42
Speaker 2: But you know, the rules are the rules. You need
37:45
Speaker 2: to be trying to be the best and it's the
37:47
Speaker 2: same conditions for everyone as long as everyone plays by
37:50
Speaker 2: the rule book. And that's the tricky bit.
37:53
Speaker 1: So let's talk about that. What rule do you think
37:56
Speaker 1: should be more strictly enforced? And they kind of softly enforced,
38:02
Speaker 1: Like what are we not being strict about that we
38:04
Speaker 1: should be.
38:06
Speaker 2: I think the FAA, which the governing body, is trying
38:08
Speaker 2: to be compliant and to enforce regulations, but sometimes you know,
38:14
Speaker 2: they are facing a group of many thousands of engineers
38:16
Speaker 2: on the team sides and they are maybe twenty so
38:19
Speaker 2: they are always on the back foot trying to keep
38:22
Speaker 2: the spot under control and that's not an easy task.
38:25
Speaker 1: What's your take on the budget cap that's now imposed
38:27
Speaker 1: on F one teams. When they did this in the
38:30
Speaker 1: National Football League here, it was to create a level
38:33
Speaker 1: playing field so all teams could be competitive. What are
38:38
Speaker 1: you seeing with this cap, how is it affecting the
38:41
Speaker 1: way you guys hire and engineer the cars.
38:45
Speaker 2: Well, the cost cap was implemented by Chase Carey, who
38:48
Speaker 2: knew everything about media and football in the United States,
38:52
Speaker 2: and he said, I'm gonna I need to protect you
38:54
Speaker 2: from yourselves because Red Bull, Ferrari and Mercedes were outspending
38:58
Speaker 2: each other to have the best talent and best technologies,
39:02
Speaker 2: and therefore we were always going. We were going faster
39:05
Speaker 2: than many of the small teams. And he came in
39:08
Speaker 2: with that. I was against obviously because we had the resource,
39:11
Speaker 2: but he came in and our business models have changed
39:14
Speaker 2: since then. We have profitable entities and not just the
39:17
Speaker 2: marketing activity. And you can see this today there's four
39:20
Speaker 2: teamstead of I think for for race victory. So he
39:23
Speaker 2: was right.
39:24
Speaker 1: Where does the budget cap show its biggest effect? Is
39:27
Speaker 1: it in the top speed of the cars? Is it
39:31
Speaker 1: the handler in the cars? Is it the driver selection?
39:34
Speaker 1: Where do you see the biggest impact of that that cap?
39:37
Speaker 2: Well, drivers for example, are still excluded, which is something
39:40
Speaker 2: we are looking at for the future, and certain marketing costs.
39:43
Speaker 2: But as a matter of fact, everybody spends the same
39:46
Speaker 2: amount of money to date, it's about one hundred and
39:49
Speaker 2: six and sixty five million dollars a year on engineering.
39:53
Speaker 1: And that's a big number.
39:54
Speaker 2: That's still a very big number, But we spent double
39:57
Speaker 2: before that. So how should a small team like has
40:01
Speaker 2: compete with a Mecedes juggernaut that's spending double the money
40:04
Speaker 2: on engineering today it's the same. Obviously, that catch up
40:07
Speaker 2: phase is going to take longer because we have infrastructure
40:09
Speaker 2: that's been created since a long time. We spend a
40:11
Speaker 2: billion in our sides I guess in the last ten years,
40:14
Speaker 2: but over time that's going to level out. And that's
40:16
Speaker 2: why it was the right decision.
40:18
Speaker 1: So let's talk about some other teams. First of all,
40:21
Speaker 1: what do you think about Andretti? Should he be allowed
40:24
Speaker 1: to join? Should there be another team in Formula one?
40:28
Speaker 2: First of all, the teams have no say in this.
40:30
Speaker 2: It's the governing body and the commercial rights holder. My
40:34
Speaker 2: personal opinion is that if a team wants to enter
40:36
Speaker 2: Formula one, it should be carefully evaluated like it's being
40:39
Speaker 2: done in the US, like the NFL decides who is joining,
40:43
Speaker 2: and for us, it's a very easy exercise. If a
40:47
Speaker 2: team can contribute to the formula success, Formula one success
40:51
Speaker 2: by increasing its audiences, marketing power, etc. Then it's a
40:58
Speaker 2: logic consequence that as a team we would be for it.
41:03
Speaker 2: But then of course we have no vote, which just
41:04
Speaker 2: can we just give our opinion? And I think this
41:06
Speaker 2: is the exercise that formula one and the governing body
41:09
Speaker 2: you need to evaluate who is providing a real usb
41:14
Speaker 2: and providing a contribution to the spot that makes it
41:18
Speaker 2: grow beyond the current CP.
41:21
Speaker 1: Right. So in the US, when we expanded baseball and
41:24
Speaker 1: we expanded football, there was a little dilution of talent.
41:28
Speaker 1: You had a little you had fewer Juggernauts, although arguably
41:34
Speaker 1: Tom Brady and the New England Patriots ran the table
41:37
Speaker 1: for quite a while. Is that a risk if we
41:41
Speaker 1: add more teams or there's plenty of talent to go around.
41:45
Speaker 2: I think you need to embrace all competition. We are
41:49
Speaker 2: there to fight against the other teams, and whoever's not
41:53
Speaker 2: doing a better job this deserves to win. So that
41:56
Speaker 2: is not at all a limiting factor. I think the
42:00
Speaker 2: US leagues have done it. It needs to be carefully
42:03
Speaker 2: evaluated what the benefit is of increasing of increasing the
42:07
Speaker 2: amount of teams joining for the incumbents and also for
42:12
Speaker 2: a new team and the sport overall.
42:14
Speaker 1: So let's talk about drivers Lewis Hamilton, Max Rostab and
42:18
Speaker 1: the previous generation Michael Schumacher. How do you rate these
42:24
Speaker 1: top Formula one racers.
42:27
Speaker 2: Each of them was the predominant driver in the areas eras.
42:35
Speaker 2: Each of these drivers have been the predominant drivers of
42:38
Speaker 2: the of their era. And it's very difficult to compare
42:43
Speaker 2: Fangio to Moss, to Senna to Schumacher and Lewis Hamilton
42:50
Speaker 2: for stubm now because they're all different and we wouldn't
42:55
Speaker 2: do them justice by doing such a simple comparison. But
42:58
Speaker 2: if you look at the pure numbers today, Lewis has
43:02
Speaker 2: scored the most victories, the most boy positions in his
43:05
Speaker 2: unequal power with Michael Schumacher in terms of titles, maybe
43:08
Speaker 2: he should have could have one more in twenty twenty one.
43:13
Speaker 2: So that's the fact of the methom huh.
43:17
Speaker 1: Really interesting. So here's what I'm going to do. I'm
43:20
Speaker 1: going to ask my curveball question, and then I have
43:23
Speaker 1: a whole bunch of technical questions. You had this fascinating
43:28
Speaker 1: quote in a voting international which I thought was really
43:32
Speaker 1: really interesting quote. I think in life you must have
43:35
Speaker 1: three motivations, somebody to love, something to do, and something
43:41
Speaker 1: to dream of. Explain that that's not exactly what I
43:44
Speaker 1: think of when I think of a Formula one principle.
43:49
Speaker 2: I think I had some tough moments in my life.
43:50
Speaker 2: My upbringing wasn't easy. My father died very young, we
43:54
Speaker 2: literally had no money, and over the course of time,
43:57
Speaker 2: mental healths has been something that I have struggled with
44:01
Speaker 2: at times. And so I came to the realization, after
44:05
Speaker 2: you know, becoming older, what is it really that makes
44:10
Speaker 2: us happy, that makes us strive? And these three things
44:15
Speaker 2: kind of summarize it for me. When you are running
44:20
Speaker 2: out of dreams or when you're running out of activity,
44:25
Speaker 2: and if you can't have someone to share it with,
44:28
Speaker 2: then for me, there is such a big gap that
44:32
Speaker 2: exists in your life that I would you know, but
44:36
Speaker 2: that's maybe just my personal view.
44:38
Speaker 1: Well, that's very philosophical. It's not what we typically think
44:41
Speaker 1: of when we think of competitive sports. It's thoughtful and introspective,
44:47
Speaker 1: and it just stood out to me, is not what
44:50
Speaker 1: I would have expected from you.
44:53
Speaker 2: I deal with people, you know, this is all about
44:55
Speaker 2: humans being on a journey in the team, trying to
44:59
Speaker 2: be successful, and if you are, you know, more vulnerable
45:05
Speaker 2: in terms of your feelings, you introspect more. That's happened,
45:08
Speaker 2: That's happening to me all the time. So I think,
45:12
Speaker 2: you know, we are more visible leaders in organizations. We
45:17
Speaker 2: should be. We should be speaking more about mental healths
45:21
Speaker 2: rather than appearing like the unbreakable, unbreakable individuals that have
45:28
Speaker 2: never weak moments.
45:30
Speaker 1: So let's spend some time talking about getting a little technical,
45:35
Speaker 1: talking about some F one issues that I think are
45:38
Speaker 1: really fascinating. So it seems like a lot of the
45:43
Speaker 1: head to head racing takes place in the middle of
45:47
Speaker 1: the field, not the front of the field. What do
45:49
Speaker 1: you think about some of the proposals and some of
45:51
Speaker 1: the ideas to make that head to head passing in
45:56
Speaker 1: the front of the field. How are the rules being
45:59
Speaker 1: considered so that you just don't I'm Monaco is a
46:03
Speaker 1: special case, but it seems like in some races it's
46:06
Speaker 1: much harder if you have two people neck and neck
46:09
Speaker 1: for the number two car at the front of the
46:13
Speaker 1: front of the grid to pass the number one car.
46:15
Speaker 2: I think there's two reasons. It's very track specific. Many tracks,
46:19
Speaker 2: even with close performances, you can overtake. Long straights are
46:24
Speaker 2: important factor because the aerodynamic efficiencies of those cars are
46:28
Speaker 2: so good that it's difficult to get out of the
46:31
Speaker 2: slipstream because there isn't anyone any slipstream anymore. The other
46:35
Speaker 2: thing is that the competition is to close. Sometimes you
46:37
Speaker 2: have a second between P one and P fifteen and they.
46:40
Speaker 1: Are for four second. Wow, that's amazing, that's amazing.
46:42
Speaker 2: We have top eight cars sometimes separated within three or
46:45
Speaker 2: four tenths, and that's why there is no car ever
46:49
Speaker 2: to be so much faster. So it only works with
46:51
Speaker 2: strategy and entire degradation. But this season has been pretty
46:54
Speaker 2: successful in terms of overtakes and excitement.
46:57
Speaker 1: So there was a comment from Benito that making AUDI
47:02
Speaker 1: successful will be like climbing Everest. What are your thoughts
47:06
Speaker 1: on that.
47:08
Speaker 2: I think that's a pretty good analogy. Formula one is
47:12
Speaker 2: a very high entry barrier spot. But if somebody can
47:17
Speaker 2: do it, then an organization like AUDI. I mean, they
47:19
Speaker 2: have been very successful in motor racing in general. The
47:24
Speaker 2: Alemant program was the best ever, and they have the
47:29
Speaker 2: capability and they will attract the people to make it
47:33
Speaker 2: a success. But one thing that I've learned in Formula one.
47:37
Speaker 2: You need time and I hope that as an OEM,
47:40
Speaker 2: they are capable of giving the project enough time, like
47:43
Speaker 2: Mercedes has given us enough time to become successful.
47:46
Speaker 1: Let's talk about gearbox and transmission development. Are we at
47:50
Speaker 1: peak gear changing? Is there more performance to be run
47:54
Speaker 1: out of that?
47:54
Speaker 2: Now we're getting very specific. Yeah, the gearboxes today a
47:59
Speaker 2: fully thematic, seamless shift gearboxes and it doesn't go you know,
48:04
Speaker 2: there's no talk break anymore.
48:07
Speaker 1: It's literally instant like there's just a millisecond between gears.
48:12
Speaker 2: You wouldn't even feel it, which is which is amazing technology.
48:16
Speaker 2: So that is pretty managed, you know, to the max
48:21
Speaker 2: of what it can be. And in power units in
48:24
Speaker 2: twenty twenty six, we're becoming sustainable engines, still highly efficient,
48:29
Speaker 2: highly powerful, fifty percent combustion, fifty percent electric, but with
48:32
Speaker 2: one hundred percent waste based biofueld. And this is where
48:35
Speaker 2: the world is going zero carbon carbon emission reduced to
48:39
Speaker 2: zero because it stays in the cycle. So I think
48:43
Speaker 2: we are rolled. We need to be role models in
48:45
Speaker 2: the auto industry. We need to be innovative. Ev hasn't
48:49
Speaker 2: been as the implementation of electric vehicles hasn't been as
48:55
Speaker 2: quick as we all thought, and therefore fueling the best
48:59
Speaker 2: engines in the world in the quickest cars in the
49:01
Speaker 2: world with a biofuel, I think is a good way
49:04
Speaker 2: of participating in the energy transition.
49:08
Speaker 1: So you guys have done a lot of work both
49:12
Speaker 1: modeling and using AI for wind resistance and the dynamics
49:20
Speaker 1: of the car in wind tunnels and how it's going
49:23
Speaker 1: to react. It seems like that is the most challenging
49:27
Speaker 1: aspect to take from the computer to the track. Is
49:32
Speaker 1: there some sort of a formula where you're testing something,
49:35
Speaker 1: How do you decide this is go or no go?
49:37
Speaker 1: When it comes to actually implementing all of the aerodynamics
49:42
Speaker 1: to the actual.
49:43
Speaker 2: Car, there's lots of science behind it. And it's not
49:46
Speaker 2: only wind tunnels because that is pretty old technology, but
49:50
Speaker 2: there's simulations, simulations, tool driver and the loop simulators CFD
49:56
Speaker 2: and lots of other highly sophisticated development capability. But correlation
50:01
Speaker 2: to the track is then another is then another topic.
50:05
Speaker 2: First of all, you have a driver in the car,
50:07
Speaker 2: the human being you could say, the engine is called
50:10
Speaker 2: it the weakness between the steering wheel and the engine
50:12
Speaker 2: good and bad days. How do you put that into data?
50:17
Speaker 2: So correlating that is today the crux of the matter.
50:22
Speaker 2: And that's something that all the teams struggle, that their
50:28
Speaker 2: simulations are telling them one thing, but the drivers are
50:31
Speaker 2: telling them something else.
50:32
Speaker 1: It seems more art than science.
50:35
Speaker 2: I know, I fundamentally believe, and we in the team
50:38
Speaker 2: do that it is science and it must stay science.
50:43
Speaker 2: But we haven't with this current ground effect cars all
50:46
Speaker 2: of us figured out why sometimes it doesn't correlate with
50:50
Speaker 2: the virtual world.
50:52
Speaker 1: It's a model. What's the old line from Professor George
50:56
Speaker 1: Box All models are wrong, but some are useful. Is
51:00
Speaker 1: that how the ground effects end up working out in
51:02
Speaker 1: the real world.
51:03
Speaker 2: I I didn't hear that sentence, but it pretty much
51:05
Speaker 2: sums up where we are today.
51:07
Speaker 1: Yeah, a famous quote about economic modeling. All models are wrong,
51:11
Speaker 1: but some are useful. It very much works out. Let
51:14
Speaker 1: me jump to my favorite questions that I asked all
51:17
Speaker 1: of my guests, starting with besides Drive to Survive, what
51:22
Speaker 1: else do you watch on Netflix? What keeps you entertained?
51:26
Speaker 2: Well? I was never kind of a TV person so much.
51:30
Speaker 2: I preferred to read, do some sports, but most recently
51:37
Speaker 2: there's more and more interesting streaming series coming out. I
51:43
Speaker 2: like sports documentaries. The last one that I enjoyed was printers.
51:49
Speaker 2: That was different sports that I didn't that I didn't
51:52
Speaker 2: know a lot about. Still about speed, Still about speed.
51:56
Speaker 2: I like to Tour de France, the documentary, So that's
51:59
Speaker 2: more the kind of spectrum that I like to watch.
52:03
Speaker 1: Let's talk about mentors who helped shape your career, who
52:09
Speaker 1: helped put you on the path that you've been on.
52:13
Speaker 2: When I was eight years old, my dad got very
52:16
Speaker 2: ill and died a few years later, and my mother
52:19
Speaker 2: could barely make our living. I was responsible for myself
52:22
Speaker 2: and my sister, and that very much carved my personality.
52:29
Speaker 2: There was no mentor I was. I had the responsibility
52:34
Speaker 2: and accountability since my early years, and that's who I am.
52:39
Speaker 1: Our final two questions. Someone's interested in a career in racing,
52:44
Speaker 1: in Formula one in high performance engineering, what sort of
52:48
Speaker 1: advice would you give them?
52:50
Speaker 2: My advice to someone would be like, if you're able
52:54
Speaker 2: at an early age to find out what you enjoy doing,
52:57
Speaker 2: and that may change. I think by the way, young
52:59
Speaker 2: people much too under pressure to find the so called
53:02
Speaker 2: passion at the age of twenty two, which is nonsense.
53:04
Speaker 2: Give them, give them time to be all around us
53:07
Speaker 2: and then in the late twenties to find out what
53:10
Speaker 2: they want to specialize in. But you can become all
53:15
Speaker 2: you want if motor racing or engineering or driving is
53:19
Speaker 2: what you think you're good at, and then give it
53:22
Speaker 2: all you have and you will be eventually successful.
53:25
Speaker 1: And our final question, what do you know about the
53:27
Speaker 1: world of Formula one racing today that you wish you
53:31
Speaker 1: knew when you first started out with the Williams team?
53:35
Speaker 2: All of it? I mean literally, when I started, I
53:38
Speaker 2: didn't understand many fundamental topics in Formula one. But it's
53:43
Speaker 2: part of the trajectory. You've got to learn it the
53:45
Speaker 2: hard way, sometimes by doing it by failing. So that's
53:49
Speaker 2: all you know was all important.
53:52
Speaker 1: Thank you Toto for being so generous with your time.
53:55
Speaker 1: We have been speaking with Toto Wolf. He is the
53:59
Speaker 1: principal and CEO of Mercedes F one team. If you
54:03
Speaker 1: enjoy this conversation, well, be sure and check out all
54:06
Speaker 1: of the previous five hundred or so we've done over
54:10
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54:15
Speaker 1: wherever you find your favorite podcasts. And be sure and
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Speaker 1: check out my new short form podcast at the Money
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54:35
Speaker 1: I would be remiss if I do not thank our
54:36
Speaker 1: crack team that helps put these conversations together each week.
54:40
Speaker 1: Steve Gonzalez is my audio engineer. Anna Luke is my producer.
54:45
Speaker 1: Sean Russo is my head of research. Sage Bauman is
54:48
Speaker 1: the head of all podcasts here at Bloomberg. I'm Barry Rihelts.
54:53
Speaker 1: You've been listening to Masters in Business on Bloomberg Radio