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

0:02
Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
0:09
Speaker 2: This is Master's in Business with Barry Ridholds on Bloomberg Radio.
0:16
Speaker 1: What can I say about this week's guest, Toto Wolf,
0:19
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
0:41
Speaker 1: surprisingly began to win, got recruited over to Mercedes, where
0:45
Speaker 1: he is put together a fantastic track record. His rookie
0:50
Speaker 1: year at Mercedes was the same rookie year for Lewis Hamilton.
0:54
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 the 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
1:08
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
1:30
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.
1:37
Speaker 2: Dropout, dropout. Yeah, so yeah, I was born and raised
1:42
Speaker 2: in Vienna and went to the Vienna US 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 Informala WAE, I lost a sponsor.
2:01
Speaker 2: I decided I'm going to quit both. I'm gonna quit
2:04
Speaker 2: UNI and I'm going to quit racing and launch myself
2:06
Speaker 2: into working.
2:07
Speaker 1: And you were fairly successful as a race so you
2:10
Speaker 1: began in Austrian Formula Ford. You won the twenty four
2:13
Speaker 1: hours of Bahrain, which is an unusually any twenty four
2:17
Speaker 1: hour races difficult. How do you what's the key to
2:20
Speaker 1: winning twenty four hours of driving?
2:23
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
2:28
Speaker 2: the first big race 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
2:35
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 night. But it was all
2:43
Speaker 2: part of my racing and I loved every minute.
2:45
Speaker 1: So you go from racing to saying, all right, I
2:48
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 that
3:08
Speaker 2: felt the easiest. So back in the day you wouldn't
3:11
Speaker 2: think a lot about brand. And I went to the
3:15
Speaker 2: US for a couple of months and realized that internet
3:19
Speaker 2: companies were coming up here Yahoo, America Online and Netscape
3:23
Speaker 2: and went back to Austria and figured out who is
3:27
Speaker 2: doing that in Austria and stumbled up upon a few
3:31
Speaker 2: websites and met these people, sometimes not even companies. One
3:37
Speaker 2: was a seventeen year old board that round the largest
3:41
Speaker 2: free SMS platform online and set up structures 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 meture 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
4:28
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 formal one team
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Speaker 2: I got myself into, had a minority stake, and then
4:51
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.
5:04
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
5:13
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 hard
5:34
Speaker 2: and soul and I think we moved, We moved barriers,
5:38
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.
5:45
Speaker 1: So you're involved in an initial public offering for hwa AG,
5:51
Speaker 1: the company behind Mercedes Racing. Tell us a little bit
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Speaker 1: about that IPO and that lead to your 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 work,
6:21
Speaker 2: and you want to stay argile as a corporate to
6:23
Speaker 2: say well we're in the spot or we're out without
6:26
Speaker 2: having too much overhead and headache. So that was spun
6:28
Speaker 2: out and it was a really good high tech company.
6:31
Speaker 2: They built engines for Formula three, 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: founder of MG, and we iPod it and sold it
6:53
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.
7:11
Speaker 2: So it was multi faceted because we had this company
7:17
Speaker 2: where we were basically doing all the work for Mercedes
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Speaker 2: Racing outside of Formula on. 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
7:34
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
7:38
Speaker 2: underfunded back market team and you're beating us on track,
7:42
Speaker 2: and 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, we
7:49
Speaker 2: would like to offer you to run this as a
7:52
Speaker 2: head of Mercedes.
7:52
Speaker 1: Multiple was that a surprise? Was this? Like, very did
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Speaker 1: you have any during that conversation? Hey, why is a
7:59
Speaker 1: wealth funded big team asking me how we beat them?
8:02
Speaker 1: It sort of seems like an unusual situation, especially how
8:06
Speaker 1: competitive everybody seems to be in the paddocks.
8:09
Speaker 2: I think the board realized that that stage that it
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'd be 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.
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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
9:30
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 core expertise of Mercedes obviously,
9:40
Speaker 2: and then we had this run of eight consecutive World.
9:43
Speaker 1: Championships, unprecedented run. We've never seen anything like that, even
9:47
Speaker 1: in the Schumacher era. I don't think he won eight
9:50
Speaker 1: consecutive championships. I have to ask an obvious question. You're
9:57
Speaker 1: in venture capital investing, you're in race saying, what similarities
10:02
Speaker 1: do you find between the two fields. You're dealing with
10:05
Speaker 1: a lot of data, you're dealing with a lot of unknowns.
10:08
Speaker 1: Did your background and venture investing help you put together
10:12
Speaker 1: the 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 informula one. When you talk about a company or
10:26
Speaker 2: a team, what is that? And it's basically a bunch
10:30
Speaker 2: of people that on this professional journey together. So around
10:35
Speaker 2: people that run racing cars. And I did the same
10:37
Speaker 2: when I was a venture capital invest stock. I tried
10:40
Speaker 2: to hire and develop the best people to run a
10:43
Speaker 2: 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?
10:56
Speaker 2: Yeah? Exactly. When they offered me to run and 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 dabis An Fund, and then Nick
11:10
Speaker 2: Lauda 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.
11:36
Speaker 2: I mean, I couldn't wish for a better shareholding group
11:38
Speaker 2: because with the Naos we got a tremendous powerhouse behind us,
11:43
Speaker 2: a very financially profitable organization. Obviously this chemicals business and
11:49
Speaker 2: that 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 ours 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 Ceola Calaneus,
12:25
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
13:29
Speaker 2: losing against another team, it's losing against ourselves. And the activities,
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Speaker 2: like you mentioned, is a fight against myself. How far
13:36
Speaker 2: can I push myself? And I love free diving. It
13:38
Speaker 2: has a meditative component for me and that I like,
13:42
Speaker 2: I like the water, and you achieving certain depth is
13:47
Speaker 2: expectations that are set myself and I don't need to
13:50
Speaker 2: have anybody 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 it.
14:15
Speaker 2: Some are 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.
14:32
Speaker 1: So we talked earlier your rookie years with Lewis Hamilton.
14:37
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 they used to clean the ball
16:49
Speaker 1: and people thought you were a little obsessive compulsive about it. Hey,
16:53
Speaker 1: why is Toto so nuts about the bathroom? But it
16:56
Speaker 1: turns out your team gets ill last day stuff for
16:59
Speaker 1: stomach viruses, lasses just there was a uptick in the
17:05
Speaker 1: overall health of everybody in the organization once you implemented that.
17:10
Speaker 1: What detail is too small for you 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
17:38
Speaker 2: Guychross 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 for
17:55
Speaker 2: NFONT team is not the standard, and what is the rest?
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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 hand sanitizers that were drilled into the walls of
18:17
Speaker 2: the races where we were going, we had a hygiene
18:19
Speaker 2: manager 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 or what I would
18:43
Speaker 2: think it should be done. And yeah, it's maybe one
18:46
Speaker 2: example of many others.
18:48
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 we not along those lines, because
19:58
Speaker 2: it means you're not made. You 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, somebody doubles your
21:09
Speaker 2: salary and another team. You have to have the responsibility
21:12
Speaker 2: towards your family to consider that such moves, and that's
21:15
Speaker 2: why it's the normal lab and flow with people coming
21:19
Speaker 2: and people leaving. But you want to stay with that
21:22
Speaker 2: core team that your team as being essential for 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 result.
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 in twenty years and saying we had those
23:27
Speaker 2: eight consecutive wild 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 fourth, 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 Kimmy 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
24:17
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 Naili to the team
24:25
Speaker 2: and not lose him like we did with a Stub
24:28
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
24:38
Speaker 2: a Mescedes 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 drive and
24:59
Speaker 2: the team at that stay. I'm happy about it.
25:01
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 Grumpri
25:19
Speaker 2: in his final year with Mercedes against all odds, we
25:23
Speaker 2: couldn't 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.
26:04
Speaker 1: Well secrets here.
26:05
Speaker 2: No, he knows that something is coming, but he doesn't
26:08
Speaker 2: know what it is. And I'm very much looking forward
26:11
Speaker 2: to that emotion, which is to this moment that's clearly
26:13
Speaker 2: going 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, I.
26:42
Speaker 2: Think without wanting to be disrespectful. It's different if you're
26:45
Speaker 2: running an organization as an employee that has a certain
26:48
Speaker 2: shailed life and needs to perform in order to stay
26:51
Speaker 2: in the job, or my situation as a shareholder being
26:56
Speaker 2: able to look at the long term if you're if
26:59
Speaker 2: you know that, you know I know if I'm not
27:01
Speaker 2: in principle, I'm going to be on the board or
27:03
Speaker 2: cham and still responsible for the overall company. So I
27:08
Speaker 2: kind of get that that other people need to have
27:11
Speaker 2: more short term perspectives. It's their livelihoods and their professional career.
27:15
Speaker 2: And on the one side, I can look further down
27:18
Speaker 2: into the future, but that shouldn't be an excuse of
27:22
Speaker 2: 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
27:48
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 with our scouts that are on the most junior
28:00
Speaker 2: of international count races, that are looking at those kids.
28:03
Speaker 2: And we're not the only ones for ours 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
28:16
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: and if I remember correctly, and then made a commitment
29:03
Speaker 1: to Hey, the minorities are very underrepresented in F one.
29:07
Speaker 1: How can we expand this? How has that process gone
29:11
Speaker 1: and how successful have you been?
29:13
Speaker 2: I think long before Black Lives Matter, as a team,
29:18
Speaker 2: we have always strived to be diverse. It was part
29:21
Speaker 2: of my upbringing that I saw what it means to
29:25
Speaker 2: be discriminated. Anti Semitism was a strong topic in my
29:32
Speaker 2: upbringing in Vienna, and so that is always how we
29:36
Speaker 2: have been calibrated. And then when obviously Lewis was pushing
29:39
Speaker 2: very hard for more diversity in our population in the team,
29:44
Speaker 2: and we embraced that from the beginning. And then Black
29:47
Speaker 2: Lives Matter started with you know, obviously the things that
29:51
Speaker 2: happened in the in the US, and he said, shouldn't
29:54
Speaker 2: we do you think we should paint the cow black?
29:56
Speaker 2: Which is a highly unusual question because the silver arrows
30:00
Speaker 2: very much. How the mercedeses are being called in the
30:03
Speaker 2: 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 Mescedes 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 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'll not see the soley, 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 race wins or podiums, and that in itself
31:42
Speaker 2: created the interest from our fans for the spot. So
31:47
Speaker 2: you two, we joined, and from then on it's been
31:51
Speaker 2: it's been a blast. They're doing a fantastic job the
31:54
Speaker 2: impossible task of showing is sport a real sport and
31:59
Speaker 2: honest sport, and on the other side trying to make
32:02
Speaker 2: it spectacular and exciting and drama and glory. But it's
32:05
Speaker 2: been a 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
32:43
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 Formula 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're in the entertainment industry. We need to provide
33:40
Speaker 2: a product that is exciting, and if we fail to
33:43
Speaker 2: 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
34:16
Speaker 1: there for some of your competitors, especially at Redbill, 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?
34:31
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 many,
34:42
Speaker 1: too much 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 in Netflix's
35:01
Speaker 2: fault and over time, you just you just realize that
35:04
Speaker 2: you embed those people into the team. We put them
35:07
Speaker 2: in team clothes so they weren't looking like aliens in
35:10
Speaker 2: the garage. And since then they have just been part
35:14
Speaker 2: of our of our of our sport. And they've always
35:18
Speaker 2: been very fair when it comes about, you know, cutting
35:21
Speaker 2: out stuff that it was not appropriate or that wasn't
35:25
Speaker 2: right to say. And it's been a great, great relationship.
35:28
Speaker 2: And some of our you know, some of my colleagues,
35:31
Speaker 2: they they're just keen and being a little bit more
35:33
Speaker 2: on Telly trying to stay authentic to who I am.
35:37
Speaker 2: Sometimes that you know, makes me shine in a not
35:40
Speaker 2: so good light. I'm not proud for some of the
35:41
Speaker 2: moments that were captured on the other side. I want
35:44
Speaker 2: to just continue to to be like I am and
35:46
Speaker 2: not act. I'm not good at act.
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 an 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
36:52
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
36:58
Speaker 2: the moment. Rules change in 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
37:11
Speaker 2: out and we were not among the you know, 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 I have a certain bias, so if I
37:28
Speaker 2: look from the team's perspective, ground effect cars caused a
37:32
Speaker 2: lot 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
37:48
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're always on the back foot trying to keep the
38:22
Speaker 2: 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 we 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 handle and 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: sixty and sixty five million dollars a year on engineering,
39:53
Speaker 2: and that's a big number. That's still a very big number,
39:56
Speaker 2: But we spent double before that. So how should a
39:58
Speaker 2: small team like has compete with a Mecedes juggernaut that's
40:03
Speaker 2: spending double the money on engineering today it's the same. Obviously,
40:06
Speaker 2: that catch up phase is going to take longer because
40:08
Speaker 2: we have infrastructure that's been created since a long time.
40:11
Speaker 2: We spend a billion in our sides I guess in
40:13
Speaker 2: the last ten years, but over time that's going to
40:16
Speaker 2: level out. And that's 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 been
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
40:52
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
41:07
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 curve.
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
41:42
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
41:50
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, like
42:00
Speaker 2: the US leagues have done it, it needs to be
42:02
Speaker 2: carefully evaluated what the benefit is of increasing of increasing
42:07
Speaker 2: the amount of teams joining for the incumbents and also
42:11
Speaker 2: for 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: their era. And it's very difficult to compare Fangio to Moss,
42:45
Speaker 2: to Senna to Schumacher and Lewis Hamilton for stub now
42:52
Speaker 2: because they're all different and we wouldn't do them justice
42:55
Speaker 2: by doing such a simple comparison. But if you look
42:58
Speaker 2: at the pure numbers today, Lewis scored the most victories,
43:03
Speaker 2: the most poor positions in his unequal power with Michael
43:06
Speaker 2: Schumacher in terms of titles, maybe he should have could
43:09
Speaker 2: have one more in twenty twenty one. So that's the
43:15
Speaker 2: 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
44:37
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: concerned 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 so 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 tents, 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.
46:58
Speaker 1: So there was a comment for Benito that making AUDI
47:03
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
47:20
Speaker 2: have been very successful in motor racing in general. The
47:24
Speaker 2: a Lemont program was the best ever and they have
47:29
Speaker 2: the capability and they will attract the people to make
47:33
Speaker 2: it a success. But one thing that I've learned in
47:36
Speaker 2: formula one you need time and I hope that as
47:39
Speaker 2: an OEM, they are capable of giving the project enough time,
47:42
Speaker 2: like 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 automatic, 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
48:33
Speaker 2: one hundred percent waste based biofield. 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.
50:51
Speaker 1: Huh, it's a model. What's the old line from Professor
50:55
Speaker 1: George Box All models are wrong, but some are useful.
51:00
Speaker 1: Is that how the ground effects end up working out.
51:02
Speaker 2: In the real world. I didn't hear that sentence, but
51:05
Speaker 2: it pretty much sums up where we are today.
51:07
Speaker 1: Yeah, a famous quote about economic modeling. Well, 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 CEO of Mercedes F one team. If you enjoy
54:04
Speaker 1: this conversation, well, be sure and check out all of
54:07
Speaker 1: the previous five hundred or so we've done over the
54:10
Speaker 1: past ten years. You can find those at Bloomberg, YouTube, iTunes, Spotify,
54:15
Speaker 1: wherever you find your favorite podcasts. And be sure and
54:19
Speaker 1: check out my new short form podcast at the Money
54:23
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54:27
Speaker 1: and most importantly, investing it. At the Money wherever you
54:30
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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.
55:02
Speaker 1: Assass