Strategic thinking

There is a joke in F1 circles which suggests that the sport is somewhat dysfunctional because it has a promoter who doesn’t promote,  a governing body that doesn’t govern, an owner who doesn’t own and a Strategy Group that seems to be without a strategy.

So, yesterday’s F1 Strategy Group meeting in Geneva was all about wind tunnel time, stewards and penalties, track limits, engine noise and the halo… Nothing to do with strategy. Perhaps this supreme body of the sport should be renamed as the F1 Minutiae Group.

Strategy is defined as a plan of action designed to achieve a clear goal. So, surely, the Strategy Group ought to be discussing things that really matter, or defining a goal for the sport. It would be serving the sport better if it were discussing the question of the inequality in the distribution of prize money; the fact that some of the teams are stretched too thin while others are stuffed with cash. There are questions about which races should and should not be on the calendar; perhaps there ought to be discussions about how to raise the TV revenues; and the need for better merchandising. And maybe even why the sport is not more engaged with different types of media: should more forms of social media be allowed to help promote the show?

Strategic questions are not track limits and wind tunnel time, but rather the question of engine stability rules, which we need if we want new manufacturers; whether we ought to have the calendars fixed years in advance in order to help the race promoters do the best job possible; whether there should be F1 offices in Hollywood and Bollywood to place the sport into films and TV, and to place film and TV stars into the sport.

And yet, these issues don’t get discussed because the racing folk have their attention diverted by unimportant details which are “spun” into issues. It seems a bit like the firecrackers and drum rolls one gets in bad magic shows. The primary skill of the magician is misdirection, to distract the audience so that they focus on unimportant things while sleight of hand is going on. There are even some people who see a connection between magic and warfare in that both rely on the same principles that one finds in Sun Tzu’s “Art of War”, which argues that deception is essential to successful military action.

But then again, perhaps whoever draws up the agendas for these meetings does have a strategy: to be without a strategy. Things stay the same, people waste energy on details and only the clock moves onward…

46 thoughts on “Strategic thinking

  1. “…which we need if we want new manufacturers”
    I’m afraid the handwriting is on the wall for the IC engine. ICE production will peak in just five years and then begin an inexorable decline. OEMs are going to drastically reduce investment in new ICE development and shift those monies to batteries, electric drives and software operating systems.
    F1 needs to think about how to respond – strategically – to this existential change. Do they go along with electric drives in support of an OEM-led business model, or do they refocus on ICE, presumably with independant suppliers, and let the OEMs go away. Which is better for the fans and entertainment value? Which is better for FOM revenue?

    1. You seem to have missed the word hybrid. Electric cars are still 20 years away from being the mainstream and thus the age of hybrid is here.

      1. I agree. And sadly that is one reason we – the fans – are stuck with the hybrid engines in an OEM-led funding model. I think “20 years” will prove conservative, as once battery costs hit $100/kWh the dam will break open on BEVs (battery electric vehicle). Hybrid technology is a high-cost stop-gap due to the state and cost of present battery technology.
        Formula One needs to start thinking big picture, like you say.

          1. As an owner of an electric BMW i3 i can say that they are definitely HERE and a viable transport option, for me and my family. The technology is fascinating, advanced and desirable. All things formula 1 represents. Hybrids are fine but not the long term future (maybe for HGV’s and coaches but not personal transportation). development will be rapid and F1 is a perfect vehicle for battery development. If F1 could sort out its regulatory oversight, development cost excesses, bring stable regulations and engage more effectively with my kids then BMW, NISSAN, JAGUAR et al would jump at the chance of joining the club….with electrification as an element of its attraction.

            1. David: Perhaps a pure electric car works for you – where *you* live. Perhaps you live in a moderate climate that doesn’t force you to use a great amount of reserve battery power to keep warm at -20C or survive a trip from Reno to Vegas in mid 40C summer’s watching the air con try to keep you cool and hope you make it on that charge, (you won’t anyway). Perhaps you enjoy a job that allows you to live in your small town or within your region. Meanwhile, there are others that have to travel a 1000kms on sales trips and are still not out of their Province, let alone anywhere near their countries borders.

              The petrol based engine has been long lasting simply because of its flexibility and mature infrastructure. Yes, electric infrastructure may attain the same level of convenience but at what cost to the environment? Power does not arrive by magic – it is produced by coal, natural gas or nuclear power centers – each method having a down side. The nickel mined in Sudbury (Canada) and refined in India for your BMW’s battery has environmental impacts as well.

              Having your cake and eat it two mode (Hybrid) seems perfectly level headed to this person, especially if it can be combined with a KER’S system or other recovery methods. Don’t misunderstand me here, there are situations where electric power is perfect – say running around in Cannes delivering bread. But not all of us live in the ‘perfect’ environment for electric vehicles or drive a distance mandated by power levels.

              No, the future isn’t replacing one infrastructure (petrol) with another, (electric generating plants) as a primary source of vehicle propulsion – the future is developing the vehicle to create its *own* source of power independent from the massive infrastructures we have currently.

              Hybrids get us partly along that path, a path that F1 has been developing over the last few years and I must say, developing spectacularly well. Some fans turn their noses up at the current F1 technology but if they look at the amazing level of performance (200+ mph) attained for up to 2 hours and the distance traveled, its quite astonishing.

              The future is self generation, say self perpetuating Hydrogen fuel cells and recovery systems or something we can’t even imagine at this point. The future isn’t at the end of an extension cord…

        1. Battery costs aren’t the only thing standing in the way of electric vehicles becomming mainstream – there’s no infrastructure for it. We couldn’t all switch over to electric even if we wanted to.

      2. I think Gary refers to the fact that no one will develop ICEs much further. Hybrid powertrains will develop due to development of battery packs while lessening the importance of the ICE in them.

        While many decades will pass with manufacturers still rolling cars off the line with only “traditional” ICE powertrain (and most of the heavy-duty vehicles will be exclusively diesel/petrol-powered for evermore), the marketing power has already shifted from them to hybrids and already gained an ever-growing ground in pure electric propulsion.

        In their thinking, Formula E is the next logical step from Formula 1 and it is very likely that pure electric power will be regarded as the top of the pyramid (right or wrong).

          1. “Of course they will continue to develop the ICEs. There is money in it.”

            But is it really viable for an engine manufacturer who has yet to enter F1, to consider starting-up a hybrid power unit program destined for F1? Honda has shown how wide and potentially unbridgeable the gap to Mercedes really is and they had prior F1 involvement with infrastructure.

            Granted, one might argue that Honda’s philosophical approach isolates them from some of the current F1 engineering brain-trust, but the performance gap does remain significant given the complexity of the design. There are undeniably hyper complex anicilliary systems to integrate and optimize on top of the need to build a very high-performance/super efficient race engine which already represents a daunting task.

            The real question is: even if the power unit rules remain stable, will there really be new hybrid engine manufacturers interested in getting involved?

            Furthermore, does this engineering complexity really bring any added value to the racing? Sure the efficiency is impressive but what does it actually contribute to the overall F1 experience?

            Cheers,

            Mario

          2. Indeed Ford and others were working on an extra frugal petrol engine to do over 100 mpg. As diesel has now had some hysteria attached to it it via cheating on emissions of NOX which are not even listed in the UK, the advantage of high diesel mpg looks as if it may be banned in some cities by some over excited european officials. Thus the frugal version petrol engine and others have renewed research impetus. (of course when these officials find that they have no food and all the restaurants are shut, they may change their minds)

      3. I think 2016 is destined to see electric global car sales at 1% and hybrid at 2%. ICEs are due to be around for a heck of a long time.

        Resale values of cars with batteries will tend to be depressed because of the cost of battery replacement.

        I think most people are able to reason that it is only a question of where the pollution is created. City dwellers living in apartments will probably not have access to the recharging infrastructure to answer “Not in my backyard”.

        1. If there are more battery-powered cars, what power plants will be needed to charge them. I don’t see wind and solar doing the job, solar, especially, presuming most charging will be done overnight, and the nights are long the further north one goes (this hemisphere). Is coal viable? Is coal “acceptable”? Natural gas? Nuclear?

          1. And it also takes many years and a hell of a lot of money to build these “electric” plants. To see full electric cars, we will be lucky to see much of a sizeable increase by 2050. Hybrid is the mid term solution. I am confident in saying there is not one country in the world that has the capacity to power 20% of the vehicles they have on the road by 2050. And how much do you think it will cost, a lot more than what we will be paying per litre of petrol.
            I’m shocked that as smart and wealthy that the vehicle OEM’s are, they have not done any research on the availability of electric power on a large scale…

            1. If electric cars were to catch on and start becoming the norm (they won’t), the tax which makes it cost fifty quid to fill a ten gallon tax would be transferred across to make it cost fifty quid to charge the batteries. Governments simply aren’t going to lose out on that kind of money, and those who tout electric cars on the premise of nearly free running are living in a fantasy world if they don’t realize that. There would be a legal requirement for separate metering for car charging, which would raise costs still further.

              So the outcome would be the same cost for less practicality from cars which are less desirable on the used market.

              The truly environmentally friendly policy is to encourage people to keep old cars running longer, and to bar any individual from buying more than one brand new car in any ten year period. Scrapping cars with useful life left in them to make more new cars is far more wasteful and harmful than using petrol to power them. The greatest asset of a car should be its longevity.

                1. Only in comparison to the running emissions of newer ones, not compared to the use of resources and pollution created in making the new cars.

                  Even in F1, where the cars do four or six miles to the gallon or something similar, in 2010 Trucost reported that eighty per cent of the teams emissions came from production and supply of raw materials and parts plus electricity usage in design and manufacture.

      1. As new owners will Liberty have the opportunity/right to rewrite the participation rules, on their own, once the current Concorde Agreement expires? obviously a give/take negotiation, but I think they would be in the catbird’s seat?

  2. Thank you for drawing attention to F1’s longstanding missuse of Strategy when they really mean Tactics. It has always grated when the Strategy word is used when the issue is which lap to change tyres!
    No wonder there is such a muddle.

  3. “…perhaps whoever draws up the agendas for these meetings does have a strategy: to be without a strategy.”

    It’s just Ecclestone channeling his inner Cunctator.

    1. Re Q. Fabius Ecclestone Praeparvus Cunctator–

      A very apt description. If Chase Carey realises what he’s up against and is able to dispose his forces accordingly, things will get very interesting. Jean Todt was a damp squib as an opponent (and after such a promising beginning, too). Even if the Liberty deal does go through, I wouldn’t want to bet against Uncle B…

  4. Here, here! I work in a council planning department (not quite as glamourous as F1, granted) and we have strategic and operational management meetings. Track limits, windtunnel usage etc. are all “operational” matters. They should be discussing these at the Operations Group, not the Strategy Group!

  5. You are quite correct. The Strategy Group should take a look at strategy from Indycar and NASCAR who both have within their strategy to consider the fans. In making exciting racing, fan involvement and facilities. Without the fans sports tend to fade away. Pay per view, whilst generating huge incomes reaches a relatively small audience. With Liberty Media streaming has to be a way to go. More viewers, rule stability and some manufacturers might at least consider involvement in F1.

  6. While they are at it, they could sort it out so that the tv coverage isn’t all pay per view, and ask why teams have to compete with FOM for sponsors.

  7. I think you sum the situation up pretty perfectly, Joe: someone at the top is happy with the status quo…

  8. The primary problem with the strategy group is that the people who are involved are also the ones who will not benefit from looking at, and revising, actual strategy.

    In no other major sport in the world do teams have as much say about how the sport is governed as in F1.

    1. Comment from Ross Brawn…”I think one of the frustrations for me is that there never seemed to be a plan and everything was reactive. Therefore, I think it would be good for Formula One to try to formulate a plan and a strategy of where it wants to be in three years’ time or five years’ time.

      When Liberty finally get control…I truly believe that they will put Ross Brawin in a position to make this happen…hopefully sooner than later.

      I do not believe that the Strategy Group will have the same power it has now with the new Owners…and they can’t blow smoke up Mr.Brawns bum as he has seen it all.

  9. Primary problem in motorsport is too much money located in the hands of to few people/sectors of the sport. And no governance to speak of. The pinnacle of the sport seems not to care about the steps up to the top, nor much about spectators, nor about anything except the yearly bottom line….and as long as 3 or 4 of them have a + on that rather than a -, they don’t give the proverbial rat’s bottom about the rest of the circus…..all during this century the whole thing has only reminded me of the image of Nero fiddling away while Rome burnt down around him…..

  10. Joe, this might be off-topic. I was able to get the 2015-2016 Autocourse for $13.95. I paid $29.95 for 1976 Autocourse in 1977. To me this price is the canary in the coal mine. Interest levels for this sport is not getting any new buyers. What do you think…. Maybe people don’t read.

    1. I used to buy Autocourse every year, but stopped as I was getting bored with the limiting engine regulations, especially the RPM limits; it started to feel like the sport was no longer on the technical cutting edge. It’s still basically impossible to find technical engine details, with the teams keeping everything so secret. All we see anymore is pictures of some mysterious lumps. I would love to see how the manufacturers are implementing the variable intake trumpets, for example, as well as actual pictures of the new ignition systems, exploded drawings of the engines and power components, etc.

      I also find the strict engine regulations in regards to V angle, c.g., weight, materials, etc. to be sort of anti-technological. The engines don’t even spin at maximum revs because of fuel flow restrictions.

      I understand why the manufacturer’s are keeping things secret, but it’s taken a large bit of the fascinating stuff away, IMHO. One of my favorite technical books is Ian Bamsey’s “The 1000 BHP Grand Prix Cars’. Fantastic stuff. I wish we could have information like this about current technology.

  11. I believe, just yesterday, the German Parliament voted that ICEs should be banned after 2030. One way of countering this decision would be that petrol engines continued to increase in efficiency as the current F1 units.
    Unfortunately what some, certainly not all,of the fans desire is an increase in noise. Inherently that means a decrease in efficiency. Personally I am not fussed by the current noise output but cannot get at all enthused about Formula E.
    I hope that the current concepts continue as long as possible with continuing improvements in efficiency though it is likely that the rate of change will decrease.
    This means a whole new attitude to top level motor racing and probably a completely new technology.
    As so often interesting times.

  12. Compared with for example the Fifa/Uefa (football) and the UCI (cycling), Formula 1 appears to have much better corporate governance. F1 could be run worse.

    That is in no way an excuse to not improve F1’s governance.

  13. Five teams don’t get a seat on the Strategy Group. Only the successful, therefore rich, teams have the power in F1. They are not going to share the F1 pot and they certainly won’t be changing rules that don’t suit them. For example, there are calls to change the Blue Flag rules and allow the lapped cars to stay on the racing line. Lapped cars belong to the lower, non-SG teams. So don’t expect to see a change there any time soon.

    I don’t even know if the non-SG teams have any kind of voice in the SG. Who speaks for them?

    As for the FIA, they are joke. A couple of season ago, they made a major decision – drivers would no longer be allowed to change their helmet designs, because spectators couldn’t pick out the drivers. Why didn’t they tell the teams to put larger numbers on the cars?

    F1 won’t change until both Todt and Bernie go.

  14. Joe, I eventually found the actual figures for Bridgestone extreme wet v Pirelli extreme wet, and now I understand why we dont have proper wet races anymore, Bridgestone 80 litres of displacement v 60 for Pirelli, percentage wise that’s a massive difference, throw in the wider operating temperature too for good measure and it’s no surprise the drivers are complaining. Why is there a reluctance to call Pirelli out on what is a fairly inadequate, possibly dangerous wet weather tyre? Surely a better tyre strategy is in order.

  15. Electric cars: I just can’t see it for a long while!
    Where will all that electricity come from.
    What will happen to the price of petrol if no one uses it in cars.

    I have the answer! We must build some new petrol powered electricity generating stations to produce all the electricity to power our cars. The politicians will sort it out for us.

    But seriously, I can’t see the hybrid going away that quickly but perhaps the emphasis may change from electricity being the auxiliary power to the primary power and the ICE being the back up generator as in the BMW i3.

  16. One can only hope that Liberty see that the SG is effectively illegal or at least in contravention of the EU Commission on F1, and thus decide that it must go. They can then revert to two sides with separate objectives and not this twisted underhanded mess that Bernie devised.

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