June 6, 2013

The challenge of succession

What will happen when Bernie Ecclestone is gone? © Getty Images

When studying politics at university, I came across Max Weber’s Three Types of Legitimate Rule, which says that there are three types of authority that give leaders the right to rule (I paraphrase). According to Weber, the three types are legal authority, traditional authority, and charismatic authority.

Over the years, the concept has been distilled into three types of leaders, which isn’t entirely correct.

I was never a student of business, but I have been told that there is a theory that puts business leaders into one of five categories, only two of which I can remember. A category five leader is someone who creates a business that can grow and build after their departure, and one who chooses a successor able to do more with the business than he himself has done.

Then you have category four leaders, who essentially take a slash-and-burn approach to business. They are the sun in the solar system of their work, and they create a universe in which they are so essential to the business that it will implode when they move on. There is no obvious plan of succession, because – in their eyes – there is no business without them.

Over the weekend, Bloomberg ran an interview with Bernie Ecclestone in which the F1 boss admitted that CVC Capital Partners had approached him with two possible successors – one unnamed, and one identified as Sainsbury’s boss Justin King – but that he had rejected both men as candidates.

“The people they had wanted, if they had come on board, they would have wanted to be the stars… If someone comes up who I think could do a good job, let’s have him on board,” Ecclestone was quoted as saying. “Lots of people have been suggested but I don’t think they are the sort of people who could do the things I do.”

But for years it has been known that no one person could do the things that Bernie does. The 82-year-old has been involved in Formula One for longer than any of the drivers on the current grid have been alive. In 1949, Ecclestone was taking part in Formula Three races, a year before the Formula One World Championship was launched at Silverstone.

When one has been involved in the periphery of the sport since its infancy, and actively for forty years, it is going to be impossible to find a like-for-like replacement. Bernie knows everyone in the sport, and has spent decades building relationships that enable him to do multi-million dollar deals on the strength of a handshake.

That, however, is no longer the world we live in. As Ecclestone – whose inner circles is comprised almost entirely of lawyers – knows full well. Any replacement for Ecclestone is going to have to be a multi-headed beast, with different people taking on the commercial aspects, the negotiating, the branding, and so on.

Which is how it works today. Bernie has built up a trusted team of confidants and experts who can deal with the small print while he acts as a figurehead for the sport as whole, the man whose name ensures that phone calls are always taken.

But unless he can identify a replacement figurehead and help that man or woman ease into the existing relationships that form the F1 power structure, Ecclestone runs a real risk of going down in history as the man who built up and tore down the sport that made his fortune.

Leaders plan for the future, even when it’s a future they won’t be a part of.

Comments

Posted by Dave on 09/06/2013

I agree that Ron Dennis could do a very good job, but I wonder if his close association with a team renowned for pushing the rules would make him acceptable. I also think he's a little too old to be anything more than a temporary fill-in until the real long-term replacement is found.

What's good for F1 in terms of sport may well be very different to what's good for F1 in terms of business though. For a person who could do the right thing by F1 on the sporting side and stand up to the likes of Ferrari, Pirelli and so on, Paul Stoddart could be a very worthy choice.

Posted by Kate Walker on 07/06/2013

Funny you should say Ron Dennis - he is the best example of a category five leader I can think of in F1...

Posted by John B on 07/06/2013

The way I see it, there are two types of successful business people; those in the mindset of a small but fast-growing business (who look for opportunities and have little time for anything else) and those in the mindset of running a large corporation (who consider stakeholders, understand the need to keep staff happy etc). I think Bernie for too long has been running a big corporation like it's a small-but-fast-growing family business. I think his replacement will need to be more in the 'CEO frame' than the 'entrepreneur frame'.

Posted by Hermann Stelling on 07/06/2013

Ron Dennis will be perfect! How about a wild card like the driver with all the records: Michael Schumacher. He has all the qualities: Ruthlessnes, well-known, respected, loved and hated, and most importantly, he knows all the complexities in and out of the F1 business/sport. Just a thought.

Posted by Brendan on 07/06/2013

I think the best place to start looking for figureheads would be ex-drivers who have made it in the business world... the difficulty is finding one who would try and remain neutral and wouldn't seek to be the centre of attention.

If Jackie Stewart were 20 years younger, he'd be a possible candidate.

If Niki Lauda were 10 years younger, he'd be a serious candidate.

If Eddie Irvine could stay somewhat in the shadows, he'd be a candidate to consider.

Posted by Rhys Harrod on 07/06/2013

Flamboyance with intelligence... Flavio Briatore? He has a bit of time on his hands at the moment...

Posted by Mal Moldrich on 07/06/2013

I'm thinking of Toto Wolff

He's young, smart, successful and ambitious

This is evidenced with his history (racer, team owner/manager, driver manager, investor - all successful) and current positions with Williams and Mercedes

The engine deal with Williams is further evidence of his influence as is the recruitment of Hamilton, Lowe and no doubt other key staff.

We can expect his influence to grow more and more and we also cannot underestimate his position with Mercedes - a major car manufacturer with the foresight to recruit Wolff to give the F1 team the forward momentum at the executive level - a key aspect in a very politically commercial environment that is F1.

I think he is sharp enough to be respectful of Bernie as a whole concept and bring enough to the role to improve it whilst maintaining the Ecclestone legacy

Put simply great for the sport and us fans

He would get my vote - should I write him a reference?

Posted by Antony on 06/06/2013

I have finished reading the book No Angel all about Bernie. Many people in the paddock dislike him but are soft and lovable and could not control the system.
I had a supervisor who was nice and friendly and he got little done. Most supervisors are the fiery egotistical type. Despised by department but get the job done.

Posted by David Berruecos on 06/06/2013

There are only 2 mistakes a leader can make: 1.- Not knowing when to retire. 2.- Fail to name his successor. F1 can't afford mistakes. Is an accurate sport.

Posted by Adrian Williams on 06/06/2013

There is one and only one candidate! He has managed a topline team with topline drivers and is a deal maker extraordinaire...Who I am I referring to??? RON DENNIS of course!

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WRITER BIO
Kate Walker is the editor of GP Week magazine and a freelance contributor to ESPN. A member of the F1 travelling circus since 2010, her unique approach to Formula One coverage has been described as 'a collection of culinary reviews and food pictures from exotic locales that just happen to be playing host to a grand prix'. Kate Walker
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