ADI IGNATIUS: I’m Adi Ignatius, and this is the HBR IdeaCast.
If you’re a fan of Formula 1, then you’re familiar with the complex elements of strategy, teamwork, and innovation that go into a successful racing season. If not, trust me, there are lessons in this for you as well.
I’m speaking today with Zak Brown, the CEO of McLaren Racing, which operates an iconic Formula One team. McLaren just won the overall F1 championship for the second straight year, the latest milestone in Brown’s remarkable turnaround of an enterprise that had lost its way.
I spoke with Brown as part of a series of live events that we offer to our HBR Executive subscribers. The conversation wasn’t just about winning, but about what it takes to rebuild a brand, to overcome low morale, to learn through failures and setbacks, and to develop the clarity of vision required to make it back to the top. We’ll hear his insights into what leaders need for sustained high performance, and you might be amazed with how McLaren is using AI. Here’s my conversation with Zak Brown.
Look, it’s hard to win in business. It’s hard to win in the professional sports world. You’ve now done it, the Constructors’ Championship, in two consecutive years. Talk about how you’ve accomplished that and what leadership and maybe organizational lessons there might be for listeners who aren’t familiar, who aren’t F1 fans.
ZAK BROWN: You know, it’s never a simple answer, but if I had to put what was top of the list, it was people and specifically our culture. Obviously, we’re in the most technically advanced sport in the world, so technology clearly plays a huge role, but it’s the people utilizing the technology, working together to develop an awesome racing car, to give our two awesome racing drivers the chance to go out and win world championships.
For us … and I think this applies to business, certainly applies to sports teams … which is getting everyone to understand their contribution to the sport. While we have let’s call it a thousand people, 600 of those touch the race car. It’s the other 400 that are equally as important that add performance to the racing team, because without them doing an excellent job in their role in finance or commercial or communications or HR, we wouldn’t be able to put the team together to be able to give the designers, the aerodynamicists, the tools, resources that they need to be able to actually put together the best race car. I think it’s about getting everyone to understand how they contribute to a common mission.
ADI IGNATIUS: You took over McLaren Racing during what was a pretty tough chapter in its history, struggling financially, low morale. The team wasn’t performing. There wasn’t a lot of sponsorship money. When you think back to those early days for yourself, what were one or two of the hardest decisions you had to make, and what did you learn about leading through a turbulent period?
ZAK BROWN: I wouldn’t say the decisions were particularly hard, because I like making decisions. It was getting what you just described, the very toxic environment, both with our fans, our sponsors, which sponsors we did have, which weren’t many, weren’t very happy, and our employees weren’t happy. Our drivers weren’t happy. I think the hard part wasn’t the decisions, because it was clear decisions needed to be made. It was getting everybody bought in, changing the trajectory we were on, building trust through transparency and communications, getting the fear out of our culture. It was making decisions that drove that.
The hard part was more, it’s a big boat. We have 1,400 employees at McLaren Racing. Obviously, there’s companies that are significantly larger than that, but it’s a healthy-size organization. When you have lack of alignment, lack of trust inside your own house, until you get your house in order, forget about making any impact to the outer world. I think the difficulty was reversing the momentum, which takes some time, and it’s hand-to-hand combat.
ADI IGNATIUS: I’m somebody who came to where I am, Harvard Business Publishing, from the outside. You come in and you think, “Look, I’m going to be reasonable, and I’m going to present some new ideas but also try to respect the old ideas.” It’s not that easy, right? I mean, the entrenched workforce resists, has its way of doing things. How did you deal with that part of it? “Here I am, I want to do some new things.” People don’t like to do new things.
ZAK BROWN: Yeah, it is difficult. People don’t like to change their habits. I think you can almost break the organizations down into three groups, and not necessarily 33, 33, 33, but you have those that want change, embrace change, recognize change is needed. That’s a pretty easy group, because they’re willing.
Then you have another group that’s on the fence. They’re not so sure. They’ve seen it before. In our instance, we had about five different leaders in seven years. I remember when I started, it was, “How long is that going to last? Because the last guy that was here wasn’t here very long.” You have a group on the fence, but they need to be buy-in, which they want to. There’s just a skepticism. Then you have another group that needs to be changed out. They’re the ones that probably created the issue that you’re dealing with, the naysayers, what we call a loser’s mindset instead of a positive mindset, a winner’s mindset. Those people need to change.
Now, if you’re walking into an organization that’s in turmoil … which we were, all the things that you just mentioned … clearly you need to drive change. The way I did that was by changing my leadership team structure. I can’t go at this alone, so everyone on my leadership team, CFO, head of HR, head of commercial, head of comms, head of the racing team, all changed. I didn’t come in going, “I’m going to change everything.” I came in going, “I gotta understand what’s going on here.” Then I realized, “Oh, I need some new leadership.” Then once I created that bond and we all challenge each other, I definitely don’t have any yes people sitting around the table. We challenge each other. We’re very performance oriented. We’re very straight talking. Then once we align on a topic, we’ve debated it, you would never know who in the room wasn’t initially on board, so it’s a very strong team.
Once I was able to get that in place, I was able to get them to carry that same energy through their organization. Finance got new energy, HR got new energy, commercial got new energy, and then you get everyone rowing the same direction, you get some positive energy, trust going. Then it’s amazing how quickly that accelerates when you get people all in the right frame of mind.
ADI IGNATIUS: You came to McLaren I think shortly before Liberty Media acquired Formula 1, and really has transformed it from something of a niche motorsport to a really global entertainment business. I’m interested in how you think about navigating the balance between the traditional let’s say sporting integrity and the newer entertainment-driven expectations. Is that a tricky balance for you?
ZAK BROWN: For us, it’s not. It’s something that I hear often, and I kinda don’t get it. People go, “Oh, sport and entertainment, it’s not the same.” Well, to me, if you buy a ticket to go see a fireworks show, a motor race, a movie – that’s entertainment. Obviously, we’re a technology-driven sport. We don’t want gimmicks, and maybe that’s what people think when they think entertainment. I remember the first time I went to an F1 race. It was 1981. I met a driver, I saw the cars, and I remember how much an impression it left on me. I wanted the merchandise, and I’ve still got, actually, the race program.
I think what sport entertainment means for me is the sport takes place on the field. The entertainment part is how do you get our fans, existing fans, new fans, closer to McLaren, closer to the sport so they can feel that affinity, that engagement. The world’s now moved from awareness to engagement. Digital plays a great role. Netflix has been wonderful for our sport. For me, it’s been about here’s how we go racing, but how can I now get our fans close to the action, getting to know the drivers, seeing how we build our cars, so they can really feel part of the journey.
ADI IGNATIUS: You mentioned technology. I mean, Formula One produces, I don’t know, as much data as Major League Baseball now, right, so a ton of data. How do you make sure it converts into insight and not just noise?
ZAK BROWN: Yeah. We pull down one and a half terabytes of data, which is about 10 million documents, because I never knew what a terabyte was. I was like, “Well, put that in English for me.” That’s 10 million documents, 400 movies, just to give the size and scope. We have 300 sensors on the car, and you’re exactly right. You get all that, and you’re not going to have someone picking through one and a half terabytes of data. AI plays a role in that, and then our technology partners play a big role in that. When we’re pulling all this data off the car, we know what we’re looking for and we know how to get it. Then things like AI help us get it quicker, because we’re all about speed. There’s some data when we’re developing a car that we don’t need to react on urgently, but when you get into the race, you need to react to data now, literally split-second decisions, and so we have a lot of technology partners that help us in that area.
ADI IGNATIUS: Talk about AI more, to what extent you’re using it in designing the car, in making strategic racing decisions, in engaging with fans. What are your AI use cases at this point, and what do you think about in the future?
ZAK BROWN: Yeah, it’s definitely going to grow. It’s – we’re using it all throughout the business. We’re using it with our fans, our engagement with fans. We’re using it in strategy. We’re using it around tire degradation, which is a big part of what drives the strategy for us. We’re able to work with one of our partners, Google, to work with them through cloud where we’re looking at what the competitors are doing with their tires, as are we. We’re all listening to each other.
Kind of like a third base coach at a baseball game, we’re sometimes throwing some bogus signs out there because we’re trying to pull people into different strategies. If we say something to Lando and we ask about tires and we say a word after the word tires, we want an incorrect answer, because we’re trying to pull another team into maybe a different strategy. “Lando, how are the tires doing?” He has to then go, “Ah, that’s a cue for I need to give a bit of a bogus answer.” All of our competitors … we do the same … will then go look at the tires and look at some thermal imaging, and AI will help bring out any anomalies to try and tie up is what we just heard from a driver actually what we’re seeing, so AI helps us do that.
That’s some of the data that we pull. Then you get into voice recognition. When people tend to not be telling the truth, sometimes there’s a difference in their tone of voice, so you get into some voice recognition. We’re listening to another driver and it can start to pick up, “That doesn’t sound like a … ” it’s kinda like having a lie detector test. It’s all those types of elements in which we’re using it. We’re starting to use it in aerodynamic development, but I think it’s early days and only going to evolve very quickly.
ADI IGNATIUS: Those are some of the most interesting use cases for AI I’ve heard of for coding, for decoding, for lie detector. That’s amazing. All right, then the moneyball question. How do you balance relying on data versus your gut instincts learned during a career in the sport?
ZAK BROWN: Well, I think it’s data first, and then ultimately it’s just like a business, right? You get all this data in. You still need to make a decision, because data can be misleading. You can look at data different ways. You gotta kinda know what data you want to look at to help solve decisions. All of our decisions, our data-driven decisions, some of them are very black-and-white and the data makes it very clear what you should do. Others, you’re piecing together different pieces of data. It’s not just one piece of data.
You take pit stop strategy, which is a big part. I want tire data, I want weather data, I want competitive data, I want insight from the driver on what they’re feeling. You get all this data in, and then you need to use what we call racer instinct, which would be no different than business instinct, and go, “Right, based on all these dynamics and all this data that’s coming in, here’s what I think we should do.” I think at the end of the day, the human is still making the decision.
ADI IGNATIUS: Your early career … and this is from your book … blended your racing ambition with a dealmaking sense and, as you write, spending more than you had so you could grow the company. I’m interested, how did that tolerance for financial stretch shape your approach to calculated risk-taking at McLaren’s?
ZAK BROWN: I’ve always had bigger ambitions than resources, but I’ve always followed the ambition as opposed to the resource. I want to do this, therefore I gotta figure out how to do it as opposed to what can I afford to do, because I could never really afford to do what I did. I always put myself out there, and it put some pressure on myself. I think there’s two types of people. I talk about this in the book. There’s people that are motivated by the thrill of victory, there’s people that are motivated by the fear of defeat. I’m motivated by the fear of defeat, which I think is the more stressful way to go about winning, if you’d like.
What I did is I always just set the bar a little bit higher than I thought I could jump, but then I was nervous about not making the jump. I was uncomfortable, and then that just got me up every day. That’s still how I operate. I think it’s like that, the pole vault. You just get a little bit higher than think you can go, but when it comes time to the Olympics, it’s amazing what you can do if you really put your mind to it.
ADI IGNATIUS: This is an audience question from a viewer named David, who says, “You were close to last a few years ago, now you’re on top. There are nine other teams trying to achieve exactly that and they all want to leverage their people, their processes, their data, the way you are. Is there something that makes McLaren different, or is it just some years it’s your year, next year it might be somebody else’s?” How do you think about that?
ZAK BROWN: Well, I think one of the advantages that we have, as do a couple other teams, is we’re a megabrand. I’m a baseball guy, so forgive me for all my baseball comparisons. When you grew up, did you want to play for the New York Yankees or … I don’t want to pick on another team, but you get where I’m going with that, right? We’re a big brand, we’re an iconic team, so we’re fortunate that when people want to get involved in racing, if you made a list of who are the teams you want to work for, McLaren and Ferrari are always going to be at the top of the list, so that allows us to attract awesome talent.
I think we do have a little bit of a built-in advantage because of our brand, our history. We’re the second-most successful team in the history of Formula 1. We’re the second-oldest team in the history of Formula 1. I think that gives us a little bit of an advantage when it comes to attracting corporate partners, attracting employees, drivers. Everyone wants to put the pinstripes on and be a Yankee if you’re a baseball person … or in my case, the St. Louis Cardinals … and I think the same applies to McLaren and Formula 1. That gives us a little bit of a head start, if you’d like, on some of our competitors.
ADI IGNATIUS: Here’s another question from the audience. It’s anonymous, but it came in. “In F1, your drivers are very visible members of the team, but you’ve got hundreds at least of other workers that make up McLaren that are not visible members of the team. How do you motivate everybody else and ensure that they receive the recognition, the praise, in this kind of environment?”
ZAK BROWN: It’s exactly that. It’s recognizing them, not forgetting about them. All the drivers, or the people on TV and pit wall, they’re the famous ones. There’s eight, nine people on pit wall. Like an example, I’m going to send out here shortly a lot of thanks to people that are involved in our racing team. One will be my leadership team, which some of them are known, some aren’t, but everyone kind of … you win the race and the head of strategy gets all the credit and the engineers and the pit crew, but it’s the people behind the scenes that are putting the pit crew and the engineers in a position to do their job. It’s about making sure and not forgetting and giving that recognition.
One of the things that we did as a team this year is when you win the race, you’re able to put someone up on the podium from the team to celebrate with the drivers. We put up two female employees this year, very important, our CMO and our CFO, which was really cool. It was the 11th time a woman’s been on the podium in the history of Formula One. That drew a lot of a positive attention and made Lou feel very proud. Louise is her name. We call her Lou. Let’s her whole department … because what we did is we rotated through departments, and those people that were up on the podium were representing their department.
Laura, our CFO, got up. Not only was it awesome for Laura and did she feel incredibly privileged … because it’s pretty awesome standing on a podium of a Formula One race … but everyone in her finance department knew she was representing the finance department. It was a signal to her team. “You’re so important to us. There’s only one person that can go up on the podium.” We did it 14 times this year. It is about letting people know and letting them be part of the journey.
ADI IGNATIUS: Here’s another question from the audience. This is jumping back a little bit in our conversation when you were talking about when you take over, and dividing into the people who are getting it, people who aren’t getting it. Darlene’s question is, “How much time did you give the group with the so-called loser’s mindset to have the chance to get on board with the new ethos?”
ZAK BROWN: Not a lot. Now, you give it time. If you feel like they’re going to get with the program, then you give it time. You don’t just expect someone to go from, “I’m not sure,” to an avid fan, if you’d like, overnight, but you can kind of … I give everyone a chance. That’s what I would say. If they’re not going to start coming my direction … and I’m prepared to go their direction, it’s not my way or the highway, but it’s like, “Are we going to be on the same team?” I like to listen and understand. It’s not, “Here’s how we’re doing it.” It’s, “Here’s how we’re going to work together and going to be a team.” I’m very open-minded about how we execute that.
I give people time if I feel like they’re making progress, if there’s a willingness, if they’re meeting me halfway, but you can usually have a pretty good sense of someone pretty quickly, whether they have a winner’s mindset, a loser’s mindset, or if someone’s on the fence. Especially when the organization’s had so much change, you can see why someone’s like, “Well, I don’t know if I want to jump in, because how do I know it’s not going to change again in six months?” I’m patient as long as I see progress. I have very little patience if I don’t see progress.
ADI IGNATIUS: You’re obviously riding on a high now. Sport has its highs and lows. No one’s going to win every year. Looking back at maybe the darker days, was there a particular setback or error or mistake or failure that taught you something fundamental about how to be a leader?
ZAK BROWN: Lots of them. I think that’s what’s made me a better leader. You learn from your mistakes. I say in the factory, mistakes are okay. Just don’t make the same one twice, because then you’re not learning. I think some of the higher-profile ones, probably the worst moment in my racing career was we didn’t qualify for the Indy 500 in 2019 with Fernando Alonso, two-time world champion. Here I am bringing the McLaren brand and a two-time world champion to the Indy 500, and we don’t qualify. I mean, that’s a total car crash for you, to give the pun.
I made a lot of mistakes along the way. I didn’t put the right people in place. That’s my fault. I didn’t trust my instinct. I knew early on I’d made some wrong decisions, and I got talked out of it. I underestimated the task. Because I was so focused on Formula 1, I underestimated what it was going to take to start an Indy 500 IndyCar team and we failed miserably, but we didn’t quit. We learned. Now last year, we had the best season in our IndyCar history, more podiums. We finished second in the championship. We’ve finished second at Indianapolis twice in the last three years.
I remember when we failed, some people said, “You’re going to give up now?” I was like, “No, no, no, no.” In racing, you crash the car, you rebuild the car, you go again. It’s something. People say to me, “What’s one of your more proud moments?” They look at me with a raised eyebrow when I go, “Well, not qualifying for the Indy 500 and how we reacted to it.”
ADI IGNATIUS: To the extent that I know your background and even just talking to you, I mean, you blend a commercial sense, commercial acumen, with racing instinct. Does that translate into leadership principles that maybe you have that others don’t, or maybe even push back on?
ZAK BROWN: Yeah. For me … I don’t want to speak about what others do or don’t, but I can just speak about my own experience … I think, having been a racing driver, if I think about what it takes to sit behind the desk as a CEO or sit in a race car, you, A, have to surround yourself with great people. Lando didn’t win this championship by himself. He had 1,400 people helping him, so you need to have great people around you. You need to have great technology around you in today’s world. Whether it’s a race car or just any company, technology’s critical.
You need to be a great communicator, which means both speaking and listening, because I’m giving feedback as a driver to my engineers, and at the same time, I’m getting feedback from my engineers. I need to trust. It’s life and death in a race car, so you need to trust the people around you, and you need to know risk versus reward. Are you going to go for that pass? What are the consequences of getting it right, or I might win the Indy 500? I might take some risk if the upside is winning the Indy 500. If it’s a practice session, am I going to make that pass and crash my car? I’ve got nothing to win. It’s practice. I think risk versus reward.
Then you get data when you’re driving, but you’re racing by instinct, and sometimes you literally have split seconds to make decisions. Other times you can do a debrief, look at the data, talk to your team, and come back and do it again tomorrow. I find a tremendous amount of similarities behind sitting in a race car and sitting behind a desk of CEO.
ADI IGNATIUS: All right. Zak, this has been a great conversation. I want to thank you for being with us.
ZAK BROWN: It’s my pleasure. Thanks for having me on.
ADI IGNATIUS: That was Zak Brown, CEO of McLaren Racing. A reminder, this conversation is part of our HBR Executive subscriber content, designed to give senior leaders the tools and practical solutions they need to handle the complex challenges that affect their businesses every day. You can access our monthly HBR Executive Live series with CEOs and much more at hbr.org/executive.
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Thanks to our team, senior producer Mary Dooe, audio product manager Ian Fox, and senior production specialist Rob Eckhardt. Thanks to you for listening to the HBR IdeaCast. We’ll be back with a new episode on Tuesday. I’m Adi Ignatius.
