Features - Exclusive Interview
MARCH 6, 2003
The thoughts of chairman Richards
BY JOE SAWARD
David Richards admits that he is pedantic by nature. He likes things neat and tidy. His offices are immaculate. Radiators and air-conditioning units are hidden. Apples must be green and healthy-looking. People must be presentable. The man himself is more of a free spirit and his Don Johnson, nearly-shaved look seems somehow incongruous sticking out of the top of a neat suit and tie. He seems a little weary. He has flown in from Japan the previous day and did not sleep much. He is two minutes late arriving but apologizes for it.
"I want all the details to be right," he says, but then pauses... "In fact I am probably not the person to get involved in that. I get very bored very quickly and so I make sure I have a lot of people around me who can deliver. That is my style of working and the way I have structured my life. I don't think I would have it any other way."
It is the style of a man whom has enjoyed a lot of success. He has the ideas and does the deals and then lets his subordinates do the day-to-day work. The big hurdle was making his first business a success.
"In the earlier days I made sure I got it moving properly and got it all up and running and then I handed it over to people who were better at managing the process than I would have been. I feel comfortable working that way."
There was a time when Richards said he was not really bothered about being involved in F1 but as his empire grew so did the need to be seen to be involved in the biggest game in motorsport. And so did the desire to be involved. There were whispers of Prodrive interest in F1 as long ago as 1994 but it was several years before Richards had his chance at Benetton. It lasted a year and proved little. He came up with his plan of what the team needed to be successful. The Benetton Family did not agree. Richards left. In the end the Benettons decided to sell up and get out of F1.
At the end of 2001 Richards got his second chance. The shareholders in British American Racing had had enough failure. They had spent tens of millions of dollars but there were no signs that any progress was being made.
If you look at it on paper, BAR is not in a very healthy state. In the latest published accounts, up to November 2001, show the company carrying debts of around $150m.
But Richards is not too worried about that.
"I think that there is a general understanding amongst the shareholders that they are not going to get a return on that money," he says. "That was a situation that they got themselves into through naivete and it is not fixable. All we can do now is effectively start with a clean sheet of paper and say: "Right, from here on we are going to be an efficient organization that delivers to its promises". I have set myself very clear budget targets over the next four years and I have said: "That is what I need to do the job and this is what I can deliver". They are not straightforward targets and given the current economic environment it is not going to be easy for anyone.
"Nevertheless we think we can do it."
Unlike many of the F1 team bosses, Richards is not a shareholder in the team he runs and he is very clear as to why.
"Would you want to own a Formula 1 team today with all the obligations and liabilities that currently exist?" he asks. "I would suggest to you that this year there will not be a positive financial result from a Formula 1 team. We (Prodrive) are appropriately rewarded for the management function that we fulfil and we have an agreement with BAT for the longer term and that is as far as I am prepared to say. It is a conventional commercial agreement."
But he will not say more.
"British American Tobacco could remain a shareholder in this business for ever more and it may just be that they see it as a solid investment. It might be that in the long term - in 10 years - they could recoup their losses by hanging on in there. I would very much like to see that being the case because they have been very honorable towards the situation to date. They may have to remove themselves as a sponsor in 2006 but that does not stop them continuing as an investor."
A year after taking on his role with the team Richards has had the chance to do a lot. The impression that has been created (very carefully) is that things are moving in the right direction at BAR.
But is that the reality?
"I would say that as an over-riding thing we are on target for what was always going to be a three-year plan to take the team to a competitive state," he says. "Nothing has been a great surprise but on the other hand the enormity of the task has been quite significant. Until you actually do it you do not realize how basic lots of the things are that needed to be done. The individual elements might have been there but until you know what you don't know you cannot fix it. The group of people at BAR had a wonderful dream and a very simplistic goal but they had no inclination of how to achieve it other than the view that if you threw more money and more people at it, it would somehow come right at the end of the day. That is not an indictment of the people themselves. It was purely the leadership and the way it was put together. I think they did not know what they did not know."
The thing that Richards finds frustrating in F1 is that the teams cannot unite and work together for the good of the sport.
"If I am totally honest about the F1 environment the thing that frustrates me is this confrontational approach to solving problems and making things better." he says. "Everywhere I have worked, in every area whether it is business or in World Rally Championship, I have always found that a collective approach, proper partnerships and proper cooperation is by far the most successful way forward. In most circumstances 95% of people's goals are shared goals. It is only five percent that you need to concentrate on and have any conflict around. An environment has been created in F1 which has allowed the situation to fester. It might be good for certain people to have this happen and it might work in some situations but I do not think it is for the good of everybody. The problem is that to change that situation is a slow process. Changing a culture is the slowest process in any organization."
The dynamics of personalities is obviously a subject to which Richards warms.
"It is very interesting," he says, "and in my company it has led to some fairly bold decisions. I have been known to take people out completely because that individual is influencing the way a whole group thinks and works. I had to make some decisions like that at BAR. These are talented people with enormous contributions to make but they cannot be pointed in the right direction. They will not allow themselves to be. It is frustrating not to be able to get those people thinking in the same way that I think is appropriate.
"I want a people who are willing to share responsibilities and get away from the blame culture and work together to build up a proper team environment. Teams spend so much money on motor cars and the technical things looking for tenths of seconds and sometimes even hundredths and yet I still believe that the mental approach of the driver on the day is significantly underrated as to what can be achieved.
"And the mental attitude of a driver is a result of the entire attitude of the team around him. You only have to look at Ferrari and the confidence - almost arrogance - that the team now has. They are totally reassured. They are totally comfortable with themselves. They are not afraid to fail and not afraid to take risks. They know how to win. If you look at other teams you do not seem the same aura. It is a team that does not seem to have any politics. If you look back 10 years Ferrari was beset by politics and I never thought Jean Todt would get out of it, but somehow he solved it all."
The question of mental attitudes brings the conversation around to one problem which Richards still has to solve: Jacques Villeneuve.
"If it is not solvable," he says, "it is not solvable. Individuals have to realize their responsibilities to the team and to the people around them. They cannot just be individuals. There are some people with extraordinary talent who are irreplaceable - but there are not many of them."
Is Villeneuve one?
"I think we will find out this year," Richards says, without a pause. "I have a lot of time for Jacques despite all the talk there is of conflict. But I won't even waste my time denying there things that must be resolved. I think he is one of the great iconic figures in F1 today, not because of his driving but because of the way he is prepared to stand up - right or wrong - and have a view. I think is laudable.
"I disagree completely with his views that he is just one individual. That is where Michael Schumacher stands out above everyone else in the way he works with the team and motivates the team. He is part of it. I have seen very few other drivers in all the time I have worked in motor racing who have had that same credibility. I don't think you can have it as a young person. I think it takes time to create that aura around you that makes people follow you that brings respect."
Whatever happens this year if Villeneuve is going to stay on at BAR in 2004, he is going to have to take a massive pay cut. Budgets are going to come down in F1 and Richards says that his team has already seen the writing on the wall.
"At BAR we are looking at a very different business model in the long term than we are now," he says. "With a renegotiated Concorde Agreement we anticipate receiving one third of revenues from TV, a third of the revenues from conventional sponsorship and another third from alternative sources - new business if you like.
"As an example, we are already only a few weeks after the regulations were changed and our electronics group is already looking at alternative uses for the electronics we have developed to see if it can be used elsewhere. Testing may be the best way to make an F1 car go quicker but simulation technologies are far more relevant to the motor car industry than anything using up tyres on a circuit in Spain with no-one watching."
These are philosophical issues but ones which are causing so much trouble in F1 at the moment.
"Do we look for relevance to the industry or do we accept the argument that F1 is irrelevant," he says. "We might take the view that one of the appeals of F1 is that it has no bearing on everyday life and so we should not seek to constrain it in that way. The one thing about F1 that sets it apart is that it is regarded as the pinnacle of the sport from the technology view. This at odds with the entertainment that the public and the TV audience demand but we could kill the golden goose if we are not careful. This is where we have the two poles: on the one hand you have the Ron Dennis argument that we should have total freedom and at the opposite extreme you have the smaller teams and Max Mosley who are saying nobody can afford it.
"The person who is probably the best arbiter in this is Bernie Ecclestone because he understands what the audience wants. Formula 1 has to be entertaining but without the image that the sport it is no good. Formula Ford is entertainment but it does not have the glamorous image. We have to be careful when going down the route of cost-saving and reducing technology that we do not lose the whole aura that is F1.
"I believe the primary goal is to have an entertaining spectacle and I think that maybe the engineers have been able to get a little too close to the piggy bank. They should not be running the show because they have a very narrow view of things and - laudable though it is, because that is what makes the cars go fast - the primary goal is to provide an entertaining series. The second element is the technology challenge which sets the image and the high level of purity. The thing that disrupts this is that the amount of money applied will dictate who is fastest if that money is spent sensibly. There are no two ways about that. The people who get the most money get the most results and the most sponsorship. I think that maybe we should have a complete rethink about the distribution of the money - and that would level the playing field."
Richards does not believe that there is a role for the manufacturers in the running of the sport - and he is not backing in coming forward about it.
"I think you have got to be very careful," he says. "There is a fine line that championships have to tread between steering their own path and the course that is appropriate for the championship and kowtowing to the manufacturers. They have a very clear marketing objectives in their participation and you cannot ignore that. But at the same time you have to be very clear and firm.
"I think that the worst custodians for the sport would be car manufacturers. I just don't think they are the right people. It is no slight to them but there objectives in motorsport are no more than ancillary to their purpose in life, which is to make motor cars and sell them to the general public. If motorsport wishes to fulfil a role for motor manufacturers it has to be far more transparent about the way it is managed. It has to be far more disciplined in the way it sets its regulations and adheres to them and it has to listen to all these issues."
But the politics is not the passion of the sport and Richards has a very clear goal in F1. He wants to win.
"I have said to my family that I will spend the next four years getting this team working and then I will take another direction in my life," he says. "At the moment I am totally fixed on making he team work. It may seem strange for someone who runs a business with such clear strategic aims but in my personal life I tend to look at relatively short term goals. I suppose I am a bit of a fatalist in some ways."
But with so much going on and so many different projects on the go, is Richards not spreading himself a little too thin?
"There have been the occasional weekend when I would rather have been at home and have had a Sunday lunch with the kids and there are times when I don't like getting up on a cold winter morning at five o'clock. I would rather stay in bed. But overall I am pretty comfortable with the way it works."