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Keeping a winning career
Ron Dennis was about 12 years old when he had his epiphany. The boy who would become one of the dominant figures in motor-racing was sitting with his older brother in their house in Woking, Surrey, watching a performer on television.
- By Roger Blitz, Financial Times
- Published: 23:04 February 10, 2009
Ron Dennis was about 12 years old when he had his epiphany. The boy who would become one of the dominant figures in motor-racing was sitting with his older brother in their house in Woking, Surrey, watching a performer on television.
"If I wanted to, and put my mind to it, I could do that," Ron announced. His brother laughed hysterically.
For anyone else, such a fraternal slight would have been quickly forgotten. But 40 years on, Dennis can still recall the pain he felt with crystal clarity. "It is still a spur," he says.
Today he is still in Woking, though his surroundings are rather different.
He is in his expansive office at the McLaren Technology Centre, a stunning Norman Foster-designed complex employing 1,300 people, most of whom work on the core mission to help Lewis Hamilton retain the Formula One world driver's championship he won in dramatic style in November.
Dennis will be in the McLaren pits offering advice to his protégé when the F1 season begins in Melbourne next month, but he will not be giving instructions.
After 42 years in the sport, during which he has chaperoned some of F1's greatest drivers to 10 world drivers' championships and guided the McLaren team to more than 138 grand prix triumphs, he announced last month he was stepping down as team principal to become chairman and chief executive.
"Sitting on the pit wall was just becoming more and more inappropriate," says the McLaren boss.
He got his break in motor racing when, as an 18-year-old car technology student at the old car racing company Coopers, he was asked to fly to Mexico to help prepare the Cooper-Maserati car for the Mexican grand prix. He had never been abroad, in fact had barely stepped foot outside Woking.
Now, after a life spent in the jet-set world of F1, he will shift his focus to the business of the McLaren Group, which includes divisions devoted to luxury car manufacturing, electronics and applied technology.
"I have a lot of responsibility in the group now, the group is growing, and we are about to push the group forward. I am an absolute believer that change creates opportunity," says Dennis, who retains a 15 per cent share of the company.
These are roles he has been developing since he became co-owner in 1980. "I don't call myself self-trained but I do spend a lot of time trying to get better," he says.
Along with the other owners - Daimler, Bahrain Mumtalakat, a holding company owned by the kingdom, and Saudi Arabia-born entrepreneur Mansour Ojjeh - Dennis has big plans to begin volume production of luxury sports cars, and float that business.
McLaren has held only a tiny share of this market, leaving the field clear to its great F1 rival, Ferrari. But, in spite of the downturn, McLaren judges it timely to make serious inroads into a market that even Dennis predicts will decline overall by half by 2011. The owners are willing to fund an investment package of £250 million (Dh1.32 billion) and have instructed bankers to approach other investors.
It is the kind of entrepreneurial risk-taking that was a hallmark of Dennis's F1 career, a trait he is keen to highlight. "I am embracing this recession in a positive way," he says. "We are going to power through it." He repeats that phrase half-a-dozen times during the course of the interview.
Describing himself as a workaholic - "I only have every other weekend off" - he makes much of focusing on both the large and the small. "I don't want to be egotistical, but people know very well I have a phenomenal attention to detail, yet I pride myself on looking at the big picture."
He offers, for example, an elaborate explanation for why we should invest through a crisis: "Look at how research accelerates in a war. All the space programme came out of war. In the end, mankind will populate other planets in the universe.
When that happens - and it has to happen - you can go all the way back to the very fundamental seedcorn moment. It was because of war.
"Everything that hits you in life, both private and corporate, is a change. We [McLaren] will not change our programme other than have greater financial prudence. You have to power through the recession. Now is the time."
Defeat hurts him deeply, such that observers have described seeing him in physical pain at the end of grand prix. One of his oft-repeated phrases is "second place is first of the losers".
His emotions get the better of him sometimes, most evidently during "Spygate", the 2007 espionage crisis that saw McLaren accused of stealing information from Ferrari and resulted in a fine of $100m. In the heat of the crisis, Hamilton and co-driver Fernando Alonso came in first and second at the Italian grand prix in Monza, Ferrari's backyard.
The McLaren boss was in tears.
Dennis had planned to step down two years ago but did not want to close his career under the cloud of Spygate. Hamilton's title triumph is a more fitting climax, but F1's financial turmoil presents him with a new opportunity.
Honda's shock withdrawal from F1 in December focused the minds of all its practitioners on how to cut costs, which in McLaren's case last year reached $400m. The sport is being rescued by a package of savings agreed by teams, with McLaren a prime mover, and that gives people like Dennis more power over the sport in the long run. "When it comes to our business, we are the people who have to decide what is best for our business," he says.
The FIA, the sport's regulator led by Max Mosley, wants greater savings, but McLaren has much to lose if its technological advantage is narrowed by rules that encourage standardised car parts. "Yes, you're going to trim in a recession, but you can't trim it to nothing. You can't turn [technology] on and off like a light switch. It takes you years to get competitive."
In the short term, new rules that encourage overtaking may make F1 look more attractive to TV viewers, he suggests, though sponsors will be slow to renew and a prolonged downturn will force teams to cut costs further.
"Until three months ago, our ambition was to take the business from a valuation of £650 million in 2007 to £1.25 billion in 2012. This climate has definitely thrown a glitch into that."
But Ron Dennis will not be denied. The cars will be no slower than last year, he believes, and history shows that changes to F1 regulations have little effect on the pecking order. McLaren will be in the thick of this year's championship and, even if Dennis is not making the calls in the race, the talent he brought into the business will.
"There is no magic or mystery about F1," he says. "The same maths apply, income needs to exceed expenditure, it's as simple as that. The nature of grand prix is they are run by fairly competitive people who want to succeed and their cars to win."
- Ron Dennis, Chief executive and chairman of the McLaren Group, at the McLaren Technology Centre in Woking, UK.
Four rules for successNo one could accuse Ron Dennis of hiding his views. People who know him say he rules McLaren with a rod of iron. He recruits, and delegates to, the best technicians in the world and attracts respect rather than affection on the F1 circuit. He identifies four principles that have guided him in his career.
1. Attention to detail - something he inherited from his mother, who set high standards at home. During an industrial tribunal in January brought against him by a former employee - later dropped - he said his friends believed he suffered from obsessive compulsive disorder. "The old carpenter's adage is you measure twice and cut once," he says.
2 Staff must believe in an organisation's values and approach - that if you cut McLaren people, they bleed McLaren.
3 You need a clean desk policy - an awareness of one's workload.
4 Timing in decision-making is critical. "You don't pick up a piece of paper and make a decision. You may ask for more information in order to make a better-qualified decision. On the other hand, if you wait much later, you could go wrong and the decision ends up costing you more."
- Financial Times
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