Formula 1 is renowned for being a playground for billionaires and blue-chip brands. Over the past five years the championship has been won by energy drinks giant Red Bull and German car manufacturer Mercedes, so you wouldn’t expect a family-owned team would stand a chance of success. However, one hasn’t just stood its ground – it has beaten the goliaths at their own game.
With nine championships under its belt, British outfit Williams is the second-most successful team in F1. Some of racing’s most famous names, including Damon Hill and Nigel Mansell, have steered the team to success and built it up into one of F1’s powerhouses. It started with just 17 people in 1977, but now has more than 600. One thing that hasn’t changed is the control of the company which is still in the hands of co-founder Sir Frank Williams.
He is boss of his eponymous team and set it up with its former engineering director Patrick Head. In addition to sitting in the business driving seat, Sir Frank also has a 52 per cent stake, but it is more than just an owner-managed business. Sir Frank’s daughter Claire is the deputy team principal, which makes Williams a family business and this differentiates it from most of the other outfits in the sport.
A family-owned business can often lead to a more comfortable and cohesive working environment for employees, compared with a more corporate structure
“Every team in the paddock has its own characteristics that set it apart and for Williams it’s the family element that gives us our USP,” says Claire. “We have grown to over 600 people, but we have still managed to retain a family-run feel, which is aided significantly by having inter-generational family members leading the organisation. This enables the core values of Williams to filter throughout the business.
“Since Williams was born in 1977, the family has been at the heart of the team and that has created a unique atmosphere for those who work here. I have always felt that a family-owned business can often lead to a more comfortable and cohesive working environment for employees, compared with a more corporate structure.”
They say that blood is thicker than water and Williams’ resolve has been put to the test over the past decade.
Williams last won the world championship in 1997 and by 2006 the team had slipped to eighth in the standings, unable consistently to challenge old rivals Ferrari and McLaren, and swamped by emerging manufacturers BMW, Honda and Toyota.
Worse was yet to come for the former champions as the team hit a record low in 2011, finishing ninth in the constructors’ standings with just five points.
A win for Pastor Maldonado at Barcelona in 2012, the team’s first since Brazil eight years earlier, proved a false dawn and Williams suffered its toughest season yet in 2013, scoring points on just two occasions. Since then it has taken decisive steps to turn its performance around.
The first came when Claire was promoted from marketing director into the role of deputy team principal. She knows the team from the ground up and soon put this knowledge to good use. Three months later she was joined on the board by Williams’ new chief executive Mike O’Driscoll, the skilled former managing director of luxury car manufacturer Jaguar.
To boost its chances on the track it paired existing young driver Valtteri Bottas with the experienced Felipe Massa, an 11-time grand prix winner with Ferrari and very nearly champion in 2008, when he missed out on the title to Lewis Hamilton by a single point.
Bottas, a product of Williams’ young driver programme, debuted with the team during its difficult 2013 campaign. The Finn had two victories under his belt at the prestigious Masters of Formula 3 and won the 2011 title in F1 feeder series GP3. Bottas has impressed since graduating to F1 and has claimed seven podium finishes since 2014. He was even touted for a drive at Ferrari for next season before the Italian team opted to retain his compatriot Kimi Raikkonen.
However, Williams needed more than new drivers to complete its turnaround. Chief executive O’Driscoll also made a significant appointment to Williams’ engineering department in July 2013 when Pat Symonds, who has worked on four championship-winning F1 cars, became the team’s chief technical officer.
It was too late for Symonds to have an impact on the 2013 car so instead he focused his attention on the following year. This offered greater opportunity for improvement as F1’s 2.4-litre V8 engines were replaced with more environmentally friendly 1.6-litre V6 turbos.
It levelled the playing field as none of the teams had experience of the new engines. Williams chose to get theirs from Mercedes and it was a smart move as the engine has dominated the grid. In 2014 it powered Williams to third place where it currently remains ahead of better-funded rivals, including Red Bull Racing and McLaren, another bastion of British engineering.
Williams’ budget comprises prize money and sponsorship in almost equal amounts, and its accounts for the year-ending December 31, 2013 show a net profit of £12 million on revenue of £130.4 million. It has 32 per cent less than the budget of McLaren and around half that of Red Bull’s F1 parent company.
The family-owned team’s turnaround could have easily stalled if its management hadn’t been so level headed. Claire says the biggest challenge of managing the business you own is trying to ensure that your emotions do not overtake rational, strategic decision-making.
Our independent status has traditionally endeared us to fans and the popular appeal of the Williams name is an asset that attracts corporate partners
“That is particularly the case when managing a sports team where emotion is heightened because of the nature of what we do,” she says. “I am so deeply connected with this business and have so much history with it, but there are times when you need to separate that emotion out of your day-to-day work. Formula 1 is a fiercely competitive business and there are times when tough decisions have to be made.”
It hasn’t just paid off on the track as being a family-owned and managed business gives sponsors comfort that their money is not being absorbed by a multi-national owner which doesn’t really need it.
Williams has secured more new sponsorship than any other team in F1 over the past year with its tally of new partners coming to an estimated $54.5 million. It includes Brazilian oil company Petrobras, Unilever’s deodorant brand Rexona and British Telecom. They are crowned by drinks brand Martini which became the team’s title sponsor in 2014.
“We find that being a family-run business can be a strong, appealing factor for some brands, and indeed a number of our partners chose us because of the unique feel of the team and what we stand for. Our independent status has also traditionally endeared us to fans and the popular appeal of the Williams name is another asset that attracts corporate partners,” Claire says.
Williams also benefits from transparency as it became the only listed F1 team in 2011 when a total of 20 per cent of its shares were floated on Frankfurt’s junior exchange. “A specific benefit is the transparency it gives the company which is attractive to commercial partners,” she says. Sir Frank’s 52 per cent stake gives him control while 3 per cent is held by an employee trust, 5 per cent is in the hands of former director Toto Wolff and 20 per cent is split equally between Head and American investor Brad Hollinger.
Perhaps the biggest threat to the future of any family business is succession. Sir Frank is 73 and has been wheelchair-bound after a severe car accident in 1986. Although Claire is in pole position to succeed him, it remains to be seen if this will happen.
“Ultimately there will come a time when Frank is no longer with us and we need to think about the options available, but in my mind I would love to keep Williams as a family-run business for many generations to come. That would be a fantastic story to tell,” she says.
“Having said that, this only works if you have the right people to run the business, and you need to put the company’s longevity and business interests first. If a family member is not the right person to lead the business going forward, then they need to step aside. Because of the competitive nature of Formula 1 in particular, if you are not up to the job then you will be shown up very quickly in a very public way.”
Claire adds that Williams’ growth has given it a significant safety net. “While we still have family members at the top of the organisation, we have a very professional team of senior people around us with vast industry experience,” she says. “Moreover, the Williams ‘family’ has become much bigger than those with direct blood ties. Everyone who joins the company also joins the family and we work hard to keep that unique sense of collegiality going.” That’s a real formula for success.