Sochi – well, here we are then…

Never thought it would go ahead until, that is, I saw the first images of the circuit set-up. And now, here we are in October and post Ukraine it’s almost upon us and appears to be going ahead as planned (10-12th) minus controversy. Well, troubles elsewhere are keeping the press busy.

The Sochi Autodrom – in Krasnodar Krai, Russia and another circuit designed by Formula One architect, Hermann Tilke – features 18 corners across 5.8 kilometres and will host round 16 of the 2014 World Championship. It’s an interesting layout with a good mix of high speed corners and technical sections.

Sebastian Vettel was the first F1 driver to lap the circuit and you can see an onboard video of his lap here.

Pointless me posting images when you can see them all here.

A sad day for F1

Poor Jules Bianchi. The odds against this immensely liked driver going off at the same spot in Suzuka as Adrian Sutil must have been phenomenal. The weather had just turned for the worst. The signs are at least encouraging post operation.

And now news that former F1 driver Andrea de Cesaris has been killed in a bike crash in Rome, aged only 55. Tragic.

In 1982, aged 22, de Cesaris became the then youngest driver to start a Grand Prix from the front of the grid after he took his sole career pole, the same year a young Clive Couldwell first started reporting on F1.

F1 driver moves

So then, at long last, Fernando Alonso is parting from Ferrari which has a lot to thank him for, making it look like a half decent team despite the politics and engineering disaster that has been this season.

Goodness knows what Vettel will be able to do. After a dismal season this year at Red Bull I do wonder what he can contribute to the team without a thorough overhaul of the operation which one assumes is quietly underway…

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One also assumes, reading between the lines of comments made recently by Ron Dennis and the talented Eric Boullier, that Alonso will be heading over to McLaren to work with next year’s Honda engines and poor old Jenson Alexander Lyons Button is out, sadly in my view.

Prepare yourselves for a game of musical chairs over the next few weeks..

Personally, I think Alonso could end up at Red Bull. Even though Red Bull has not been too happy with its engine supplier of late, Alonso won two championships with Renault, so could add value to the relationship. One might also argue that the Honda technology for next season’s McLaren may not be good enough to win races and Alonso is not getting any younger.

It’s difficult. If I was Alonso, I’d take the Red Bull option…

The exit of Mr Ferrari

There are two compelling questions raised by the exit of Ferrari’s long-time chairman, Luca Cordero di Montezemolo. The first is: Did Montezemolo fail with Ferrari, and if so, why?

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It is hard to speak of failure when, in the last 23 years, Montezemolo helped Ferrari win 13 world championships and made the Prancing Horse the “most powerful brand in the world” (Source: BrandFinance). In doing so, he increased its car sales, royalties and technological excellence exponentially.

Montezemolo himself has responded to past criticisms of poor racing results by reminding critics that Ferrari is – commercially speaking – an extremely successful company. So why let him go?

Sales are not, and never were, a real issue for Ferrari. Even in previously turbulent times, such as the 90s (where racing results were also lacking), Ferrari sold everything that it produced.

Indeed, management research shows that company status is more resilient than most people believe, and it might take decades before negative results in races end up corroding the shiny appeal of Ferrari’s road cars and related merchandise. In other words, while racing results might influence sales, their impact is lagged in time with a considerable delay of several years.

So why would a top manager be unable to repeat his former success? Management researchers often quote the ancient Greek word of hubris, an individual feeling of extreme pride or self-confidence which creates a systematic bias in underestimating the challenges ahead, or overestimating his/her own possibilities of hitting targets.

Cass Business School's Dr Paolo Aversa

Cass Business School’s Dr Paolo Aversa

Says Dr Paolo Aversa, Assistant Professor of Strategy at Oxford’s Cass Business School: “If we look at Montezemolo’s public life through this lens, we notice how he practically left Ferrari years ago when he turned his active leadership into a representative one. In his early days at Ferrari, Montezemolo started his career at the pitwall, where he applied his extraordinary management qualities to trigger an amazing strategic turnaround for Ferrari as both a car manufacturer and racing team.

“Montezemolo excelled as a manager when applying a very hands-on and active leadership. However, in recent years, he changed his leadership style from active to representative and spread himself too thin through a series of business, political, and social ventures. Rather than applying his skills to the task, he used his successful personal brand to endorse various and mildly-related initiatives. This is a typical sign of hubris and even exceptional performers cannot compensate for the lack of time when they are actively in charge of such an exorbitant number of high-profile activities.

“As a result, some of Montezemolo’s outside interests are clearly struggling and underperforming compared to their initial expectations – see among others the civic and political think tank Italia Futura and the high-speed train Italo. Similarly, a few months ago, Montezemolo took the decision to quickly turn around the negative performance of Scuderia Ferrari by replacing Stefano Domenicali with Marco Mattiacci. Installing a leader who lacks a racing background – and who might need years to acquire the right skills to trigger a turnaround – clearly demonstrates Montezemolo’s complete detachment from the reality of the F1 competitions he once knew how to navigate well.”

The second critical question to ask is: Will Montezemolo’s exit help Ferrari get back to winning days?

Montezemolo’s departure creates the right opportunity for a new leader to step-in at Maranello, and leaves space for a leader who can devote more time and commitment to the non-trivial task of putting Ferrari back on pole. Sergio Marchionne’s leadership is a necessary, transitory phase, motivated by another non-racing goal: the upcoming flotation on the Wall Street stock market of FCA Group.

Adds Aversa: “But in the long-run Ferrari will need to integrate a full-time, committed leader, possibly someone with long-term technical experience in the racing world if F1 victories are the real goal (Ross Brawn could be a good contender). Winning Formula 1 is far too complicated to be achieved with representative leadership, motivational speeches and random show-ups at races. But unfortunately for Montezemolo he might have realised this a little too late.”

How much do F1 drivers earn

Well, now we know thanks to the Business Book GP2014 and reported on TomorrowNewsF1.com:

Drivers:

1. Fernando Alonso Ferrari – €22m
= Kimi Raikkonen Ferrari – €22m
=Sebastian Vettel Red Bull Racing – €22m
4. Lewis Hamilton Mercedes – €20m
5. Jenson Button McLaren-Mercedes – €16m
6. Nico Rosberg Mercedes – €12m
7. Felipe Massa Williams – €4m
= Nico Hulkenberg Force India F1 – €4m
9. Romain Grosjean Lotus F1 Team – €3m
= Pastor Maldonado Lotus F1 Team – €3m
= Sergio Perez Force India F1 – €3m
12. Adrian Sutil Sauber – €2m
13. Kevin Magnuseen McLaren-Mercedes – €1m
= Valtteri Bottas Williams – €1m
15. Daniel Ricciardo Red Bull Racing – €750,000
= Jean-Eric Vergne Scuderia Toro Rosso – €750,000
17. Jules Bianchi Marussia – €500,000
18. Esteban Gutierrez Sauber – €400,000
19. Daniil Kvyat Scuderia Toro Rosso – €250,000
20. Max Chilton Marussia – €200,000
21. Marcus Ericsson Caterham F1 – €150,000
= Kamui Kobayshi Caterham F1 – €150,000

What the F1 teams spent on drivers in 2014:

1. Ferrari – €44m
2. Mercedes – €32m
3. Red Bull Racing – €22.75m
4. McLaren-Mercedes – €17m
5. Force India – €7m
6. Lotus F1 team – €6m
7. Williams – €5m
8. Sauber – €2.4m
9. Scuderia Toro Rosso – €1m
10. Marussia – €700,000
11. Caterham – €300,000

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