Reading an article at Autosport about Ferrari’s concern over a budget cap and the increased number of races on the F1 calendar, I am reminded of the changes F1 has experienced since 2013. In particular, it’s de-evolution.
Formula 1, for most of my life, has been about maximizing. Maximizing performance, talent, process, design, technology, speed, component-level weight reduction, regulatory interpretation, image, brand awareness, viewership, broadcast penetration, sponsorship, revenue, team training, key-person acquisition and much more. Maximize it all!
Since 2013, the series has taken a much different approach that seems almost antithetical to everything it pursued before. Instead of maximizing, it seems intent on minimizing.
Minimized budgets—via a new budget cap of $175M proposed—to reduce cost, tire performance, sponsorship (not desired but a reality), speed, fuel usage, testing (and now a call for even more limited testing), component-level innovation (with calls for spec parts), viewership (not desired but pay-TV and less free-to-air options have ushered in fewer viewers as has the lack of excitement the sport creates), revenue (with calls for redistribution of prize money and the increased operating costs of F1 reducing the total prize fund), on-track action through regulatory micromanagement of the regulations minimizing action-packed racing, number of teams (after bankrupting three teams due to high engine-supply costs), driver age and experience, total team personnel (via the proposed budget cap), marketing and sponsorship, and much more.
MP3? That’s so 90’s!
What we are looking at is the MP3 version of Formula 1. If you’re an audio nerd, you’ll know that MP3 compression rates work on a basic principle of how much can we remove from the original song without making it too noticeable in the reduction of quality. F1 used to be more akin to a FLAC or lossless audio format, to continue the analogy to the point of ludicrous proportions.
In the article I referenced above, Ferrari are concerned about increasing the cost demand of 22-24 races per season while still reducing the team budget to $175M via a cost cap concept. The idea of running 24 races puts a burden on people and resources and creates a serious drain on resources as Ferrari boss Mattia Binotto points out:
“I think as a team we want to make sure you’re keeping your people in the future, [so] you need to really try to manage the effort throughout the season, so in the end, it will have a big impact.
“It will have a big impact from the number of people, it will have a big impact logistically, because you need to somehow manage the transport of all the parts.
“So it’s not easy, and there’s very little time to organise ourselves as well, because increasing the number of people is not something you do easily, [and doing so] using the budget cap.
“So here is the risk, because you may not [be able to] afford the right number of people simply because you need to manage extra salaries [under the budget cap]. Not an easy one.”
He goes on to discuss testing and though he thinks the call for reducing testing will still work, I tend to listen to his words closely here:
“[In the past] the shakedown of the new car normally was early January, then you got a couple of months before starting the season.
“Now you’ve got two weeks and then you go straight to Australia – whatever problem you’ve got in the two weeks, you will not fix them for the first race.
“So I think that today that it’s really winter testing where you start to shake down your car, you will know the initial problems, you will know the initial behaviours, but you never have time to address whatever big problems you will have before the start of the season.
“That’s why we are all developing internal facilities – benches, simulator, whatever it is, without waiting for track time, to get developing your car at its best, before you’re starting the season.”
For me, the lack of testing and this notion of now canceling Friday Free Practice is all meant to stump teams, catch them off guard in order to make the proceeding event, whether the season or race Sunday, a more random and unknown spectacle. Minimize data and information.
Binotto is right, limited testing means you can’t get on top of your deficiencies quick enough and have to hobble through a good portion of the season with a handicap. Equally, no Friday Free Practice is intended to catch teams off guard and not give enough time for them to cure their setup issues and the thought here is that it will make Sunday’s race more random. Again, reduction, minimizing and de-evolution. The MP3 weekend. How much of F1 can we remove and still have it be F1?
But sustainability creates innovation, right?
F1 has fallen prey to the conundrum of sustainability unhinged from innovation. Today’s most high-end washing machine is less effective at cleaning your clothes than a low-end model 10 years ago. Our desire to create a more efficient washing machine has outrun our innovation curve of actually creating a more efficient washing machine that cleans clothes better while using half the energy to do so.
F1 is no washing machine but you get my point, it has fenced itself in to a reducing mentality and the innovation required to achieve the same level of performance that a maximizing mentality begat is difficult and extremely costly. Think of the amount of money spent with this current regulation set to get back to the lap times the cars were achieving in 2013.
There is a strong and pervasive notion that this reduced or minimized approach stimulates innovation and competitiveness. Reading Harvard Business Review, I have seen comments that suggest there is not a single empirical analysis that lends convincing support to this view in the business world. Several studies actually offer evidence to the contrary.
In the end, activities driven primarily by shareholder value and those driven by regulations, liabilities, and public expectations can often differ greatly. F1 is making sweeping changes that sometimes seems born from a reductionist approach and can seemingly be devoid of a wholistic approach. F1 is more than just the sum of its parts and that not only applies to its cars but the sport as a whole.
One of F1’s bigger weaknesses has been its lack of foreseeing the knock-on effects of its decisions whether regulatory, safety or sustainability. It has lacked to clarity of foresight or been unable to engage in effective backcasting to prevent its actions from having a negative impact in many cases.
That’s not to say they haven’t gotten it right on many occasions too. Safety chief amongst them. It is, however, what I tend to think of pragmatism run amok. It’s been that way for quite a while and perhaps going forward with all of these plans to cut costs, retain hybrid engines, increase the number of races and cost caps, F1 could try being prudent more than pragmatic because pragmatism is not a very good philosophy in many cases and makes a crappy audio format.
Hat Tip: Autosport