Mercedes bringing James Allison back into the Formula 1 front line, with Mike Elliott moving in the other direction, is a timely warning of the difficulty of succession planning. And it’s one team principal Toto Wolff will do well to heed.
The question of Wolff’s future as Mercedes team principal and CEO has flared up regularly in recent years. There was talk of him standing down at the end of 2020 before he signed a new deal to stay in the position for at least the next three years, so to the end of this year, and he has indicated he has no plans to go anywhere yet.
“I really enjoy being the team principal, I think I can contribute,” said Wolff. “But if one day I come to the conclusion, or people that are close to me are going to tell me, that I’m not, then I will consider giving the baton to somebody else.
“I would have no shame, and then I’ll criticise from the sidelines, from a TV screen, and will know better! But until then, I still have fun doing it. And obviously, turning a ship around after so many successful years, that’s a really a good challenge. Enjoyable.”
While it’s doubtful that Wolff really is enjoying the current situation of the team, that he relishes the challenge is more believable. He’s certainly going to be there for a good while yet, something that is underscored by the fact that he now owns one-third of the team (with Daimler and INEOS being the other, equal, partners). But there will inevitably come a time when he must pass the baton on before he drops it.
This day might be a long way away, but Wolff has always had succession planning in mind. He’s been at pains to ensure that there are opportunities for those in key leadership roles within the team to become part of his inner circle. James Vowles, who left to become Williams team principal, was one of those.
When he left, Wolff also cited communications director Bradley Lord as a key part of that group. Mercedes has also added to that group recently, with Jerome d’Ambrosio coming in to pick up some aspects of Vowles’s job in terms of dealing with young drivers. There will be valued lieutenants, some with leadership potential, throughout the organisation.
There’s also a strong emphasis on pathways to advancement. Wolff has never appeared to be someone who would grimly hold onto his role at the helm of the F1 team beyond the right time and has been conscious that it might have been far shorter than it has been. He became team principal in 2013, meaning he is now in his 11th year, and was clearly open to the idea of that tenure not lasting so long. So this is a scenario he’ll have been turning over in his mind one way or another for a long time in order to ensure the moment is prepared for.
The situation with the technical leadership handover not working as hoped – and no matter what spin is put on it, swapping Allison and Elliott’s roles emphatically reflects that this has not been as successful as expected – is a reminder of how difficult this is. The best-laid succession plans, the most logical, coherent and well-executed ones, don’t always work out.
Wolff is a great student of business management, so much so that through Harvard Business School he’s also an educator on the topic. He will have treated this as a learning experience and it will have underlined just how difficult it is to plan for handovers of power.
Promoting a ‘number two’ ticks so many boxes as it offers continuity, familiarity and the lure of a seamless transfer of power. But often, these don’t work out as planned. That’s not just because a brilliant number two or department head doesn’t always have the ideal skillset, but also because the new boss is never the same as the old boss.
Trying to replicate the magic usually just results in a pale imitation. Bring in an outsider and you guarantee a more jagged transition, so both approaches have their pros and cons. And there’s a vast continuum in-between those two extremes.
So what can Wolff learn from this in the moments when he idly turns over the topic of who should step into his shoes somewhere down the line? We can’t say. What we can be sure of is that it will have given him food for thought. He will be determined to facilitate a smooth transition but, short of being able to appoint a clone of himself, new leadership has to be in some ways different.
Often, the famous ‘Peter Principle’ is applied to these situations, the idea that individuals will be promoted to the next level up until they reach the point where they are no longer competent. It’s a problematic perception, one rooted in the reductive notion that higher in the hierarchy automatically means better, more intelligent or more valuable.
The reality is that outside the self-mythologising of high-earning executives, every role plays its part and it’s about putting the right individuals in the right places, rather than some overly-simplistic idea of a linear correlation between what’s perceived as ability and seniority.
You could argue that Elliott effectively getting a promotion because he hasn’t worked out as technical director is a classic bit of moving a problem upstairs, but it may be that he is absolutely better suited to the broader remit of that job.
So this is a more delicate challenge for Wolff. There’s no by-the-book way to do this, so when it comes to the next leader of the Mercedes F1 team, and the timing of making a change, it’s going to be a big test.
Fortunately, this isn’t an immediate problem and Wolff is set to continue for the long haul. But when the time comes, you can be sure the lessons of the technical leadership handover will have provided a useful case study.