Wednesday 26 July 2017

Formulas for success in the fast lane

Businesses can learn from pit stops, but failing to win Le Mans was heartbreaking, ex-Toyota F1 manager Richard Cregan tells John Reynolds

Richard Cregan
Richard Cregan

John Reynolds

As I talk to former Aer Lingus technician turned Toyota Formula One manager and now businessman Richard Cregan - a Kildare native who now is based in Abu Dhabi - every few minutes we're almost drowned out by roaring engine noise from cars zooming by on the track below us.

We're meeting at a futuristic-looking hotel, above Abu Dhabi's Yas Marina F1 race circuit, around which Jaguars, Mercedes and Ferraris are blasting by at speeds of up to 150mph, and from where Cregan runs a Formula 4 team with three young drivers. His events management and motorsport consultancy, Ras Gaira, a family business run by he, his wife Patricia, daughter Jennifer and one of their sons, also has an office in the city nearby.

Son of a housewife and blacksmith-turned-bricklayer, 56-year-old Cregan took an engineering degree in Dublin's Bolton Street, where his lecturer "used to bark his philosophy, 'lightness combined with strength and durability'." Cregan said this "stuck with me - they're the fundamentals of aircraft and motorsport design".

He grew up around cars. "My very good friend Gerry McDonnell and I did rallying for years. We helped each other through different levels of motorsport, and loved every minute of it."

After applying for an apprenticeship with Aer Lingus as a technician, he spent nine years there, getting a "fantastic grounding in the engineering and technical side of the work, and in getting on with, and working with, people. The training and grounding I got there has stood to me until this day. The biggest element of that was safety. It was constantly emphasised."

Having risen through a number of ranks there, he spent a year as a consultant, working for Toyota as it competed in rallies in Africa and Europe, before moving in 1985 to its base in Cologne in Germany, where he worked for them full-time, managing its motorsport divisions that competed in rallying, then Le Mans and F1 until 2008.

"I learned so much at Toyota and enjoyed every minute there, particularly 'the Toyota Way' philosophy itself [which has 14 principles, based around continuous improvement, taking in lean manufacturing, organisational learning and continual staff development, but with various layers of management and decisions by consensus]."

His 23-year stint saw him start with a staff of just 25, and it expanded to 900 - of whom he managed about 450 - and sharing responsibility for a budget in the hundreds of millions in latter years.

The rally team had the most success, working alongside Swedish former rally driver Ove Andersson, winning four World Rally Championship drivers' titles and three constructors' titles, beating the likes of Ford and Lancia. Le Mans was more of a challenge, and the team twice failed to win the gruelling 24-hour race; in 1999 "heartbreakingly" so. Japanese driver Ukyo Katayama looked set to win, but suffered a tyre blowout in the last hour, instead finishing second. F1 was a different challenge, Cregan says. The team had its best years in 2006, with 35 points for the team's drivers and ranking sixth place in the constructors' standings; and 2008, with 56 points and in fifth place.

Having to manage 'the Toyota Way,' "by committee" and consensus increasingly became a problem, coming to a head in 2008. "We reported to different people in Japan. We tried to stabilise the reporting structure to minimise disruption when there were management changes there. We had the budget, the resources and a great team of people. I'd found someone I wanted to bring in.

"If you look at other F1 teams that are very successful, we needed a Ross Brawn type [the ex-Benetton and Ferrari technical director]. If someone of that calibre had led us, with the resources we had in Cologne, I believe we could've created a sustainable, winning future."

Did he feel he was out of his depth in his own role? "I wouldn't say that. It was a very frustrating time. Remember, we had come into this from Le Mans. We all underestimated the challenge of competing in F1. That was the major issue in the beginning. We realised we had a hugely difficult task and hadn't been realistic about the difficulty of the challenge. F1 is very different to Le Mans. It's about technology, lightness, power-to-weight ratio and so on, more significantly so than in any other motorsport.

"We scored a point in our first race in Melbourne, but it gave us a false assurance that everything was going to work. Then came the realisation that we weren't ready for the pace of development in F1. It demanded a strong, more experienced technical director to direct the team. But our orders from managers above us were to do it differently.

"In the end, we didn't have that. That was where we failed. I had to make a decision in 2008 to move on, having tried for a long time to change things, and contributed as much as I possibly could.

"You can't run an F1 team by committee and consensus. They come down to being run by one person; they need to be very strong, talented and team-oriented. F1 happens every two weeks. You have to keep improving: the car, the engine, and every element of it. If you're not doing that, it's not that you're even standing still. You're actually going backwards, because it's just so hugely competitive when you see what the other teams are doing, testing, adapting and innovating and testing again and again.

"From the first race onwards you've got to develop at that pace as well. Otherwise, by the fifth or sixth race, you're just not going to be there, having adapted as your competitors will have, let alone by the end of the year. There are tough decisions to be made at the same time: do you stop developing your current car and start work on the new one? Do you transfer resources and budgets into that?

"You can liken that to the pace of a tech startup. Technology is moving forward at such a rapid pace. If you stall for whatever reason, there's that risk you're going backwards because the industry is advancing so rapidly."

Many elements of management can't be learned from those thousands of books that have been written about it. Cregan's time at Toyota provided plenty of chances to work on F1 pit stops, getting people to work in that close proximity, under pressure and very quickly, looking closely at the dynamics of how and why people react and interact.

"I can look at a team, in a small or medium-size business, or how I look at F1, and see where there might be some easy wins that can be achieved to improve the whole dynamic. You look at how people process tasks and information and see ways to improve how they work together. It doesn't require a lot of money or resources.

"We worked on that so much in Toyota. You can train and train for pit stops, but it's interesting that a lot of that goes out the window, because the human factor takes over - the environment, the stress, the noise. It's almost like choreography in getting them to react against their instincts and in harmony, and also how to adapt in a split second when something doesn't go to plan.

"We also learned that you need people with different skillsets during different stages of a business. The tough part is recognising when they're no longer needed, whether they can follow the needs of the business or not."

The growing trend for virtual teams and short-term projects shouldn't preclude face-to-face communication when possible. Communication - even without nuances of being in a room together - becomes key, he adds.

He prefers managing multinational teams. "You get different views on everything. I've always enjoyed working with people, though I'm very tough, but very fair. Give people the resources to do their job, the direction in terms of strategy, help them achieve that and help them if they have a problem. That's what success is about." After Toyota, legendary now former F1 supremo Bernie Ecclestone asked Cregan to bring F1 to Abu Dhabi, and he oversaw the development of the €900m circuit, a management team and the race being delivered on time. His team delivered five sell-out races and surrounding events between 2009 and 2013, going on to organise the 2014 Russian Grand Prix in Sochi, which was similarly successful. "Bernie's was a huge endorsement. I got to know him as a friend. I learned a lot from him. Like me, has a strong attention to detail."

For the past few years, Cregan has been working in a consulting role with Las Vegas to bring an F1 street race to the city. If they're successful, as CEO he'll be in charge of delivering it and a festival-type week of events as he did with Abu Dhabi. New F1 owners, Irish-American billionaire John Malone's Liberty Media, are supportive, because it attracts a younger crowd. But New York, LA and Miami are also in the running. "It requires a lot of planning but it's possible. The city government, some of its businesses and some private investors are prepared to finance it. I believe Liberty is supportive of Las Vegas. They need exciting new race and events venues, and long-term partners."

Meanwhile, he's hoping to expand his F4 team to Europe or the US, and will be training new Qatari drivers. The events business run by his daughter Jennifer is looking into partnering with a European company around sports events for Europe and the Middle East. He's also interested in mentoring opportunities or getting involved in a startup or small business in Ireland. Among his other observations is the rise of self-driving 'roboracers'. "They're incredible; designed to race at up to 200mph, and you can vote with your phone to give them a powerboost." And if investors would back it, Dublin or another Irish city could host an F1 street race, or perhaps more likely, a Formula E electric car race in the near future.

Name

Richard Cregan

Position

Founder, Ras Gaira

Lives

Homes in Abu Dhabi in the United Arab Emirates; Texas, USA; and Ireland

Education

BA Engineering, Bolton Street; Dublin; Irish Management Institute

Previous experience

Technician, Aer Lingus

Senior manager, Toyota Team Europe rally team

Senior manager, Toyota Motorsport F1 team

Family

Married to Patricia, with two sons, a daughter and two grandchildren

Pastimes

Sailing, tinkering with classic cars, following sport, especially Six Nations rugby.

Cars

1970 Mercedes 280SL; wife Patricia has a 1971 Fiat 500

Favourite gadget

I recently changed from an Android phone to an iPhone, so I've enjoyed getting used to that.

Last book

The Shock Doctrine by Naomi Klein

Last film

Jason Bourne

Favourite holiday

Relaxing in Lombok, Bali

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