The pain and glory of running McLaren

"If you wait by the river long enough, the bodies of your enemies will float by." Sun Tzu, The Art of War.

At 68, 36 years into his tenure as McLaren's main man, Ron Dennis knows all about patience. Right now he's waiting, with the conviction and elongated perspective of a boss who has seen it all, for his team's return to winning form.

Ron Dennis also knows all about adversaries. Several have crossed his path over the decades. One or two have sought to wound the organisation he represents with such fierce pride. He has seen them float by. This sense of longevity, of permanence, is one of the most compelling aspects of the Dennis character; he seems as integral to McLaren as McLaren does to the championship in which it has competed with dauntless competitive spirit for the past 50 years.

As we note in our special issue of F1 Racing, so great has McLaren's contribution to F1 been since its first entry, at the 1966 Monaco Grand Prix, that it's impossible to imagine grand prix racing without it. Through Hunt vs Lauda, Senna vs Prost, Hakkinen vs Schumacher and Hamilton vs Massa, McLaren has been right there, essaying the narrative for so many of F1's most electrifying moments. And, since 1980, Ron Dennis has been right there too, predominantly as team principal, latterly as chairman and CEO.

He's not the whole McLaren story, nor would he ever claim to be. But Dennis has been the architect of modern McLaren and is pre-eminent in a passing F1 generation: the once-archetypal entrepreneur-owners who helped lift F1 from its freewheeling beatnik days to the loftier plateau it occupies today, as a tech-driven, hard-monied, globe-trotting mega-circus.

An opportune moment, then, for this furiously restless and ambitious man to take a pause for conversation with F1 Racing, and reflect on what has been achieved and what is still to come.

F1R: Where do you see McLaren today - in racing and in a wider business sense?

Ron Dennis: One of my passions has been, and will always be, Formula 1. Whatever I'm thinking about, what lurks in the background of my thoughts is the competitiveness - or at this moment in time the uncompetitiveness - of the team. Of course, I have a very detailed understanding of why that is. We're a data-driven company and we have a very good and transparent relationship with Honda.

We think we've made an exceptionally good car this year, and we believe that recent managerial changes at Honda will result in really significant power-unit progress over the course of this year, too.

But there are also the challenges that come from McLaren being a group of companies that employ three-and-a-quarter-thousand people compared with 50 when I first acquired equity in 1980. And we have to come to terms with those challenges - not just headcount, but all the commercial consequences, such as turnover, profits and sometimes losses, diversification of the group and so on. They're all the pressures you would expect a truly multinational and significantly diverse group of companies to have.

At the time of writing, McLaren comprises two core businesses: McLaren Technology Group, which encompasses McLaren Racing, McLaren Marketing and McLaren Applied Technologies (MAT), and McLaren Automotive, which is necessarily a separate corporate entity from McLaren Technology Group, owing to its having a similar but not identical mix of shareholders.

The racing exploits and luxury supercars coming under the 'McLaren' brand you'll be familiar with; you may well also be aware of the Formula 1 team's extensive sponsorship portfolio; less well known is MAT's pioneering work in fields as diverse as pharmaceuticals, aerospace, and sports equipment for elite athletes.

F1R: So how do you see the future? How are the next 10 years mapped out, or even beyond that?

RD: The pace of growth of McLaren Automotive is consistent with plan. We'll make 3800 cars this year, all of which we'll sell. In fact, our buyers face a healthy but not too long waiting period at the moment, which is what you want. We intend to plateau between 4500 and 5000 cars a year, which we think is the sweet spot in respect of a strategy that will retain good residual margins for our customers.

McLaren Automotive will continue to mature and diversify, introducing more bespoke car customisation programmes and probably a one-make racing series of some kind. It's in a good place. Other aspects of the group, like the alternative technologies McLaren Applied Technologies is pursuing, are still in rapid growth, around 15 per cent a year in fact. We're projecting a £50million turnover for McLaren Applied Technologies in the near future, with bigger ambitions not far away.

And McLaren Racing is continuing to grow in accordance with the trajectory of a modern state-of-the-art Formula 1 team. Putting aside the ebbing and flowing of performance, it's a relative constant in terms of challenge: you want to win grands prix, you want to win world championships, but the ingredients constantly change, primarily driven by regulatory vagaries and variations. And so the challenge is always there, but it's not always the same challenge.

Lastly, McLaren Marketing has had a very good winter. We've recently announced important new long-term partnerships with Chandon and Richard Mille, and we've also recently renewed our long-standing relationships with GSK, Johnnie Walker, Santander, Hilton and JVC Kenwood. Added to that, we continue to enjoy the support of multinational corporations and household-name brands such as Mobil1, Esso, SAP, KPMG, CNN and many more.

So far, so business. But our interest is in Ron the racer, and we're happy to report that beneath that oh-so-immaculately groomed exterior there still beats the throbbing heart of grand prix titan...

F1R: How would you react to being called the founder of modern Formula 1? F1 was almost 'black and white' before it turned 'colour' around 1980. Were you a key part of that era?

RD: That's a surprisingly challenging question to answer. I don't think it's for me to judge. So I'll say only this. When I took charge of McLaren in late 1980, I was relatively young compared with most of my competitors [he was 32] and I had a tremendous ambition and hunger to succeed. I was keen to innovate, too, and to usher in improvements that owed themselves to a combination of big-picture thinking and attention to detail, which benign visionary blend I've attempted to maintain ever since.

We inaugurated the TAG-Porsche turbo engine, and thereafter made the well-timed switch to Honda [in 1988 - eliciting F1's statistically most dominant season]; there was our ground-breaking carbon-fibre chassis driven by a stream of brilliantly competitive drivers, all of this made possible by having Philip Morris [via its Marlboro brand] who stepped up to the plate to meet most of the financial challenge.

In addition to that, we made a concerted effort to diversify into secondary sponsorship, and our additional sponsor-partners gave us the ability to accrue surplus revenue that we could apply to other projects of various kinds, including the design and build of the McLaren Technology Centre [McLaren's award-winning, ultra-high-tech, Norman Foster-designed Woking HQ].

The MTC cost £270million and was mostly financed over three years by surplus cashflow. Most of the motor-racing world thought we were completely crazy to do it, but in fact it's been one of the best investments we've ever made, because it created a USP in our offering to people who wanted to invest in us, an advantage we enjoy to this day.

So those innovations, and others like them, all represented a cumulative step change that introduced interesting ideas to F1, most of which have been copied and are now the norm.

F1R: Would you also agree that the way McLaren went about F1 in the '80s and early '90s, winning the drivers' titles in '84-86, then '88-91, and six constructors' titles in that period, forced your rivals to raise their game?

RD: Again, I think most people would support that view, but such an opinion is better coming from other people.

I prefer to look forward, and there's still a huge amount of ambition at McLaren to contribute to the future growth and development of Formula 1, although we're currently very constrained by both regulation and [F1 paddock] pass restrictions: let's just say that the policies of monetisation embraced by CVC and FOM tend to be quite constraining on the creativity of the teams.

Unconstrained, we could make Formula 1 a lot more colourful than it currently is - and ultimately more successful, too - if we were permitted to input good ideas and then execute them. But sadly that side of the running of the sport is quite challenging at the moment.

F1R: Do you think Formula 1 has got itself into a mess with, for example, the recent issue over qualifying? Or do you think a few fixable problems are being overplayed by hyperactive elements of the media?

RD: First of all, I want to make clear that Formula 1 is far more stable than most people realise. Having said that, certain teams are currently experiencing hardship, and in fact I wouldn't be too surprised if one or two of those teams fail to make it to the end of the season.

The managers of such teams get into such positions because they spend more money than they have. It's the same in any business: if you spend more money than you have, then you're going to find yourself in difficult territory. But this sport is addictive, and people always think their car's next performance upgrade is miraculously going to make it competitive, so they overspend.

One of the disciplines you need in Formula 1 is to learn how not to do that. You have to apportion your revenue meticulously. Even an organisation such as ours, which is robust, solvent and healthy, deliberately constrains capital spending at certain times in order to make sure we're always able to execute perfectly the operation of our team.

But I don't think that discipline necessarily sits in all the other teams. I don't fear an implosion, but undoubtedly some teams are less secure than others. In addition, there's clearly a degree of uncertainty about the future ownership of F1, but that's been around for at least five years, possibly longer, and will inevitably work its way through. So I'm optimistic, and above all I'd like others to be optimistic too: specifically, people who criticise something - and there are plenty who criticise - should couple their criticism to a solution.

There are lots of things in F1 that the teams recognise could be better, but it's not easy to find a solution everybody will support; and, even when the teams are unified in their position, if that position isn't supported by either the FIA or CVC and its officers, then the process by which the series is governed at the moment provides for it not to happen.

At the moment, the power-output difference between the most competitive engines and the least competitive engines is quite large. It's a big talking point, and in my view the best way to achieve consensus is to abandon the tokens model and instead extend the period in which the current engines are eligible and then, no matter who you are, you'll ultimately be bouncing against margins of only 2-3 per cent.

In other words, as long as we successfully extend the period in which the current engines are eligible, teams like ours will experience pain in the short term, but that pain will gradually dissipate as the power-unit engineers' ingenuity begins to butt up against the performance limits of the regulations.

F1R: On that topic, last season was difficult for you [McLaren finished ninth in the constructors' table - its worst placing since 1980]. What does it feel like to have had such a dismal year, given your past record?

RD: The pain experienced within our partnership with Honda was acute on both sides. It didn't need to be amplified artificially, and we didn't need to inflame it for strategic reasons; it was always there.

So we were keen to make sure that there were never any conversations that contained apologies, or included anything of the nature of one company humbling itself to another, for the simple reason that that kind of dialogue or action is a complete waste of energy.

The only approach that ever gets you out of a technical problem is complete transparency, total focus and sheer hard work, and those are the essential philosophies that characterise the way McLaren and Honda are working together right now.

But it takes time for new people to buy into those essential philosophies. Meanwhile, all the time, the media are watching and writing, the results of which tend to burn energy. It's distracting but unavoidable; it's the nature of the beast.

We're 100 per cent certain that our partnership is the correct way forward. Honda is a great company, and you'll never consistently win world championships if you're second-in-line or third-in-line on engine supply.

If you want to win world championships, plural, which we absolutely do, you have to be aligned with a manufacturer, toe-to-toe, head-to-head, and fully prioritised.

And after you've begun to reap the competitive benefits of that mutually loyal one-to-one commitment, and on-track success duly begins to come, then you can consider supplying other teams, but not before.

Yes, we at McLaren want to be good Formula 1 citizens, and we always have been, but altruistic behaviour of that nature must also be set against a background of fair, pragmatic and sensible business practices.

So, if you want to hear it in blunt terms, let's get to the point where we've won the world championship first and then we'll think about it. Honda and ourselves fully embrace the fact that we need to be supportive of the Formula 1 community, but, if you look at McLaren in the round, you can't possibly say we haven't done just that.

Look at the number of young drivers we've brought into Formula 1, for example. The McLaren Young Driver Programme is a pyramid of young drivers, with a number of them at the bottom and just two at the top: namely our Formula 1 team with two cars and therefore just two seats.

As the drivers at the bottom of the pyramid strive to get to the top, you help them, you train them, you educate them, but it can't work out perfectly for all of them. That's arithmetic.

Ideally, a driver works his way to the top, wins with our team, stays with our team, and retires from our team. Sometimes, a driver works his way to the top, wins with our team, then moves on to a different team.

And some young drivers have had a decent start with us but, for whatever reason, never get to win. It's inevitable that you're going to see examples of all three career pathways, but I want to make this crystal-clear: there has never been, in the history of McLaren, any unkind or ill-considered action in respect of our drivers.

There are people who say: 'Oh, you notified Kevin [Magnussen that he would not be retained for 2015] on his birthday, that's bad.' Well, if you saw the letter I wrote him, which was a nice and generous letter in the circumstances, and if you were aware - if the world was aware - of the conversations I'd had, not only with Kevin, but also with his mentor, Anders [Holch Povlsen, a Danish fashion magnate], then you would appreciate that they were fully informed and fully involved.

The letter itself was in fact merely a confirmation of what they already knew was being dictated by our decision to hire Fernando; it wasn't news to either Kevin or Anders.

So the letter was simply triggered by the fact that driver-team relationships are governed by contracts, and contracts require formalisation. The format of the letter wasn't 'We're firing you'; it was, 'We're going to do everything we can to help your career, we'll always be supportive of you, and we'll provide positive references - in other words information and data - to any other grand prix team that may be interested in you.' That's what the letter said.

The situation was simple. Entirely independent of our opinion of Kevin, who we knew to be a talented and capable driver, we'd already decided to go with Fernando and Jenson, and three-into-two wouldn't go. So the letter formalised that position, in accordance with the relevant clause of our contract, and coincidentally it arrived on Kevin's birthday - and that one small detail portrayed McLaren and myself as being cold, ruthless and uncaring.

Far from it, far from it. In fact, you can even read the letter. I have no problem with you reading it, as there's nothing in it that's confidential. In fact, it's a nice letter. It's just unfortunate that Kevin received it on his birthday, but it didn't contain anything he didn't already know.

F1R: When you take a kicking like that in the media, and when times are tough, what do you do when you get home? Do you sit and think about it? Do you reflect on how you're going to act and how you show leadership?

RD: Of course, of course! I think most people in the company know what my values and principles are. There are - it's not for me to say - many, many times I've demonstrated, not for any other reason than that I'm principled, what the company is prepared to do for its employees. And that's how either the company steps up to the plate or I personally step up to the plate in moments of individual hardship or difficulty.

That's the company we are. It's the way all companies should be. I don't want to say we're some sort of saintly organisation, because we also have to take painful decisions, especially when people aren't doing their jobs to a level that's satisfactory. But, by and large, if you speak to our workforce, the inside story is very different from the outside perception.

F1R: Why is that, do you think?

RD: We're a fiercely competitive team. We want to be the best at everything we do, and that requires us to climb and climb fast. Even so, when I visualise the method by which we're going to do that climbing, I'm careful to make sure we don't trample on the hands of those gripping the rungs beneath us.

I've always climbed my own ladder - and, although you sometimes slip a rung or two in your efforts to climb fast, I've always been anxious to ensure that the consequences of slipping have never been to knock someone down beneath me, and especially not anyone tied to me in the climbing process.

But people do occasionally slip up beneath you, often without your knowledge, and then it's too late to do anything. Consequently, when such an occurrence has been misunderstood or misreported, I've often felt very aggrieved. While I accept that all leaders tend to become battle-scarred, and although you sometimes have to take bullets for your staff, it's never a painless experience.

If I'm honest, I wish the world at large were a little more tolerant when you're up there, taking flak for things that aren't within your direct control. But, ultimately, as I say, as the leader, you have to take responsibility; sometimes it can be really painful though.

F1R: You've been a leader for a long time, but you began working in F1, as a teenage technician for the Cooper team, in 1966 [pictured above lifting the front of Jochen Rindt's car]. After all that time, do you feel you're still climbing?

RD: I used to tell people that my tombstone epitaph should be: 'Here lies a successful entrepreneur.' I've modified that over the past couple of years, and now it would be: 'Here lies an ever-ambitious, successful, entrepreneur.'

I'll die ambitious. I've got so much left that I want to do. Every now and then, I've made the mistake of trying a bit of private diversification, only to find that, because I haven't been able to give it enough attention, it hasn't worked out as well as I'd have liked. But that's a product of my insatiable ambition.

I'm not complaining. My life is fantastic. The problem is that sometimes it's fantastically difficult and painful, and sometimes it's fantastically successful and pleasurable. Whatever the emotion, it always has 'fantastic' in it. I don't have anything that comes at me in small doses. If I have pain, I have acute pain; if I have pleasure, I have acute pleasure.

F1R: You talk about pleasure and pain, and about success and difficulty, but do you ever have plain, simple, fun?

RD: Yes, I do, but, unfortunately, because of social media, nowadays I tend to have to be rather constrained. For example, on holiday recently, with a group of friends, there was a moment when I decided to create some spontaneous fun.

The problem is - immaterial of what my little ruse was - everybody started taking pictures on their phones, and you suddenly realise that a moment of silliness could be out there in the world in a millisecond. Sadly, therefore, what should be private fun could be publicly shared against your wishes. And that fear makes you constrain yourself.

So social media to some extent constrains a public person's personality, because in the past it didn't matter if you had a moment of silliness because no one would have videoed it or shared it. But now they do.

It's a pity, because there certainly is a 'plain, simple fun' side of Ron Dennis. If you knew me well, you'd know that, as serious and as focused as I am in business, I'm as much the opposite when I'm off duty. I tend to holiday well away from Europe, in places where everybody respects one another's privacy, and you can relax and have fun. Unfortunately, we used to be able to do that in Formula 1, but no longer.

F1R: Would you ever consider taking to Twitter?

RD: I don't think there's even the remotest possibility of that ever happening. To be honest, if I sit down for a meal with my family, or in a restaurant with friends, or at a dinner party, if anybody even comes remotely close to using their mobile device, all hell breaks loose. I don't like it.

F1R: You've been responsible for recruiting some of F1's greatest drivers: Niki Lauda, Ayrton Senna, Alain Prost, Mika Hakkinen, Kimi Raikkonen, Juan Pablo Montoya, Lewis Hamilton, Fernando Alonso... What do they mean to you?

RD: All human beings have personalities, and racing drivers are no exception. Every single one of them has been different - and not only different in personality, but also different as regards their work ethic, their loyalty and their behaviour in the face of either adversity or success.

You measure people according to how they react to different sorts of life experiences. So I can look back on the past with very different emotions according to the individual I'm recalling, but foremost on my checklist is loyalty, and not just with drivers but with people in the company, too.

Loyalty is a value that really tests a person. For a company to power through adversity, you require loyalty from everybody. It's not a one-way street: I have to be loyal to the people who work for the company just as they have to be loyal to me - and, if anything bad ever happened to the company, one of the considerations that would sit very prominently in my mind would be a virtual index of mutual loyalty.

Conversely, drivers also have to be selfish. They have to have an unwavering belief that they're the best. How can you be a Formula 1 driver if you don't think you're capable of being champion? How can you be a Formula 1 driver if you aren't prepared to prioritise your own success above that of your team-mate? How can you be a Formula 1 driver if you're not happy always to put yourself first?

Yet the best Formula 1 drivers, despite embracing that feverish level of personal ambition, also manage to engender great loyalty among engineers and everyone else in the team. They're a rare breed.

And I have to say that the Fernando of the past year has been remarkable in that regard. He's changed enormously - and for the better. I recently read an article in which a former driver [Johnny Herbert] was saying it was time for Fernando to retire.

But just look at Fernando: in my opinion, which I think I'm pretty well qualified to voice, he's still the fastest driver in Formula 1, it's as simple as that. And he's super-fit, too. His Melbourne injury was no more than a cracked rib. Every time he breathed deeply it hurt a bit, but for a matter of days, no more.

F1R: You've spoken in the past about how close you were to Mika Hakkinen. What was special about your relationship?

RD: Mika's loyalty was phenomenal. That was something I'd experienced already, with both Alain and Niki, but never as much as with Mika. At the beginning of 2001, Mika and I had a few chats about his future, and I remember that he came to me a few days before the Monaco Grand Prix and said he'd made up his mind: he would retire at the end of the season.

I've never known a driver come and tell me so early in the year that he was going to retire. I asked him why, and he gave me his reasons. I considered what he'd said, but I thought it was too soon. He was still only 32, he was still such a great driver, and it was still only May.

When I sit down to talk to Fernando or Jenson today, I'm aware of a large age gap, and for that reason I can give them something akin to parental advice. But when I started my McLaren career, in late 1980, I was just 32 - more or less exactly the same age as the team's drivers - so that relationship dynamic wasn't possible. In fact, our most senior driver in my first full season in charge at McLaren, 1981, was John Watson, who's actually a little older than I am.

But by 2001 the age difference between me and our drivers had grown to encompass the father-son 'window'. At the beginning of the 2001 season I was 53, and Mika was 32. So I felt able to give him a kind of parental guidance. We talked of a sabbatical, and perhaps it might have worked, because, after he'd made his decision, he drove better than he'd ever driven before.

I relished seeing that, and, as the season wore on, I could sense that there was just a glimmer of hope that he'd continue for 2002 - and if he had, I'm absolutely sure he'd have been super-competitive. His final grand prix win, at Indianapolis in 2001, which was his penultimate grand prix start, was just about as good a drive as I've ever seen.

F1R: Is there anything you still want to achieve?

RD: There are things I'm achieving that not a lot of people know anything about, and some give me a lot of satisfaction. People sometimes ask me if I'm ever going to write a book. If I find the time to put anything on paper, my motivation will only be so that my children and grandchildren can read my version of the story. I don't like the word 'autobiography', but I wouldn't mind putting down my account of my history.

There's also something I haven't got the time to do at the moment. I want to design and construct a new home, only because I've got some great ideas. I don't particularly want to build it to live in it; I just want to build it.

I'm fortunate to have a nice home at the moment, and it gives me pleasure, because it's my sanctuary - it's where I go to let all the stress fall off me. But, apart from that, I don't think I've got a great deal more to prove, although I'd love still to be an integral part of McLaren when we return to winning - which we will.

F1R: So you're not about to pick up the golf clubs just yet?

RD: No. I enjoy scuba diving, I enjoy shooting, I enjoy skiing, but those things have to fit in around my 24/7 entrepreneurial business life. There'll be no such thing as retirement for me; it doesn't sit in my vocabulary. It's not the way I'm put together.

F1R: So you don't see yourself stepping back?

RD: I'll never stop. The definition of 'stop' varies from individual to individual. I occasionally start a speech by saying "I've never done a day's work in my life", and that's a very accurate statement. Because I love what I do, it doesn't feel like work, so why would I stop doing it?

I feel privileged to be given the opportunity to pursue my ambitions, and I think that there are very, very few people - I can't think of anybody in fact - who have financially suffered from being supportive of me or the companies that I've been involved in. But if you're an entrepreneur, you're not always going to win, you're not always going to achieve everything you set out to achieve.

Other than that, I'm proud of the educational and professional achievements of my three children, and I'm proud to have a great partner [Carol Weatherall], because we all need support and she's a very clever lady whose support is absolutely first-rate. So I look back on the negatives of my life as just being par for the course. The more you're a leader, the more you're going to get scarred. It's inevitable.

Or, as Sun Tzu had it: "Never venture, never win!"

The current issue of F1 Racing, now on sale, celebrates McLaren's 50 years in F1 since the team's debut in the 1966 Monaco Grand Prix.

It features this exclusive interview with CEO Ron Dennis, a rundown of 50 mega McLaren moments, an analysis of Fernando Alonso's second spell with the team and what makes the rivalry between McLaren and Ferrari so special...