How to Build a Winning Team Culture (In Just 4 Steps)

Episode #344 How to Build a Winning Team Culture (In Just 4 Steps)

McLAREN’S “NO BLAME” WORK CULTURE

In the high stakes world of Formula One (F1) Motor Racing, the difference between the fastest cars and the slowest cars is measured in fractions of a second.

What is it that separates the genuine contenders for world championship glory from those that are destined to just make up the numbers on the starting grid?

I came across a recent interview in Fortune magazine with Zak Brown, the CEO of McLaren Racing. Aside from the fact that McLaren just happens to be my favorite F1 team, the headline of the article really captured my attention: How a no-blame work culture helped McLaren win its first major racing championship in more than 20 years.

I’m a huge believer in the maxim, leadership drives culture, culture drives performance, so I was intrigued to see what CEO, Zak Brown, fresh off winning the 2024 Constructors’ Championship, attributed the team’s success to.

I begin with a little background on F1, just to help you to translate the strategic and business elements of the sport; I take a look at the vital ingredients of the McLaren turnaround; and I give you four super-practical tips that you can apply to your own team right now to make a performance difference.

WHY IS COMPETITION SO FIERCE IN F1?

For someone who was never really into motor racing, I’ve become quite a devotee of the sport. I love how it combines elite high-performance competition with leadership and business acumen.

To be successful, so many things have to work together absolutely seamlessly:

• The design and construction of the car itself;
• The capability and performance of the drivers;
• The execution precision of the pit crews; and
• The judgment of race engineers and strategists.

It’s an unforgiving environment. Most businesses don’t even come close to the performance heights of elite sport, and F1 is no different. I recorded an episode some time ago on the cutthroat nature of F1 motor racing. It was Ep.179: Survival of the Fittest.

Without going into the nitty-gritty, there are a few important aspects to the sport that are worth knowing:

1. There are 10 Formula One teams;
2. Each team has two cars (with two drivers);
3. The 20 cars compete for race honors in an annual calendar of 24 races, each in a different city around the globe, from Australia to Azerbaijan;
4. Trophies are presented for each race, but no prize money is on offer;
5. Instead, championship points are awarded to the top 10 drivers;
6. At the end of the season, the driver with the most points over the 24-race season is crowned the world champion; and
7. The team with the most points accumulated between their two drivers is awarded the Constructors’ Championship.

A couple of interesting things to mention here. The first is that every point counts. On any given weekend, you’ll see drivers fighting tooth and nail to achieve 10th place (rather than 11th) so they can earn what could be a vital championship point.

The second point of interest is that the prize pool from the F1 governing body is distributed at the end of the season based on the final position that each team achieves.

The winner of the Constructors’ Championship could earn around $80 million in bonuses, whereas the 10th placed team might only earn $10 million – let’s call these the F1 KPIs: bonuses paid for specific performance over a designated period.

The prize pools are getting bigger all the time, too. The popularity of the sport has exploded since 2019 when the Netflix documentary Drive to Survive was released. The doco followed several of the teams as they progressed through the season, giving us a window into their inner workings.

As a direct result of the Netflix documentary, in the last 5 years:

• Crowd attendance has surged by 50% from 4 million to 6 million people;
• The global TV audience grew from 350 million people to 500 million people; and
• Revenue almost doubled, from $1.8 billion to $3.2 billion – that’s an extra 1.4 billion reasons to build a high-performing team!

COMPETING WHEN THE PLAYING FIELD ISN’T LEVEL

What separates the F1 teams from each other? For a start, each has different resources at their disposal.

The top tier teams like Mercedes and Red Bull spend between $400 million and $500 million every season.

The next tier, like McLaren and Aston Martin, spend between $200 million and $300 million a year.

And the smaller teams like Williams and Haas spend between $150 million and $200 million.

It’s not exactly a level playing field, so a cost cap was introduced in 2021 to even things up a little. The cap limits performance-related spending to about $135 million, but it doesn’t restrict driver and executive salaries, or spending on indirect costs, like marketing.

Bearing this funding differential in mind, what is the secret sauce that separates the teams? How do they make the incremental improvements that can mean the difference between winning a Constructors’ Championship and facing the end-of-season driver and team principal sackings that inevitably await the under-performers?

Let’s get back to McLaren and Zak Brown. McLaren isn’t one of the teams with the highest budgets, so in winning the 2024 Constructors’ Championship, there’s a story to tell and there’s a lesson to learn.

Before I look at the interview, I just want to drop in a quick caution on the role of attribution bias. In this interview, Brown is reflecting on a winning season, retrospectively attributing the team’s success to certain factors over others.

This can provide a pretty useful analysis, but it’s also prone to placing undue emphasis on non-causal factors.

Attribution bias is surprisingly common – even Jim Collins’ seminal work Good to Great is criticized for the efficacy of its data. The CEOs and company executives who were interviewed by Collins’ team explained their company’s success retrospectively.

It wasn’t exactly what you’d call a double-blind placebo-controlled clinical trial… but an extremely useful perspective nonetheless.

At a minimum, we get to see how the CEO of McLaren views his team’s performance. Brown cites four key factors in the interview:

1. Key management decisions;
2. Hiring the right leaders;
3. Creating a no-blame workplace culture; and
4. Figuring out how to retain staff in an industry that thrives on poaching.

He could be talking about any organization in any industry, so let’s take a deeper dive into a few of these.

THE McLAREN DIFFERENCE

The first lesson to take from Brown’s interview is: it’s not quick.

Brown took on the CEO role at McLaren in 2016 and it took him almost 10 years to build a team capable of winning. But by 2023, they were making ground.

He says that the 4th place in the 2023 Constructors’ Championship was proof that the changes he was making were working. But it wasn’t the first time McLaren had placed highly in previous seasons under Brown: they were 4th in 2019 and 3rd in 2020.

The moral of the story is that they were on the edge of success for a while, but they couldn’t quite seem to find that critical breakthrough.

The second lesson is about culture: No politics, no distraction, and no dilution of effort. This is brilliant. In any company, you’d want to be able to say this about it.

In Brown’s estimation, this is what made all the difference. They didn’t have the superstar names, but the team was able to find a way to work together to better optimize performance – great stuff!

The third lesson is about retaining talent. Brown speaks about making sure people are looked after. This is an offshoot of culture, but he says specifically that you need to have a compelling value proposition for people to stay.

Poaching of talent between the teams is a huge deal in F1, and Brown specifically mentioned his ability to coax chief designer Rob Marshall to leave Red Bull and join McLaren.

There are a bunch of superficial indicators as to why people are attracted to working at a certain company, but it ultimately comes down to belief in the mission; the ability of the people around you; the level of trust in each other to do the job; and the willingness to put egos aside in search of a better way.

The fourth factor Brown mentions is the no-blame, no excuses culture. Now it’s getting interesting: Brown talks about the fact that when he arrived, people were quick to blame other factors, both internal and external.

For example, the previous engine partner, Honda, was seen as the main reason why McLaren wasn’t performing. Then they switched engine partners to Renault… and things didn’t really improve that much.

They solved what they thought was their main problem, yet the poor performance persisted. The only option then was to take a good hard look at themselves. In Brown’s own words:

“There was an arrogance, a denial that once we swapped the power unit, we were going to be back to McLaren. And when that didn’t happen, it was pretty sobering. I realized there were lots of issues with leadership that we needed to improve. So, one by one, we changed the leadership team. We changed the team principle, the technical director and more.“

This was obviously a critical step. Brown realized that without the right leadership, the team couldn’t improve.

As much as F1 imposed a cost cap on performance-related spending, there was a performance cap on leadership capability.

Brown’s reflection was that he was simply able to unlock what was already there, and he ultimately put the success of the team down to leadership. He said,

“The leadership team unlocked what was sitting there, which was a championship caliber group of people who weren’t operating in the right way. We had the horsepower, but we were spinning our wheels, and what this team was able to do was put the traction down.“

Attribution bias aside, Zak Brown’s big takeaway was that McLaren had a great team of people that the old leadership just wasn’t able to get the best out of. It took better leadership, a changed culture, and key talent in the right places to unlock that potential.

That path was neither easy nor fast, but it was ultimately worth it – for everybody involved.

FOUR STEPS TO IMPROVED PERFORMANCE – NOW!

What can we take away from all of this? The 2025 season has started out well for McLaren, as they already lead the Constructors’ Championship by over 20 points after just 2 races.

It’s a long season though, and sustained performance is the name of the game. Mercedes had a stranglehold on the Constructors’ Championship for eight years, from 2014 to 2021. Then Red Bull looked absolutely unstoppable for a couple of seasons.

Now, it’s going to be interesting to see how long McLaren can retain its edge, despite the relatively smaller budget that it deploys compared to the big three teams: Mercedes, Red Bull, and Ferrari.

Zak Brown’s account of McLaren’s rise to the top is instructive: what should we take out of this as leaders? What’s common between the world of F1 motor racing and our leadership roles in the finance, technology, or healthcare sectors?

I’m going to give you four things to focus on. I’m 100% convinced that, if you can do these few simple things, it’s going to give you the edge you need to move your team up the performance curve.

Just one little word of caution though – these things are deceptively simple, but they’re not easy. Not by any means… if they were, everyone would be doing them!

1. Believe in the dormant power yet to be unleashed by your team.

It’s important to accept that your team has a long way to go no matter where it is now. Just remember, your very best people, on their very best day are going to give you, maybe 80 to 85% of their A-game.

So, what does that mean for your average people?

If you want to produce better performance from your team, you have to step into the accountability of a true leader: stretch every individual… teach them how to demand more from themselves… and show them how to have greater impact.

Imagine if you could get an extra 10% from every single individual in your team. That’s what we call leverage!

But, too often, leaders rationalize and say to themselves, “My team is awesome. They’re already delivering high performance. If I ask any more of them, they might be unhappy, and they may even burn out.“

This is going to leave you stuck exactly where you are now, which is why it’s so important to believe in one fundamental truth: Your team isn’t at peak performance right now, and getting it there requires rare leadership performance from you, if anything’s going to change.

2. Stop blaming.

There are always going to be external factors that you can point to, to explain your team’s success or failure – but ultimately, they’re nothing more than cold hard facts.

Control what you can, and ignore what you can’t.

Let me drop a little truth bomb on you: unless you’re ready to wave the white flag and admit defeat, stop blaming everyone and everything else – take ownership of your situation and do whatever you can to improve it.

If you don’t take accountability for driving better performance, your team will eventually develop a victim mentality. They’ll feel as though success will always be out of reach, because of factors beyond their control.

It doesn’t always follow that if you take accountability for results, you’ll end up with a high-performing team… but it certainly does follow that if you don’t stop blaming outside forces, your team will be doomed to mediocrity.

3. Make the hard decisions.

McLaren didn’t really hit its straps until Brown made some tough calls. If your team is anything like most teams on the planet, you’ll have some decent people who say all the right things, but you know deep down they aren’t your A-players.

Here’s something that should really motivate you into action: if the performance of your leaders is just so-so, the mediocrity multiplies, and it becomes an intrinsic part of the team culture.

It’s always hard to choose to move people on, but I’m a firm believer in the principle that it’s a lot easier to reign in a stallion than it is to flog a donkey.

The beauty of being in a leadership role is that you get to decide what you’re going to do.

You get to decide the standard that you’re going to set. So, if you don’t have the right talent in key positions, you’ve always got a choice: you can leave everything as it is, and just accept that your team won’t ever reach its potential, or you can make some tough decisions to bring in the right people and give your team a fighting chance.

That choice is completely up to you – and most people won’t even know that you’ve made it!

Of course, your instinct is going to be to rationalize, so you may tell yourself, my team is already full of high performers. But even in the most ruthlessly competitive environments like F1, that’s almost never true.

And unfortunately, if you think it is, you’re just going to start believing your own bullsh!t about your team’s talent, capability, and performance.

4. Be patient.

It takes time. You can’t just make a couple of isolated decisions and expect things to miraculously turn around. They won’t.

The search for high performance is elusive, and it takes constant vigilance and relentless energy, so don’t make the mistake that many leaders make – don’t declare victory too early.

After my five years as CEO of CS Energy, the performance turnaround of the business was quite remarkable – but I still knew that we hadn’t even scratched the surface of its true performance potential.

It would’ve taken more time, with more leaders, making more hard decisions, bringing in better people, and continuing wholesale culture change through every level of the company.

So, make the changes, monitor progress, and look for pushback. Remember, if there’s no noise, there’s no change.

SHOW YOUR PEOPLE HOW TO WIN

Building a winning culture isn’t easy… it isn’t fast… and it’s often highly unpredictable.

These four basic steps that I extracted from McLaren’s playbook have lessons for all of us. To go from a team that wasn’t a serious threat to the big three – to being the best of the best is applicable to any company in any industry.

Leadership drives culture; culture drives performance.

If you want to genuinely make that happen, you’ve got to dig in. It’s a long road, and without relentless commitment as a leader, your people will never experience that winning feeling.