Zak Brown 0:00 

Every person at McLaren knows how they contribute to putting performance on the race car. Have a very much a performance mindset, that everything you do at McLaren leads to performance on the race car.

David Novak 0:12 

You know you can have talented people and have the right strategy yet still come up short. Today, we're digging into why that is and how to fix it. Welcome to how leaders lead. I'm David Novak, and every week I have conversations with the very best leaders in the world to help you become the best leader that you can be. My guest today is Zach Brown, the CEO of McLaren racing. Now, McLaren is an iconic brand, and their racing division is one of Formula One's most popular and successful teams. In fact, they're the only team to have won Racing's Triple Crown of the Indy 500 the 24 hour Le Mans and the Monaco Grand Prix. And you know, it's funny, when we think about winning a race, we think about one guy on the podium spraying champagne everywhere, but Zach is leading a team of 1300 people, and he wants each and every one of them to feel connected to that big mission, whether they're sitting in the driver's seat or sitting in the HR department. Now, if you want to win as a team, you got to make sure everyone knows how their work contributes to the outcome you're about to hear exactly how Zach does it, and trust me, his path of leadership is not what you'd expect. His story alone is worth the listen. So here's my conversation with my good friend, and soon to yours. Zach Brown,

you know, you've got one of the most interesting jobs in the world, you know, running a Formula One team, but I want to start with the fan in you. You know, just what makes you a fan? What's the moment that you first fell in love with racing?

Zak Brown 1:48 

I remember it like it was yesterday, and I carry it with me today. And as far as not only my fandom for the sport, but how I personally engage with the fans, and how I expect our team and drivers to engage with the fans, and that was 1981 Long Beach Grand Prix. I'm from Los Angeles. My mom and dad took my brother and I, and just because it was kind of the circus is in town, they didn't know anything about racing. I didn't know anything about racing, but a 10 year old boy running around with his eight year old brother, the Long Beach Grand Prix, the sound, the speed. I remember the grandstand I was in. I remember the first racing driver I met. I remember who won, which was Alan Jones, the then current world champion, and some funny tiebacks to it, such as the gentleman Montserrat, who's, unfortunately, since passed away, brought me into McLaren, was a sponsor of that, that racing team that won that day. So all sorts of cool stories, but it was when I was 10 years old, and I just fell in love with racing at that point, and then the whole visceral experience, and I still have the race program to this day. I'm a bit of a hoarder of stuff. Always have been.

David Novak 3:02 

I love that, and I gotta ask it now here you are after, you know, getting the passionate 10 years old, your CEO of McLaren racing. What car are you racing to work with these days? Zach, and what do you drive to work?

Zak Brown 3:15 

So I'm a, as you can imagine, I'm a car guy. So most days, it's a not that a Range Rover is boring, but it's, it's it's not quite as exciting as the other cars in the collection, but I'm a big car collector, and you can see a variety of cars from, of course, McLarens, as you would expect, to cool Porsche, nine, five, nines, the old cobras from 1963 so I think the team gets a little bit of a kick out of based on the noise that I make. What car did I drive to work?

David Novak 3:45 

I love it. You know, there's been a surge of young fans coming into f1 and, you know, thanks to things like the Netflix show drive to survive, what's been the most surprising part of of that growth, from from your perspective as a leader,

Zak Brown 4:00 

I think it's the amount of growth which is great, because when Netflix, when it was first presented to the sport, it was like, yeah, it's going to just kind of be another shoulder programming TV show. We do them all the time. It's been a game changer for the sport. Of course, there's a lot of contributors to it, but you know, if I had $1 for every time someone said, I Netflix got me into Formula One, it would be amazing what it did do. If you looked at where the sport was pre liberties acquisition, and where the sport needed help was women, youth and North America, if you kind of think about the geographic demographics of where Formula One needed to kind of pick up the pace, if you'd like. And Netflix, I think you got to give a lot of credit to you know now the most often time I'm going through the airport, the most common comment I get is from a female who says, I never watched Formula One before, and I love it. Or you. Uh, a husband who says, My daughter, I it's, it's been amazing the audience that Netflix has brought to Formula One. So we now have the world covered, because North America was a weak spot for the sport for many years, and our demographic, which, you know, every every sport wants, every consumer product wants, which is effectively what we are, is you want tomorrow's audience today, and that's the youth, and you want a diverse fan base. And when you come down to, you know, the Almighty spending power of consumers, you want a nice balance that represents the world. And so that's what's I think what surprised me is it grabbed those audience and geographies, but how big it made it? It's like, we're not just on the map in North America now, we're big in North America, and it's super

David Novak 5:52 

cool. Yeah, it is cool. And you know, for someone who's just getting into the sport, what's one detail or nuance that you should be paying attention to that. That'll give you a deeper appreciation of racing.

Zak Brown 6:06 

Well, I think it's a great question, because it's something that I've been a bit vocal with on Netflix and the broadcast. If we look at how we need to evolve our fans and grow our fans, our sport, the technology in it, the strategy behind it, is insane unlike any other sport. And I think you know, you've got different levels of sophistication and interest in technology, so we need to kind of tee it up at the right level, or right levels dim, depending on our audience, but if people had an even greater understanding and insight to what these race cars and race car drivers do, like the sheer speed, like, it's impossible to actually describe to someone how fast these race cars are. But there's ways you can do that, the amount of technology we talk in terabytes. And I remember the first time it was like, I nod, like, I know what a terabyte is, but actually I didn't at the time, so I was like, kind of give me terabytes for dummies. And it was Zach, that's like, 10 million documents. It's like, wow, that's how much data we pull off of a race car to race weekend. So I think if we can now that we've got the fans interested, they love the drama, The on track, the 20 drivers, the teams, but show them really how our sport operates, but pitch it at the right level of interest level. I think people would be fascinated if they knew kind of what I was looking at during a race on pit

David Novak 7:40 

wall. Well, you know, McLaren racing is involved in more than just Formula One. You know, it'd be great if you could just give us a snapshot of the broader business and all you're responsible for as the CEO.

Zak Brown 7:53 

We're a Formula One team. We're an IndyCar team, currently a Formula E team, and now going to become a World Endurance Championship team, which is Le Mans. I'll go back to you know why. So obviously the center of our universe is Formula One, and always will be. However, North America is one of, if not the most, important market for most companies, huge fan base, great economy, and until Formula One took off in North America, we wanted to have a competitive difference to our former other. Formula One rivals with our fan base and with our corporate partners and have a bigger presence in North America. Even though Formula One's taken off in North America, we still want to be bigger in North America than our competition. Just kind of the rationale behind why we're in IndyCar racing, the World Endurance Championship, which is the 24 hours of Le Mans we've just announced entry into. We're going to go into in 2027 that's where all the automotive sports car manufacturers play. You see our competitors, the Ferraris, the Lamborghinis, the Aston Martins, the Porsches, and it's a natural racing series for us to really collaborate closely with our automotive business. So that's why we're in the World Endurance Championship. You put those three together, you have what's called the triple crown, which were the only team to have ever won the Triple Crown, which is the Indy 500 the 24 hours Le Mans and the Monaco Grand Prix. But we did it in different eras, so kind of in different eras of our brand. We now are the only team in the world racing in in those three huge, really the three biggest racing series. And so that offers us diversity of opportunity with with fans, geographies, technologies, and for our corporate partners, who, you know, might go, Hey, Zach, this is a priority market for us. Or this is, you know, we want to get closer to the automotive business. And so, you know, it's kind of like we're a. Restaurant, and if you have something more than just one cuisine on the menu, you got a greater chance to appeal to a bigger audience. You'll know something about that,

David Novak 10:08 

you know, I'm curious. Just walked into that one. You're good. You're good. I can see why you're where you're at, you know. But you know, you mentioned F, you know, Formula One taking a little longer to really develop here in the United States. Why was that? And then, as a leader, how do you think about tapping into this opportunity now and really getting to explode here?

Zak Brown 10:31 

Kind of three primary reasons why we hadn't been popular in North America. One, we never really found a permanent location, you know, dating back to the 70s. You know, you were Long Beach, then you were Watkins, Glen, then you were Dallas, then you were the parking lot in Vegas for two years. Then you were Phoenix, then you took 5678, years off. There was no Formula One north. Then we came back to Indianapolis. Then we had this tire tire gate, as we called it, so we didn't put on a good show. Then we disappeared again. So you're not going to have any sport be popular in North America if you're not there or you have no date or location equity. We also were a sport that was very exclusive, or perceived to be very exclusive and not very inclusive. And that's where, when Liberty came in and acquired the sport, they went by the sports huge, but it doesn't really engage with its fan base, like the NBA, the NFLs, the MLBs, you know, even the premier leagues, it was kind of look but don't touch. And I think that was fine for a long time, but now we're when we're in an era of engagement, not awareness. We weren't engaging with our fans. We weren't letting them inside. We were Look, don't touch. And so when Liberty bought it and you had the Netflix come in, we started kind of letting people see behind the curtains. People went, Wow, this sports, awesome. I've never seen that before. I've never been close to it before. Then we get, you know, over time, three races started with Austin, which is one of the best Grand Prix on our calendar. So, you know, you went from being not here exclusive to here inclusive and very focused on engagement. And I think what Formula One is, has learned and continuing to learn is sport, is entertainment, you know, and you'll hear sometimes in Formula One where we go now we're not entertainment. It's like, well, as far as I'm concerned, if you buy a ticket to sit in a seat to watch a movie of motor race, a baseball game, a rock concert, a fireworks show, you're going to be entertained. And I think the sport has now embraced that there's an entertainment aspect of what we do and and the fans are responding accordingly.

David Novak 12:55 

You know, it's it is taken off big time. But I want to take you back a little bit. You know, you talked about how you first got into racing when you were 10 years old. That's when you found your passion. But do you have a story from your childhood that really kind of impacts the way, how you lead today and want to, want to take charge and get results? I

Zak Brown 13:14 

think more than having one, I've got hundreds, if not 1000s. And you know, I was fortunate back when I was racing to hang out with successful people at an early age, people like yourself, because when you're racing cars, you've got CEOs around you. And so it was a great education for me, and I was always very interested. I had to fund my own racing career through sponsorship. So I needed to understand how business worked, so I can understand how I could deliver motor racing sponsorships to build their business. So instead of kind of, you know, I'm an advocate of everyone go to school. It's what I told my kids, they're doing a great job. One's graduated and one's close. That wasn't my background, but I got mine by hanging out with CEOs of these great companies, seeing how they worked, what they did great where they had some blind spots and and learned along the way so much of what to do, what not to do. So I, you know, I've kind of developed my own ways of working, if you'd like, but it just comes from years of being around successful individuals, and, quite frankly, some unsuccessful individuals, to go, oh, I would do that. I wouldn't do that. And a lot of what I do today are things that I've seen and I've learned from from my mentors. I've got an advisory board of 20 people that I had at my old company, that I've always had, which is kind of a build on surround yourself with great people, whether you work for them, they work for you or their their mentors, and for us, they're very engaged. And I just learned a lot over the years.

David Novak 14:58 

So how. You describe, maybe in one sense or two, just your formula for success.

Zak Brown 15:05 

So I'm a classic workaholic, but there are many people that are work workaholics, but it's probably a pretty common theme, and that's great most of the time. But as you'll know, that you know, comes with some some challenges and balance issues. So I run very hard. I've kind of done all the jobs myself, not on the technical side, but as far as you know, I started my own business. So when you start your own business, you're your own receptionist, your own CEO, your own marketing director, all and financial director all at the same time, when you're the one and only employee, so I'm comfortable getting my hands dirty, also very comfortable delegating. That was an art I needed to learn, because when you're a one man band, you delegate to yourself. So that's something that I think I've matured at over the years, and recognizing it, being able to get people that are much better than you in aspects of the business. I believe in fun, because who likes to be around miserable people? So I think the amount of push I put on my people, if my team, if I didn't do that in a fun loving way, I think they wouldn't like me because I, I push hard. But by the way, I push myself hard, I lead by example. You know, no, no one's kind of sending more emails or on more plane flights than then, then myself. But I, you know, the minute I'm not ribbing you, you're in trouble. You know, so, and I think I can get away with pushing really hard, because I have a tremendous amount of respect for the team. It's my way of saying, I love you, but Go, go, go, go, go, and then you got to, obviously surround yourself with people that like that energy and aren't put off. But I'm, you know, I've met a lot of rude people over the years, and a lot of people are like, You know what, there's not enough money you could pay me to want to work for you or work with you. And so I've never wanted to be one of those guys that people didn't want to work with me. They they may not love how much I push them all the time, but they know it's coming from a good place. And you know, I'd like to think I take care of of of everyone, because they they do work, work their butt off.

Koula Callahan 17:24 

Hey, everyone. It's Kula from how leaders lead. And if you've watched our podcast for any number of episodes, you probably know that a common theme from all of the great leaders we interview is that they are active learners. They have this commitment to continuing to learn and grow, so that they don't say stagnant and so that they continue to see success in their leadership and in their life. This theme of active learning is so important, and it's what David's latest book, how leaders learn is all about. It's all about helping you develop that skill of active learning so that you too can continue to see success in your leadership and in your life. The book is really entertaining. It pulls stories from some of our greatest podcast guests and pairs those stories with insights that you can incorporate into your leadership and into your life right away. Grab how leaders learn on Amazon or wherever books are sold, and I think you're really going to love it. You feel David's personality through the pages and through his storytelling, and it's a really powerful way to level up your leadership.

David Novak 18:23 

You know, our mutual friend Jeff Yang told me that you had quite the journey in high school. You know, tell us

Zak Brown 18:30 

about it. Yeah, he sees he's heard all the stories. Yeah. I, as I alluded to earlier, I was not a fan of school. I went to a few different ones. Never, never graduated the final one. And I was, I was kind of a punk, a bit of a fighter, terrible grades. And I think looking back on it now, there's probably things that you take today for, for it, and, you know, if I was into something, you look at my report card, it was, you know, f f f f A in baseball. I love baseball, you know, d, d, d f f A in work experience. So I was a kid that, and I kind of still am today. If I love something, I was just awesome at it or tried to be awesome about it, and if it was something I didn't want to do, I just didn't show up. Now, you know, you can't do that in today's world. You got to take the good with the bad. But fortunately, there's a lot more good that comes along with the job than than bad. But I think I was just a kid that wasn't interested in, you know, world history at 12 years old, and, you know, coming back to the fighting part, the Jeff's probably alluding to my final year of high school, which was my third high school, I wasn't known because I hadn't grown up through the system. So I was like, people didn't know me and had a little. Altercation that ended up with me breaking the high school president, school president, not the, you know, student jaw in a in a fight. And that was, you know, I had some anger issues as a kid, so he's heard all of all of those stories. Now I'm a gentle teddy bear. I leave my my competition on the on the racetrack, but yeah, I was probably one of those kids that in high school was, you know, most likely to, you know, end up in a bad place, would have been end up running a Formula One team well, and that's

David Novak 20:34 

what you've done. And you talk about the importance of falling in love with what you did, and you made A's and doing that, and you fell in love with racing, and you became a race car driver. And what did competing behind the wheel teach you about leadership?

Zak Brown 20:47 

I get asked that question often, and I think I've got a great answer, because so many similarities. So if you think about what you do as a racing driver and what you do as a CEO, you start with, got to surround yourself with great people. You're only as good as the race car that you have the people that are built in the race car. So I learned from being a racing driver. I raced with some great teams. I worked raced for some terrible teams. And you know, it's all about the team, it's about the culture, it's about the loyalty. It's about how hard everyone works. It's about how smart they are. It's, you know, you know risk taking. So you got people and team, but then as a racing driver, you need to know how to communicate. Well, because you got to go, I'm feeling this in the race car, if we need you also need to know when to shut up and listen, because your engineers are telling you what you need to know to drive the race car better. So you have to have a great talent of communication, which is, you know, going out and coming in, you got to have trust. You know, driving a race car, 200 miles an hour, if you're not confident what you got going on around you, you can hurt, hurt yourself. You need to know risk versus reward. You know, do you make that pass? Well, it's going to cost you a position, or you're going to hurt yourself. Same thing in business. What revel level of risk are you prepared to take? What are the consequences if you get it wrong? What's your fallback plan? Oh, okay, I missed the pass. I got repassed. But hey, it's halfway through the race, so I can go again, versus a last lap pass where it's like, I got no chance now. And so that risk versus reward, communications, trusting people, surrounding yourself with great technology, and then being awesomely competitive. And then when you listen to a racing driver do a debrief, it sounds like all we do is complain, because all we're trying to do is go faster. So you have 15 corners on a race track, and you might be fine in turn one. So you don't talk about turn one, but if you're not good in turn two, you spend all your time talking about, how can I be better in turn two? And is it under braking? Is it getting on the throttle? So you break down turn two into all these kind of it's not one corner. A corner is got about 10 segments to it, from breaking, coming off the breaking, turning and going back, and so taking that same mindset to business. And this is where I think my team likes how hard we push. I'm just trying to go a little bit faster today than I did yesterday, and then that means you got to be real with yourself. You got to be challenging each other. You got to be going, you know what? Yeah, we've won seven out of nine races, but we had a lot of close calls this weekend and and so we can sit here and pat ourselves on the back and go. We finished first and second, but actually we were pretty close in very small ways that, you know, no one will ever see that, you know, we knew that were going on. It could have been human error, because we put them in a position for human error to mechanical failures. And so taking that same approach to business, that, yeah, business is great, but of course, it can always be better. And if you can get in a mindset where you're just trying to do better every day, then that's what gets you kind of up and at it every day, pushing, pushing hard.

David Novak 24:09 

So you know, as you transitioned into business sack, what was the single biggest skill that you had to pick up, and how'd you go about learning

Zak Brown 24:17 

it? Probably, so I was always good at the racing side of the kind of social aspect of a business, right? You got to get out. You got to do deals and create partnerships and work with people. So I've always been a people person, because I wasn't well educated the understanding the mechanical fiscal elements of business was something that, you know, when I was running my own business, my level of sophistication was, do more people owe me money than I owe them? Do I have more contracts today than I did yesterday? And that was kind of how I balanced the. Books, obviously, I mean, it's a great start, but when I had private equity that invested in me, they started going, Zach, I bet you have some business that actually isn't good business. You think it's good business, but there's this thing called margin, and there's things that go into margin. And so that was the part in business that when I had it was spire capital, who invested in my marketing agency, who really started to take me through an education of, I couldn't read a balance sheet, barely read a P and L balance sheets are still could be a bit tricky, and so getting that education, because ultimately, data is hugely important to running business. It's not the end all be all, but the more data you get. It comes back to my being a racing driver. You get data. You can understand how to start moving the needles. And they helped me become a better business person by understanding the economics and mechanics of a business. And they were right. I had some accounts that maybe were smaller sponsorships, but were actually better accounts than the bigger sponsorships, because the margins were out of balance. And so that was something I learned from, from the PE group that I carry with me today, and I'm now much more

David Novak 26:13 

comfortable. And you did, found this great marketing agency just marketing International, and you build it into the largest motorsport marketing agency in the world. What was the pivotal moment, that pivotal growth decision that you made that took JMI from startup to the top in the industry.

Zak Brown 26:35 

People were telling me early on in my career, hey, you're really good at this sponsorship stuff, you should stop racing and but you know, when you're in the middle of a racing career, it's like, no, no, I'm a racing driver. All this sponsorship stuff is that enabled me to go racing. Then the last couple years of my racing career were not fun at all. Coming back to you got to have fun. So if I'm not having fun at something, I'm losing interest from doing it. I was having fun in business, because business was growing. I was winning in business. I was losing in racing. And then everyone's telling me, you got to make the jump. When I eventually made the jump and stopped racing in 2000 business went from that to that because I was just totally focused and had no longer had the distraction of racing, I was able to give 110% of my time to the business and get into full fun winning mode. That's when business took off.

David Novak 27:32 

Yeah, and at JMI, you paired brands with with with racing, and now you're doing the same. At McLaren, you're bringing in these sponsors, and they're paying huge amounts to tie in with your great teams. You know, how do you look at negotiation? And you know, are you one of these guys that looks for the win? Win? Are you? Are you just trying to kick everybody's ass

Zak Brown 27:57 

always? Win, win. I've always played the long game. Well, if you're partnering with us, it's the it's win, win. If it's competition, we want to, we want to beat them every time. But you know, to this day, so you know, it's really cool. Hilton, who's in their 20 year anniversary with McLaren this year. I did that deal back in my agency 20 years ago, which is really cool to kind of come full circle. And so I've always played the long game. I've always left the dollar on the table, because I've been in this business now 30 plus years, and you can accumulate a great amount of success in relationships if you play the long game. And I know there's been opportunities where I could have played the short game and maybe had a bigger win at that moment, but I'm not sure I'd still be, you know, on the same trajectory we are now, 30 years later. So I'm a relationship guy, which I mentioned from day one. So I'm not one of these, of your business card, you've just moved on, you're not relevant to me today. I no longer know you. It's amazing how many people I see take that approach, kind of once a friend or a business partner, always a friend, always a business partner. And you can do so much better working with people over 10 years if you dial down the greed. Volume a little bit than dialing up the greed volume, and it's a three year relationship. I'll take the 10 over the three all day long, because the 10 actually wins, even if it feels over the first three years, you could have won bigger. And that's very much my mindset and partnerships. And so I think the reason we've been very successful in our sponsorships is we're totally focused on it's clear what we want. We need partners to, you know, help fund us, help bring technology, help us grow our our fan base. And so we're only going to approach companies that we think. Bank can do that for us, and therefore we can do it for them. If they don't have a same fan base as a McLaren fan base, why approach that company? We have two different audiences. And so we also know, in order to stick around with partners for 20 years, you know, you got to be flexible, adaptable. Understand their business. Understand that their business does this when things like COVID happen or economies hit, or situations happen, and so I've never been one that have said, Oh, sorry, that's not what the contract says. Always take a long range view during COVID. We didn't lose a single partner, and we went to them all proactively, to work with them, because we knew we were in pain, but we knew they were in pain, but we knew we could reduce our short term pain if we just went contracts, a contract, because no one had a COVID clause, but all those partners are still with us here today. So we took some pain. We already had our own pain. Took some pain with them, but now we're commercially the most successful racing team of all time, and I think that's because of how we play the long game.

David Novak 31:07 

You know, when you took over McLaren racing in 2017 the team was in a pretty tough spot and rough spot, you know, what was the first priority you had in in turning things around,

Zak Brown 31:20 

one to understand it. And you know, this team had a culture of arrogance in it over time and when we had which was well documented. You know, Honda came in, Honda very much struggled, but we convinced ourselves it was all on Honda. You take the Honda out, you put the new Renault engine in, and all of a sudden it's like, oh, I think we had a lot to contribute to our lack of success. So that was a big wake up call for us. And you know, we had a culture that wasn't transparent, that was had a lot of conspiracy theories going on. Everyone was kind of guilty until proven innocent. So if someone was left out of a meeting, instead of going, Hey, there's 21 people in the meeting, everyone always forgets that name that they should have had instead of kind of, hey, maybe they just forgot. It was, oh, that person doesn't like me. There's a reason why they're going to fire me tomorrow. It was like, so you had that type of toxic culture going on. We hadn't treated our partners well. We thought we were still the dominant McLaren, and we were guilty of being that exclusive, lacking engagement. That's not what the contract says environment and so what ultimately walked into was our worst on track performance ever, our lowest amount of sponsorship ever, and a disgruntled workforce. And I say other than that, everything was great and and the one thing that was great was our brand and people's passion. It just needed to be all recalibrated.

David Novak 33:09 

So it sounds like you basically transformed the mindset and, you know, and you know, then you mentioned too that technology is such a huge part of racing today, and you know, you know, it's sort of like whoever can build the fastest car can often come out the winner. You know, obviously you need a good driver, but you know, that gives you the big edge. Is there anything that you've done that's unique that's brought the team together to unlock the performance on that front, the technology front,

Zak Brown 33:41 

yes, and so, and I don't know that it's unique or not, but it's, it's what we've done. We every person at McLaren knows how they contribute to putting performance on the race car. And I'll come back to the technology specifically in a second. In the entire organization McLaren racing now is about 13 150 people, about 1000 people. About 1000 of those are f1 and what do I mean by that starts with the fan, if we didn't have great fans. Well, how do you engage with your fans through your communications and your marketing department? Then your commercial department goes and monetizes your fan base with your commercial partners who are investing in your racing team. You've got to have an unbelievable culture that comes out of your HR department. We have a cost cap, so we have to spend very wisely, whether it's on the race car, our people, you got to have a great finance department. Those are all the departments don't actually touch the race car. But without those departments, you're not able to then hand over, if you'd like, and work hand in hand with the technical team to have the wind tunnels, the CFDs, to be able to afford the great drivers, the great engineers. So everything leads to, we have a very much a performance mindset that everything you do at McLaren leads to, per. Performance on the race car, the technology itself, that is where a lot of our corporate partners come into play. You know, sponsorships now very much moved on from a sticker on the car, that's an aspect of it, but now we have two different types of partners, either kind of B to B, who might deploy very specific technology on the race car, or they might deploy technologies the work days of the world, the Ciscos that help us operate better, communicate better, and they're integrated inside our racing team, our new wind tunnel, Dell did all our CFD. Or if you're not a B to B, you're a consumer brand, you're a MasterCard, a monster. You're helping us engage in a very inclusive way with our fan base. And where I started was it all starts with the fan. So our par, our corporate partners now, yes, they're writing us checks. They're putting their brand on our car, but they're either helping us run our business better, develop our race car better, or our people better, or helping us be more engaged with our fans, because right now, our brand, we're the most popular brand in Formula One. We're either loved or liked, and the hats off to our racing drivers and our comms team and the way we engage with our our fans. But my favorite stat is we're the least disliked team. So you know, we're not polarizing. You got other teams in sport where they love them, they hate them. McLaren, you kind of love us or like us, and that's a great place for us to be, and everybody contributes to that, especially our consumer partners, are helping us engage with our fans.

Chris Gheysens 36:38 

We'll be back with the rest of my conversation with Zach Brown, in just a moment, Zach wants to make sure everyone on his team knows how their work connects to the big mission. And for McLaren, it's pretty straightforward. You gotta win races. But for other businesses, you've got to define that higher calling, which is exactly what Chris geisen is doing at that beloved convenience store called Wawa. That's right, Wawa, it's not about showing up at Wawa and making sandwiches or, you know, keeping the floors clean or running register. It really is a place that becomes the town center for many of the communities that we serve, and you are going to see your friends, your neighbors, the people that you go to church with, or go to soccer with or friends with, and they're going to see each other, and it creates this really unique environment we talk about and analyze a lot inside of our stores. It becomes the town hall. And so that higher calling for our associates is make this the best 345, minutes of your friends and neighbors day, that's your higher calling join in that. You know, over a couple million people a day visit owawa across our company. Wouldn't it be a wonderful thing if those communities had this place where they could come and take a breath from and break from the hectic world they're in, just to get that little recharge, not just functionally food and drink, but also emotionally. And trust me, when I say that, there are 1000s of evidence points around that, that we really create in this, you know, this emotional connection that transcends anything that a business should do. But it's wonderful people at Wawa doing that every day. Go back and listen to my entire conversation with Chris, Episode 130 here on how leaders lead. You know, I understand you mentioned the budget cap, okay, you know, I understand you were the lead protagonist to really, you know, make this come about. You know, why did you think it was important? And what was your biggest challenge in taking people with you to get that done?

Zak Brown 38:44 

Yeah, that was a huge and we were lucky on timing from a COVID point of view. Obviously, COVID was a terrible thing, but it put the sport under an immense amount of pressure, and that was right when we were talking through the budget cap, which was actually going to be significantly higher. So we got a little bit lucky with the timing, because it allowed me to push even harder to get the budget cap down. And at the end of the day, you know, why is the NFL probably the best business model, and why you can have a small market team beat a big market team, why you don't have the same team that wins 10 in a row? It's because it's the most balanced from a sporting fiscal basis. And Formula One became a sport of who, how much can you afford to lose, and especially in our sport, where you got technology that buys speed, and when you have big OEMs that are getting the great commercial returns, therefore have big marketing budgets, they can afford spending 500 million a year because they're getting a return. So it's money, well spent. Well, we're spending half that. How can I possibly be someone who's spending twice the amount we are? So the cost? App was critical. So last year, we had seven multiple winners. First time I ever recall that amount of winners in Formula One, four different teams that won races. The top three teams Swapped the constructors championship late in the year. And that's because now we're all playing with the same size bat. We all pick a sport, we all have nine players on the field where the sport was pre cost cap is some, some teams had five players on the field. Some teams had 15 players on the field, and they were all all stars. And now we've got sporting parody, and that's driving competition on track. And I always felt that then comes down to may the best team win the Best culture, who does the best job, not who doesn't spend the most amount of money? Because I knew I couldn't compete with who can spend the most amount of money, but I felt I could compete with who can put the best racing team on the field. Yeah,

David Novak 40:53 

it makes a lot of sense. But how did you get these guys who had all the money to agree? Well,

Zak Brown 40:59 

it was fortunately so it was very difficult, because there were three teams that were outspending everybody. So you can imagine their starting point was no way. Then they kind of started to roll in with, you know, having their own fiscal, you know, responsibilities, and they were kind of pitched at different levels. The team that was kind of spending the most, and to this day, would not want a budget cap. Others understood. They just wanted it to be higher. I think the benefit we had is that's exactly when Liberty kind of acquired the sport they were, pretty fresh in a couple of years, it was always on their agenda. Same thing with the FIA. So effectively, the three teams had to get in over time. And you know, ultimately you had the weight of the industry all wanting it, you know, and that it won out. And then I think you add in the stress of COVID, at that time, it was kind of the perfect storm to seize the opportunity to get the sport in a place that you know it's massively benefiting from. Now, Zach,

David Novak 42:12 

you obviously are arguably, you have the best drivers in the sport, Orlando, Norris and Oscar piestri and and on any team there, there are star players. What have you learned about leading high performers like that?

Zak Brown 42:30 

It I think it helps that I used to race, so I understand a lot of what they're going through. It's all about transparency, being fair, being equitable. And you know, we're going to make mistakes, and we haven't talking about them. So you know, when we have upgrades on the car and we can only give them to one driver for a race because two aren't ready, we tell them why. We don't let them find out by reading a show. He's got a new front wing. I don't, so we give them the rationale. We keep score. Hey, next time we get a new development or, you know, we need to. We're in a position where one driver gets a benefit the other can't. We kind of keep score. They're good guys. I mean, we're very fortunate. I think we definitely have the best driver lineup, which has been proven now that not only the two of the fastest drivers in the world, the two really good guys that are very competitive, but they're very respectful. They've been brought up well, so hats off to the parents. Most things, you know, go back to the parents at at some point, right for all, for all of us, and I'm not sure what that makes my mom and and so just keeping them close, having fun, making sure issues, you know, you can see from the outside looking in, at least my perception, where I've seen drivers go at it in the past. And so I think we have a good sense for when there's a little bit of tension in the room, and really say they're there, there hasn't been and it's going to get tougher, because it looks like our two guys are going to fight it out for the world championship, and the others aren't far away. So I don't think it's just the two of them, but if everything goes according to plan, it will be and, you know, they usually add in tears, but it's not with us, and we're not afraid of it. We talk about it. It's not the it's not the elephant in the room.

David Novak 44:24 

You know, you you're in such a speed business. I mean, you know you have to make decisions quickly at a time, quickly many times. You know, what's your decision making process when it comes to how quick you make them and how thoughtful you are about how do you how do you look at that whole thing

Zak Brown 44:40 

question. It depends on what it is and how much time do I I have? So you take it to, you know, five year business plan. I've got a five year business plan. It's rolling every year. We update it. I got time. We have set times of the year. You'll know the drill. And, you know, I'm very thoughtful. Thoughtful and get everyone engaged. And you know, those are big decisions, but lots of consulting, lots of data, you know, you're not in a rush. The opposite end of the spectrum is you're on pit wall. It takes 20 seconds to get into pit lane. It maybe takes 18 seconds to prepare tires. You have an incident that happens when the driver's two seconds outside of the Pit Stop window and you need to make a decision, are you pitting now? That rests with the subject matter expertise, which is spread all throughout the team. If it's a reliability issue, a tire issue, a pit stop issue, a strategy issue, where if you need a pit stop now and an incident happened at 22 seconds, you got two seconds to make a decision, so you're not having a conversation. Everybody knows in that instance, because you've kind of pre rehearsed if a safety car comes out, we need to make a tire decision, and we don't have time to consult who makes that decision. And that's where you see teams, you know, ourselves included, you know, can get it wrong, and that's because you hesitated, or you did try and consult, or you made the wrong decision because you You panicked, or you weren't prepared. And so you know, we've got everything from two seconds to make the decision, and then that decision is unilaterally made by the person that's the decision maker on that decision up to, you know, get my whole leadership team around a table and working on a project for six

David Novak 46:32 

months. So you basically have a preparation process from the two second to the long term strategic plan. Correct, correct, that's it. Correct, yeah. And, you know, Zach has been a lot of fun, and I want to have some more with my lightning round of questions. Are you ready for this? I'm ready. Okay, the three words that best describe you relentless, fun and fair. If you could be one person for a day besides yourself, who would it be? Mickey Mantle your biggest pet peeve ASAP. What do you have more of cars or dogs?

Zak Brown 47:03 

Cars, but I love them both. I'd like to have more dogs. So that'd be a lot of dogs.

David Novak 47:07 

What's your favorite track on the f1 calendar? Has to be Montreal. I understand you're a big golfer who's in your dream force. And which course are you playing at?

Zak Brown 47:18 

Well, you got to be playing Augusta, which I've had the privilege of playing, and I'd fortunate. We got a lot of golf buddies, so my foursome of golfers would be Justin Rose, Ian Poulter and probably Colin marukawa,

David Novak 47:36 

all great guys. What's, what's the one thing you do, just for you

Zak Brown 47:40 

baseball sports, sports memorabilia collected. Do you have that Mickey Mantle card? I have a lot of Mickey Mantle stuff. I used to have his card. I got rid of my baseball cards. I've got that same sad story we all

David Novak 47:52 

have, besides your family, what's your most prized possession? My cars. If I turned on the radio in your car, what would I hear? Hall of your favorite prize possession, your favorite car. That's

Zak Brown 48:04 

easy one, my 1991 arrotton, Senna, McLaren, Monaco, winning championship car. It ticked every box.

David Novak 48:12 

What's something about you? Few people would know I'm a thinker. What's one of your daily rituals? Something that you never miss? Coffee. You're out, you're out of the lightning round. Great job. And I got a few, few more questions. We'll wrap this up. You know, you know there's leaders have the balance between vision and execution when you know, when you think about vision and where you're taking McLaren, and get a what do you see for the future

Zak Brown 48:39 

now that we're in the three racing series that we want to be in, which was kind of my, my dream when I took the job, and will be in those three racing series now by 2027 is, you know, not getting complacent. We want to win on the track, off the track, but kind of do more of the same. And it was interesting. Andrea Stella, who's our team principal, does an outstanding job. He was talking today, do more of the same, but our world changes every day, and that's what's exciting. So you know, more of the same is don't keep doing the same stuff, but keep doing what you do every day, which is being flexible, adaptable, motivated, trying to do better every day, learning from your mistakes. So I think we're in a good place now. We need to execute and not get complacent.

David Novak 49:26 

The other thing Zach, that I've learned about you is that you're a tremendous learner. I mean, you really love learning. You talk about it being important for your organization. You know, how do you drive that concept deep in your in your company,

Zak Brown 49:40 

asking a lot of questions, having people be comfortable asking lots of questions, people challenging each other, and obviously in a respectful way. And then, you know, there's times to, you know, I'll go into my leadership team meeting, sometimes I'll do 180 degree because I've heard something better out of my leadership team. Him. I wanted to come up with an idea, put it on the table, to get the conversation going, but getting people comfortable with going was actually, he was really passionate. He wants to go that way, but then knowing, actually, we think we can tell him to go that way with some good rationale. And so trying to get everyone to be, you know, put their ideas on the table, but listen to other people's idea. Don't be so proud that everything has to be your idea. And ultimately, I'm a fan of diversity and diversity of people, because I think you get diversity of input. And it comes back to our world of data. If I have 10 people all telling me what I want to hear, it's not really good data. If I have 10 different people from 10 different walks of life with 10 different types of experience, experiences, all giving me their view on an issue. I got a lot of data to look at there to make a much smarter decision, because I recognize not everything's always right just through my lenses, just most of the time.

David Novak 50:56 

And if you've said it a few times in this conversation that you're a workaholic. What do you do and or, How do you know when it's time to tap the brakes so you don't break the engine

Zak Brown 51:07 

that I wouldn't be on that podcast of, how does one find great balance in life? So I have improved on it, because I actually recognize that being flat out all the time isn't as productive as you think it is. So obviously, when you're younger, you're just go, go, go, go. But the old phrase of, you know, work smart and hard, not just hard. And so sports, friends, of course, family and I happen to love what I do. So while it's very stressful. It doesn't really feel like a job. I'm kind of come back to my first exposure at Formula One, when I was 10 years old. I'm doing that so in many ways, I still feel 10 years old. So that probably lets me work as hard as I do, and maybe carry a little bit less stress, because I got fun blended into it. But I'm for your like

David Novak 52:05 

sounds like you're like Warren Buffett, who says he tap dances to work because, you know, he loves what he does. You know, is there? You know, is there anything you picked up Zach about leading, you know, in business and sport, that that you tried to carry at home when you think about your family, yes

Zak Brown 52:23 

and no, one of the biggest things that gets me in trouble is when I get home, when they say, Dad or husband, get out of CEO mode, you know? Because, you know, it's like, you kind of walk through the front door and I come home from a road trip, I'm type A so I can be a bit, oh, that light bulbs out, and it's like, man, Dad, you just got home, you know? But so I actually have to kind of get out of CEO mode when I when I come home, but looking after people. I think that's the commonality, right? Is, you know, I've got two sons, a wife of 25 plus years, and four dogs running around, and I feel an obligation to take care of them. I feel an obligation to take care of everyone here at McLaren. So I think that's a commonality, is and trying to create happy, fun environments.

David Novak 53:12 

You know, last question here, Zach, what's one piece of advice you'd want to give to anyone who wants to be a better leader?

Zak Brown 53:17 

Definitely easy surround yourself a great people, you just can't do it by yourself.

David Novak 53:22 

Fantastic. And Zach, I've enjoyed this conversation very much. And, you know, I had forgotten this, but I remember I probably made one of my biggest mistakes in my career. You came and tried to pitch me on NASCAR. And, you know, at the time, you know, at young brands, I didn't think we were quite ready for it. I don't know where young brands would be if we hooked it.

Zak Brown 53:41 

Well, yeah, I think it's all ended up okay. That was maybe a missed apex or a qualifying lap, but I wouldn't say that was a car crash.

David Novak 53:50 

You're the best. Thank you so much. Awesome.

Zak Brown 53:52 

Thanks for having me

David Novak 53:59 

on. You know, Zach has a world of data at his fingertips, and you can tell he uses it well. But as well as he's focused on performance, he's just as focused on people. He's intentional about surrounding himself with great talent, and just as intentional about helping each person see exactly how they contribute to McLaren's biggest goals, because when people understand their role in the mission, they take ownership, they bring more energy, and let me tell you, that's when great teams really start to move. So here's your challenge this week, find someone on your team who might be a little disconnected from the bigger picture. Take a few minutes to help them see how their work drives your mission and make it our mission, that clarity might be the boost they didn't even know they needed. So do you want to know how leaders lead? What we learned today is that great leaders make sure performance is everyone's job. Coming up next on how leaders lead is Michael Gervais, a high performance psychologist and founder of finding mastery, which helps gold. Medal Olympians, elite athletes, as well as organizations like Nike, Starbucks and Microsoft, unlock their potential. So be sure you subscribe on YouTube or wherever you get your podcasts so you don't miss it. Thanks again for tuning in to another episode of how leaders lead, where every Thursday you get to listen in while I interview some of the very best leaders in the world. I make it a point to give you something simple on each and every episode that you can apply to your business, so that you will become the best leader you can be.