Jordan GP: Formula One at Heartbeat Speed Maria Paola Vercesi CASE STUDY
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ECS_02W.qxd 1/11/2004 10:56 Page 1 Jordan GP: Formula One at heartbeat speed Maria Paola Vercesi CASE STUDY This case study considers the leadership and personality of Eddie Jordan and the historical evolution of Jordan GP Formula One team as an entrepreneurial business organisation. It was built and run on differ- ent strategic premises to its direct competitors and entirely managed by Eddie Jordan. The case study focuses on the relevance of individual decisions, cultural influences and leadership style for the success of company business strategy. Consideration is also given to where Jordan GP and its leader are headed now, and what solution should be searched and implemented to ensure further entrepreneurial vitality, and to find opportunities in the changes and challenges that currently face the Formula One arena. In doing so it allows readers to consider the applicability of the lessons learned from the Formula One cases. lll EDDIE JORDAN: ‘. the bottom line is this: F1 busi- to leave this buzzing venue. He looks energetic and ness is tough. ...In many ways, just as in 1991 when self-confident in his yellow-black Jordan uniform, we entered the sport, Jordan continues to perform a but the business bag he has in his right hand seems giant-killing act.’ very heavily laden, full of papers about both business (J The Official Jordan Magazine, Spring 2002, and sporting issues. As the defender of the small ‘Editorial – In his own words’, p. 6) teams’ interest and survival, since the 2002 season he has passionately supported the establishment of a set of new rules aimed at cutting costs and Prologue: the price of improving the chances for the smaller teams. Now exclusiveness that those rules – such as single-lap qualifying and the regulation that awards points up to the tenth The podium celebrations have just finished at the position – are finally in place, they have astonish- Italian Formula One Grand Prix 2003. A snake-like ingly proven beneficial to every contender other line of fans with images of speed still in their eyes than Jordan GP. Moreover, a long hot summer of a drive slowly through the narrow roads of the an- controversial court defeat and the consequent bad cient villa and park of Monza where the track now publicity has negatively affected both the team’s lies silent. Behind the solid fence of the paddock, morale and Eddie’s individual reputation. luckier guests still rush among the teams’ motor- On his drive to the airport, Eddie ponders Jordan homes to gain a few seconds of attention from GP driver Fisichella’s contentious victory at the Formula One stars – an autograph, a photo, or Brazilian Grand Prix early this season. Under hard simply a glance seem like sharing the thrill of lives rain, after the withdrawal of eleven cars and a on the edge. Journalists and cameramen gather in bad accident, the race was stopped with Fisichella knots around drivers, managers and technicians to temporarily in the first place as a consequence of know the details of their teams’ performance. the team’s pit-stop strategies. However, the stewards Eddie Jordan, founder, chairman and chief execu- and timekeepers of the Federation Internationale tive of the Irish team, Jordan GP, is among the first de l’Automobile (FIA) awarded McLaren’s driver This case was prepared by Maria Paola Vercesi, The Michael Smurfit Graduate School of Business, University College Dublin. It is intended for class discussion rather than as an illustration of either good or bad management practice. © Maria Paola Vercesi, 2004. Not to be reproduced or quoted without permission. ECS_02W.qxd 1/11/2004 10:56 Page 2 2 Jordan GP: Formula One at heartbeat speed Kimi Raikkonen with the Brazilian victory. While a The climate of rising running costs and inade- second placement would be the best result of the quate revenues from broadcasting rights, associ- last four Championship seasons for Jordan GP, ated with the withdrawal of sponsors and partners that decision deprived Giancarlo Fisichella, Eddie that followed the global economic downturn con- Jordan and the whole team of the rare privilege of sequent to September 11, had exposed Jordan GP’s tasting the sweetness of the top step of the podium lack of reliability, poor technical performance and, – the sort of experience that Jordan GP had missed ultimately, increasing financial troubles. However, since 1999. A few days later, the FIA reviewed its Eddie was convinced that Jordan GP would be decision and the victory was finally awarded to on the edge of competition again. He just needed Giancarlo Fisichella. During an improvised cere- to find the winning formula that will secure the mony, immediately before the start of the follow- team’s consistent performance and longed-for ing Grand Prix of San Marino, the trophy of the success. What role should he play to be the cham- Brazilian race passed to Fisichella. But, it was too pion of a new winning spirit within the team, the late to fully celebrate the exceptional result, to feel sponsors and partners, the fans and the entire proud listening to the national anthems from the Formula One world? central plinth of the podium, to spray champagne in victory on the praising crowd, and to indulge in the slow, formal ceremonial that awards the trophy Eddie Jordan: the mark of to the winning driver and team. leadership Eddie knew well that the Brazilian victory was not enough to improve the team’s situation with As the Jordan motorhome is traditionally the last respect to sponsors and fans. Nostalgically, he to be disassembled in the Formula One circus at remembered the successful results the team had in the end of Grands Prix, crews from other com- 1998 and 1999, and that glorious, memorable day petitor teams are often drawn to it. After the race, of just four years ago in Monza when Heinz-Harald engineers and marketing people from Williams, Frentzen passed the chequered flag first at the Toyota, even Ferrari, gather at Jordan paddock fac- wheel of the stunning Jordan Mugen-Honda 199. ilities to discuss the events of the day in a friendly, That event seems to belong to a remote past almost family-like setting. indeed. It was an era when difficulties in gaining Eddie Jordan’s distinctive style contributes to long-term funding from existing and prospective Jordan’s popularity. Eddie Jordan uses his winning sponsors, and closing valuable partnership agree- personality and sharp Irish wit to get the most out ments to secure vital engines, tyres, and techno- of those around him. Intuitive in the way he does logies, were unknown. Also, signing outstanding business, he motivates people within the team, drivers and professionals to reach the ultimate and knows how to court the Formula One public, target of winning the World Championship was the media and, above all, the sponsors. Whether still affordable. discussing crucial race strategy, playing a drum As the 2003 season entered its final act with solo with his rock-and-roll band ‘V10’, delivering only two Grands Prix to go, Jordan GP had eleven a presentation to a sponsor company, talking to points in its basket, 13 withdrawals in 24 starts team members, or presenting new Jordan branded and Ralph Firman still out of the races after a merchandise, Eddie brings enthusiasm to every- severe accident in Hungary. Meanwhile Giancarlo thing he does. Fisichella ranked eleventh in the Drivers’ Cham- Combining business savvy, personal charm and pionship. That was worth eighth place in the Con- sense of humour, Eddie Jordan is among the most structors’ Championship, far behind historical rival flamboyant personalities in Formula One racing. British American Racing (BAR), with only Minardi The added value that his passion and enjoyment and Sauber struggling in lower rankings. Eddie convey to the professional guidance of the team wondered why Jordan GP just didn’t seem to be won him the title of ‘Ernst & Young Irish Business- competitive at the level they used to be. (See man of the Year 2000’ and second place in the Appendix 1.) Moreover, after years of tribulations, ‘Ernst & Young World Entrepreneur of the Year other teams with big-name car industry patrons, Award’ in 2001. Eddie Jordan was also awarded the such as Jaguar and Toyota, have been improving honorary degree of Doctor at the University of their performance, thanks to the consistent finan- Ulster in recognition of his services to international cial support of their parent companies. sport in 2002, and an Honorary Doctorate from ECS_02W.qxd 1/11/2004 10:56 Page 3 Jordan GP: Formula One at heartbeat speed 3 the Dublin Institute of Technology in recognition in 1991. Then, Ron Dennis greeted Eddie with the of his outstanding achievement in International words ‘Welcome to the Piranha Club’ as he entered Sport and Contribution to Ireland in 2003. a top meeting of team owners for the first time at Born in Bray near Dublin in 1948, Eddie Jordan the exclusive Italian Alpine venue of Villa d’Este first gave serious thought to taking Holy Orders, in early September 1991. According to many, that then briefly studied dentistry, and attended a man- summit was the one that changed Formula One agement accountancy course at the Dublin College forever, as business issues gradually got the upper of Commerce, seemingly intent on a banking career. hand over sporting ones, and a profit orientation In 1970, a prolonged Irish national bank strike replaced the initial amateur spirit of pure chal- prompted Eddie to move to Jersey for the summer lenge. However, Eddie Jordan never stopped relying where he worked as a clerk during the day and in a on his intuition rather than business analysis, and bar in the evenings.