This is a topic and case primed for an analysis into the levers of leadership, highlighting one of the goals of Turn and Temper.

The latest news developments about Tesla and its weekly production numbers point to more troubling issues from a management perspective.  There have been a litany of pressures surrounding leadership (with some wounds being self-inflicted) as well as questionable patterns of responses.

Pressures

What are the pressures on Musk and Tesla? Well, to name a few recent ones:

• Intense media scrutiny
• Financial shortcomings
• Organizational flux—numerous top staff leaving for a variety of reasons (see https://www.dropbox.com/s/doe1755m6gyztnc/Tesla%20Executive%20Departures%20List.pdf?dl=0  and https://www.reuters.com/article/us-tesla-executives-factbox/factbox-tesla-executive-departures-since-2016-idUSKCN1IG2G2)
• Time—numerous companies to run while juggling roles, personal/family life, celebrity status, short-term performance needs driven by market reporting
• Personal—the need to always be right, willingness to constantly gamble on some vision that is regularly changing, and the pressure to constantly be stimulated with a new idea
• Reputation/ego—need to continue being seen as a real life Iron Man character, proving everyone wrong

Patterns

There are several concerning patterns:

• The willingness to double/triple down and bet it all on a hand (see Space X history). That approach doesn’t play well over time and given enough runs.
• Conceptual sleight of hand—we have seen a tendency for Musk to proclaim a target or goal, then over time revise it to fit the current situation.  Next, he declares victory when that new, self-imposed (and lower) goal was reached. If one reviews the previous targets and goals, one notices this trend (remember in 2009 when Tesla was going to be profitable “next month”?).
  • The latest goal of producing 5000 Model 3s a week is an example.  The number 5000 was simply an arbitrary number considered easily achievable earlier this year (and was itself a drastically reduced revision).
  • We also saw this in Solar City—the company by itself was struggling.  Instead of admitting defeat and moving on (see #6 below), he rolled Solar City into Tesla so that Solar City wouldn’t fail (but should have).
• Ego involvement—Musk has spent quite a bit of time telling anyone and everyone how hard he is working on reaching that 5000 Model 3s being produced a week goal.  Why does he need everyone to know how hard he is working?  Is it to build in an excuse that will point to luck or “out-of-control” factors if targets aren’t met?
  • It’s also a self-defeating strategy—we now know that Musk and Tesla staff worked around the clock just to hit a very low bar.  Instead of reassuring investors, it makes them less confident in this being sustainable.  If I tell you that I struggled to finish a 10K race, would you bet on me then finishing the Boston marathon in the near future?
• Combative nature—Musk has been arguing with short sellers, saboteurs, analysts, monsters under beds, other auto manufacturers, even Warren Buffet (over candy no less).  If someone is consumed with their goals, then why all the distractions, unless distraction is the goal?

(hat tip to http://adventuresincapitalism.com/)

• Independence streak with a bit of superiority/perfectionism—great leaders are able to lead, helping others to a better future. When things don’t go a certain way, Musk tries to do it himself.  There is a tendency to remove engineers, managers, etc. and then claim he is doing it better.  Even if an individual has exceptional capabilities, he can’t or shouldn’t do everything himself.  The bigger a company becomes, the more people with complementary skills are needed.  The skilled leader realizes his or her limitations and figures out how to find staff who are better in certain areas.
• Refusal to be wrong—willingness to gamble and move goalposts. It’s a characteristic that is commendable and necessary for an entrepreneur.  But, when the strategy shifts from finding ways to succeed to finding ways to rewrite history or cover up failures, refusing to admit error is a huge liability.
• Distractions or fleeting interests–Musk is either a master at distraction or can not focus.  He is constantly churning out big ideas from solving brain science, to the most advanced assembly line (before the dust filled tent), to sending humans across the galaxy, to flashy tube travel, to throwing his “expertise” into rescuing the trapped Thai soccer team, to…come build your own Tesla when all else fails and another distraction is needed.
  • Great site that is a nice record of the ongoing smokescreen that seems to indicate bigger patterned problems: https://www.bloomberg.com/features/elon-musk-goals/
  • Having big ideas is a necessary part of advancement and invention, but there needs to be some ability to match those ideas to reasonable reality.

This is a volatile mix of pressures and tendencies that often don’t end well.  Things may come to a head.

Disclosure–I do not have any positions on Tesla and have no plans to initiate any in the near future.

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