Tesla’s Innovation Culture: How Elon Musk Drives Excellence
Elon Musk did not found Tesla. But under his leadership, the electric car manufacturer has helped him become the world’s richest man with a fortune estimated at US$241bn.
That’s based largely on the value of Tesla, of which he owns more than 13%.
Musk took an enormous personal risk with Tesla.
The company was floundering when he became CEO in 2008 with unproven e-vehicle technology catering to a customer market that did not yet exist.
Yet Musk doubled down when investors baulked, personally bankrolling the startup car company. He faced ruin. “Eating glass and staring into the abyss,” was how he described his state of mind at that time.
How has Musk gone about turning around a company that almost went to the wall, and what can other CEOs learn from his management style?
8 lessons for CEOs from Elon Musk
#1 - Embrace discomfort
In his authorised biography of Elon Musk, biographer Walter Isaacson reports of Musk’s “bitter laugh” at the term “psychological safety” bandied around at then Twitter. “He considered it to be the enemy of urgency, progress, orbital velocity. His preferred buzzword was ‘hardcore’,” wrote Isaacson. “Discomfort, he believed, was a good thing. It was a weapon against the scourge of complacency. Vacations, work-life balance and days of ‘mental rest’ were not his thing.”
#2 - Have a vision
It is a truism that a CEO has to have a vision, and with Musk, he has a vision in spades. That vision is not about making money, it is about colonising Mars and moving to an era of sustainable energy. And by conveying that vision, it makes up for the times when he is abrasive with employees.
#3 - Understand the value of hard work
Colette Bridgman, former head of global marketing at Tesla, has called Musk the hardest working man in the world.
In his first company, internet startup Zip2, he would work seven days a week, often pulling all-nighters.
Following his controversial takeover of Twitter, he reportedly told its employees to expect to work 80-hour weeks. In an email to employees, Musk said “remote work is no longer allowed” and that the road ahead would be “arduous and will require intense work to succeed”.
#4 - Be open to criticism
Musk is a strong advocate of constructive criticism, describing a well-thought-out critique from others as “valuable as gold”. He is not afraid for people to disagree with him. This is because criticism can offer valuable insights into what is going well with a project and, even more importantly, what’s going badly, so that adjustments and improvements can be made.
Musk told one interviewer: “Constantly seek out criticism. A well-thought-out critique of what you are doing is as valuable as gold and you should seek that from everyone you can, particularly your friends … basically, you should take the approach you’re wrong, that you the entrepreneur are wrong. Your goal is to be less wrong.”
#5 - Keep learning
The man who has been described as “knowing everything about everything” is effectively a self-taught rocket scientist, who devours information. As a child, he opted to live with his estranged father so he could plough his way through two sets of encyclopaedias.
#6 - Lead from the front
Musk has described a company as “a bunch of vectors … each person is a vector and they need to point in the direction you want to go,” he told Thomas Mueller, his very first employee at SpaceX.
“He was all about making all the vectors work with the employees pointing in the right direction, moving forward,” Mueller told the BBC.
Musk has described a company as a group of people who are gathered together to create a product or service. The question you have to ask yourself is, are all those efforts creating a better product or service? If not, said Musk, stop those efforts.
#7 - Be prepared to risk it all
Musk has said that the most likely outcome for anybody starting a company is that it will not work, and they should only do it if they are compelled to do it.
Many people do not realise that in 2008 Musk was on the verge of personal bankruptcy himself, having nearly used up all his own money to keep bankrolling the nascent Tesla and SpaceX after other investors fled.
He compared his self funding of Tesla to a child who constantly needs to be fed. “Creating a company is almost like having a child, so how do you say your child shouldn’t have food?” he told one interviewer.
#8 - Don’t be afraid to fire people
Musk’s willingness to let go of staff has won him the admiration of President-elect Trump, at least, who called him during their two-hour conversation on X, “the greatest cutter”.
Sally Percy, author of 21st Century Icons: the leaders who are changing our world, has sympathy for the Draconian layoffs Musk made at Twitter shortly after his takeover, pointing out that “as a business the platform was struggling and quite urgent action was needed to address it”.
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