By Ralf Quellmalz

“Stand out by focusing on what makes you unique instead of chasing others.”

Elon Musk

Elon Musk is, without a doubt, a visionary entrepreneur. Through the companies he founded – which include PayPal, Tesla, SpaceX, Neuralink, The Boring Company, Zip2, OpenAI, X.com, and the Musk Foundation – he disrupted diverse industries by consistently challenging the status-quo with innovation and ground- breaking ideas. The impact he had, and is currently having, in the business world is infinite.

The South African-born is known for his incessant work ethic, 120-hour per week work schedule, and his strong willingness to redefine transportation both on Earth and in space. What passionate him the most, however, is helping create a remarkable future in which human capacity, creativity, and potential has no limits. In his own words: “You want to wake up in the morning and think the future is going to be great. It’s about believing in the future and thinking that the future will be better than the past. And I can’t think of anything more exciting than going out there and being among the stars.”

Musk’s innate ability and capacity to execute his inspiring vision of the world has earned him towering popularity and fame – making him one of the most talked-about businessmen of this century. By consistently defying the odds, Musk has been able to spread his personal love for his companies across global boundaries. The fact that, through the many companies he founded, Musk was not guided by a desire for money or personal fame, but by his heart’s desire to bring forward a better future for the world has earned him the admiration of countless individuals across the globe.  

Through Tesla, SpaceX, and his other organizations, Musk has consistently proven people wrong. By standing up for what he believes in, Musk’s contagious love for his mission has earned him an army of followers deeply committed to his personal quest – embodied within his companies.

Yet, Musk has not achieved his powerful public image and popularity without setbacks and controversies along the way.

Elon Musk presenting a red-colored Tesla's Model S in a corporate event
Elon Musk presenting Tesla’s Model S

Is Elon Musk the Right Leader for Tesla?

Elon Musk’s management and business practices have consistently been questioned. Even though there are no doubts that Musk’s work ethic, perseverance, and determination are unquestionable, he has frequently displayed erratic behaviors improper of a business leader and public figure of his tenure.

Irresponsible tweets

For instance, he is known for his irresponsible and impulsive tweets. In 2018, Tesla and Musk were each fined $20 million by the SEC for an irresponsible tweet made by Musk about his intent of taking Tesla back into a private company – misleading investors. Again, a $40 million fine for a tweet. (Think about that for a second!) The fact that Tesla has struggled to reach profitability makes the fine’s impact on Musk’s leadership even worse.

How did Musk respond to the SEC’s fine? By stating through Twitter that such fine was “worth it.”

Smoking Marihuana in Live TV

At the same time, Musk has smoked marihuana on the live TV show “The Joe Rogan Experience,” a behavior inappropriate of a CEO that also goes against Tesla’s own policy, which states that the illegal use of drugs won’t be tolerated. Such behavior disappointed investors, shareholders, customers, and his firms’ employees. (Think about how you would feel as a Tesla employee seeing your CEO smoking drugs on live TV…)  

His Nano-Management Style

Moreover, Musk has self-described his managing style as that of a “nano-manager.”

This has led to an unhealthy work environment at Tesla. Employee frustration levels at the company keeps rising as Musk seems both unable and unwilling to delegate important tasks. As The Washington Post informs, “Musk is head engineer, designer, salesman, financier and marketer, with full power over everything from global sales strategy to the look of the retractable door handles.”

Nano-managers like Musk will harm Tesla’s current and future performance, as it’s common intuition that there isn’t a single person that can efficiently and effectively manage every single detail of an organization the size of Tesla.  

Constant and Misleading Statements

When dealing with business analysts and critics, on the other hand, Musk has consistently shown annoyance to analyst’s questions asking about the financial health of his companies. It’s worth noting the fact that Tesla has never had a profitable year. Musk, at Tesla, has frequently promised financial performance and production rates that he is unable to deliver. He also assures that Tesla has sufficient capital to solvent its own expenses, disregarding the increasing amount of debt ($8 billion and rising) building upon the company – misleading stakeholders over Tesla’s stability. 

Tesla’s High Employee Turnover Rate

Furthermore, Tesla is known for having one of the highest employee turnover rates in the auto industry. Key executives have been leaving the firm at an increasing pace, harming the firm’s capacity to execute its strategies (The Washington Post). Yet, that doesn’t seem to concern Musk.

Musk has also been known for being found sleeping in the office, lashing out at employees, firing them at the spot, and for the incessant work culture prevalent in his firms.

Musk seems unconcern with what critics, analysts, and other stakeholders have to say about his leadership. Rather than proactively and maturely addressing their concerns through effectively improving Tesla’s business practices, he finds shelter in Twitter. So instead of focusing on the issues harnessing Tesla, which critics rightfully point out to, he responds by trying to drive attention away from them.   

Elon Musk presenting a white Tesla Model X in a corporate event
Elon Musk and Tesla’s Model X

An Inspiring Visionary, but Not the Leader Tesla Needs

Elon Musk is, and will always be, perhaps one of the greatest visionaries of the century – without a doubt. However, even though he is a great visionary – one that inspires, motivates, and drives change – Musk seems unfit to run Tesla. He possesses the brilliant capacity to inspire through his compelling vision of the world, but he does not seem to have the capacity to execute them efficiently.

Leaders have the paramount responsibility to establish the values an organization will be guided by. It’s their responsibility to create an environment in which its people can work at their natural best and feel safe at work. The fact that Tesla currently has a high executive turnover suggest that the auto company is failing to establish a safe work environment.

Moreover, leaders ought to look beyond their lifetime in their organization and focus on building up the next generation of leaders. Something that Musk has terribly failed at. As Fortune informs, “Tesla is dependent on its CEO to an extent that the auto industry hasn’t seen in decades.” Elon Musk is failing at a leader’s primary job: to form and develop future leaders.    

Through his Nano-managing leadership style, Musk is fostering a culture of obedience rather than responsibility. Instead of empowering Tesla’s more-than-capable employees to do what’s right and pursue their creative endeavors, Musk’s erratic behavior gives the sense that he expects employees to do as he says.

The role of a leader is not to order people around – it’s to provide both intent and direction to its people by inspiring them to find creative ways to navigate adversity and tackle innovation.   Musk should understand, as all great leaders do, what being a CEO demands of him. Leaders should place higher emphasis on the people they are leading than on the results their organizations achieve.

Even though Musk has proven to be an extraordinary visionary, his inability to control his own behavior suggests he is unfit to lead Tesla. If Musk, on the other hand, empowered his employees with autonomy and room to exploit their creativity, Tesla’s results and achievements will had taken care of themselves.    

Given his constantly erratic behaviors, Elon Musk should step down as Tesla’s CEO.

Yet, Tesla would immensely benefit from Musk’s guidance, capacity, and charisma in other influential ways.     

Musk should either become a member of Tesla’s board of directors or its Chief Visionary Officer, but not its chief executive. Even though such change will be hard for Musk to digest, it will help preserve and boost both Tesla’s financial and strategic well-being as well as its future potential while keeping Musk’s innate capabilities onboard with the mission.

Tesla has all the ingredients conquer the auto industry: beautifully designed vehicles, a compelling vision, an inspiring purpose, ground-breaking technology, competitive pricing strategies, a remarkable product development capacity, superior electric-technology advantage, and a growing worldwide presence.

With effective business leadership and an organized and performing management, Tesla will be able to live to its full potential and reach unimaginable levels of success – redefining the auto industry as we know it.

Tesla's logo

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