Enrique Dans
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Enrique Dans

Don’t blame Twitter for what happened to Elon Musk

If Elon Musk has a problem, it’s his, not Twitter’s. Whatever happens to Musk — who used the social network in August to say he had “funding secured” for a buyout of Tesla at $420 per share and last week agreed to step down as chairman of the board for three years as part of an agreement with the US Securities Exchange Commission (SEC) — CEOs and other senior managers must continue to see Twitter and the social networks in general as a unique opportunity to generate value for their shareholders, their companies and themselves. But like all powerful tools it must be used judiciously. Elon Musk has extracted huge value from Twitter throughout his career, sailing very close to the wind until, perhaps under too much pressure, he has been scuppered.

Musk’s iconoclastic and personal use of Twitter has garnered him a following more in keeping with a rock star that a CEO: he has 22.8 million followers, a whole order of magnitude more than Tesla’s 3 million, Space X’s 7.4 million or The Boring Company’s 175,000. Musk is a media phenomenon, somebody able to excite many people with his business projects and who would be a vital asset for any company. Just about any company would kill to have someone with the communicative capacity of Elon Musk and would be willing to accept the risks involved. Tesla’s share price has recovered from the 13% drop on Friday, following the announcement of the SEC lawsuit, and is now being touted as a future member of the trillion dollar club.

Does Tesla have a problem? The company has put a damage control plan into action regarding its use of Twitter, but at the same time, it cannot be denied that Tesla has gotten where it is thanks in large part to Musk’s tweets. Musk is nothing if not outspoken, whether responding to his critics or his enemies, such as short sellers. But that doesn’t make Twitter in itself dangerous. Used prudently, a Twitter account offers limitless potential for corporate communication.

In general, I tend to consider a senior director’s account as his or her asset rather than the company’s, although it may obviously generate benefits for both. In Spain, where I live and work, pioneers like Marcos de Quinto during his time as president at Coca Cola or Eduardo Fernández when he was country manager at BlackBerry, succeeded in capitalizing on Twitter’s communicative advantages, and that we were talking about the beginnings of Twitter, circa 2008. Similarly, Jose María Álvarez-Pallete, CEO of Telefonica, has a genuinely personal style, mixing personal themes with professional interests and turning his account into something that allows him to discuss his company’s agenda, express topics of interest and is someone worth following if you want to know what’s going on in telecoms.

Some analysts accuse managers who do not use Twitter of failing to generate value for their shareholders, the business world’s cardinal sin. That said, in Spain, where traditional managerial cultures still prevail, despite more recent examples such as Antonio Huertas at insurer Mapfre or Ana Botín at Santander, much remains to be done to overcome the culture of the “discreet” manager who speaks only through the communication department.

For the SEC, what is said on an official social media account falls under its remit and therefore, senior managers should be careful about what can be seen as forward-looking statements. However, this doesn’t necessarily require permanent supervision by the communication department, which can result in overly cautious language, and should not lead to senior managers feeling afraid to express their views on Twitter. The benefits of a sentient manager using Twitter far outweigh any problems he or she might cause, and which are rarely to do with Twitter itself, but to a lack of common sense, a sense that all too often is the least common of all.

(En español, aquí)

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Enrique Dans

Enrique Dans

Professor of Innovation at IE Business School and blogger at enriquedans.com