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What Elon Musk Gets Wrong About Leadership

The CEO is creating the technology of tomorrow. Can his businesses keep up?

Barry W. Enderwick
Aug 24, 2018 · 4 min read
Photo: Axelle/Bauer-Griffin/FilmMagic/Getty Images

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The rise of Elon Musk has been spectacular to watch. Since his co-founding of companies like x.com and PayPal, Musk has used his money and intellect to take on big subjects like solar, electric cars, house batteries, transportation in general, and, of course, space. What he has accomplished thus far is amazing.

As the singular leader and voice of SpaceX, Tesla, and The Boring Company (still love that name, btw), he has built some pretty impressive businesses. But the incredible Mr. Musk is running into an age-old problem that has plagued many leaders. He’s trying to do everything himself. Unfortunately, his decision to do so displays a fundamental misunderstanding of what leadership means.

No one person can do everything at a company — let alone three — and the telltale signs of burnout are starting to show. If he continues down this path, not only will his health continue to suffer but so will his companies.

The current state

The importance of company culture cannot be overstated. Patty McCord, co-creator of the now infamous Netflix culture deck, once said something to the effect of “the company culture lets the employees know what is expected from the company, and the company what is expected from employees.” A well-understood company culture leads to a more functional organization and, ultimately, more efficiency and growth.

What it doesn’t typically lead to is leaked emails like this one from Mr. Musk to Tesla employees, in which he describes contractors as “barnacles on barnacles.” Or this email, wherein he provides efficiency tips for meetings. The fact that he felt he needed to send these emails, coupled with the fact that they were leaked, indicate that there is little-to-no understanding between the company and the employees regarding what they should expect from one another. If Tesla had an established, well-understood culture, they’d be living it every day, thus preventing the need to even send those emails.

A company does not get high-performing, smart people to stick around as long as they did without doing the hard and ongoing work of establishing and developing a company culture.

The result of that seemingly missing company culture has resulted in a revolving door of executives since 2016. And churn, whether it be customers or employees, indicates a disconnect. For example, when marketing makes a promise that product can’t deliver on, customers might feel misled and leave. In the case of an employee, they might buy into the optics a company projects, but eventually come to realize it’s a different situation once on the inside.

I am not privy to the day-to-day workings of Tesla but to me, the revolving door indicates an atmosphere in which these executives were not trusted to do their best work on behalf of the company. Musk needs to establish and codify a company culture. Even if it is bare bones, it can lay the foundation of trust for better hiring and retention.

Learn to trust others

When I first arrived at Netflix I noticed that CEO, Reed Hastings, was a very intelligent, intuitive individual. But I also observed that he was smart enough to know that he was not an expert in every area. So he hired Ted Sarandos, Barry McCarthy, Leslie Kilgore, Neil Hunt, Patty McCord, and Tom Dillon. Each one had a deep understanding of content, finance, marketing, technology, HR, and logistics, respectively.

He, along with Patty McCord, established the Netflix high performance culture wherein employees would be trusted to execute their best on behalf of the company. Because of that trust, each leader stuck around for an improbable yet impressively long time:

  • Ted Sarandos, CCO (content) — 18 years, 6 months (still at Netflix)
  • Barry McCarthy, CFO — 11 years, 9 months
  • Neil Hunt, CTO — 18 years
  • Leslie Kilgore, CMO — 12 years
  • Patty McCord, CTO (talent) — 14 years, 3 months
  • Tom Dillon, COO — 7 years (transitioned out just before streaming)

A company does not get high-performing, smart people to stick around as long as they did without doing the hard and ongoing work of establishing and developing a company culture.

So what should Mr. Musk do next?

Clearly I am Monday Morning Quarterbacking this but ultimately, a company leader is successful if they not only grow a company but do so in a way that allows the company to grow and be successful after he or she is gone. That is true leadership.

While it doesn’t appear that Mr. Musk is quite on board yet, it is not too late to right the ship. So how should he do it?

1. Set up the culture

Codify a company culture that propels individuals to their fullest potential. In doing so an atmosphere of trust or freedom with responsibility will be established.

2. Distribute the load

Once that company culture is established, the responsibility for different functions within the company should be offloaded to executives hired for their expertise.

3. Start taking care of himself

One of the tropes of Silicon Valley is that of the CEO who works non-stop to accomplish their goals. This is not, in any way, advisable. As Arianna Huffington points out, part of leadership is setting an example and that carries over into health and mental wellness. Mr. Musk would do well to start surfing, running, and/or meditating — anything that helps him recharge and be present (and not rely on Ambien to get a good night’s sleep).

What Elon Musk has accomplished thus far is amazing. But it is coming at an increasingly high price. And I, for one, would like Mr. Musk to remain brilliant, not burn out.

Update: Sure enough, now comes more reports of Mr. Musk’s leadership style issues. You might be tempted to argue, “yeah, but he gets results.” And while that is true they are short-term gains. If wants Tesla to be a truly independent powerhouse, he’s going to have to have come to grips with the fact that grinding people into dust makes people not want to work for or with you. There are only so many people willing to blindly say, “I can fix it!”

Special thanks to Vincenzo Landino of Aftermarq for the editorial advice on this one.

Barry W. Enderwick

Written by

Brand/marketing executive, former Netflix, MZ. I write on startups, strategy, business, culture & design. Also on Instagram @craftbarry @inthechipswithbarry

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