Sorry, we’ve gone from production hell to delivery logistics hell -Elon Musk
In 2018, Elon Musk was put to the test. He needed to crank out a record amount of Model 3 cars. To do this he pulled a last minute move to build another production line in a tent near his mega factory. Right now, however, he needs to ship out his cars to various locations. This includes China, but also the USA, Europe, and many other places. Getting to a point where Tesla is well oiled and is delivering a consistent profit every quarter is a little ways away.
To illustrate how Elon needs to get more operationally/logistically focused, it’s important to note what these kind of leaders have talents in. In essence, there are two major kinds of business leaders that exist, especially in the tech market. A more passionate and creative leader, and a more logical/level headed one.
The first kind is a creative visionary. These leaders can generate ideas for their business model quicker than the company can make them happen.
Many CEOs fit the bill: Elon Musk, Steve Jobs, Mark Zuckerberg, people who come up with great ideas, and great personalities. They usually work on the next big thing and come up with unique ideas. Jobs last product contribution was the Apple Watch, which came out years after his death. Because of Steve Job’s “personality,” he would flip out on employees to make sure Apple’s products were perfect. He was very temperamental, on edge, and could fire employees in a pissy fit. Elon Musk is very reminiscent of that mentality. Mark Zuckerberg hasn’t been known to flip out, and I’ve actually written about him as a CEO here, but he’s gotten himself in his own trouble with the Cambridge Analytica Scandal, and pretty much the entirety of 2018, which was a very bad press year for Facebook. You could also argue that while Zuckerberg lacks “freak outs”, that comes with the trade-off of not having the same kind of animated personality that Musk and Jobs have/had.
Then there are the CEOs that can make a company run like an efficient, well oiled machine. They are very talented in operations, logistics, pricing products, keeping investors and shareholders up to date, and all of the business fundamentals that make your Intro to Finance professor happy. Satya Nadella, Tim Cook, are the more reserved leaders who don’t make a big deal of everything. Satya Nadella is, in my opinion, the best CEO in technology right now (sorry Bezos). You can clearly see Microsoft's prominence rise with their stock price after Nadella took over. Balmer didn’t run Microsoft as well as Nadella is right now. Steve Balmer was more of a marketer and not the best fit for Microsoft CEO. Satya is not flashy, but he knows services and the enterprise sphere very well. And yet, there’s hardly any news coverage about him. Tim Cook is very much into services and the enterprise realm as well. These kind of moves are a good business play, but don’t generate much excitement among regular non enterprise consumers. Both of these leaders are known for letting other people take the spotlight, and have very small egos.
But one thing Both Elon Musk and Tim Cook share, is that they have both been raked over the coals for their own respective weaknesses, especially recently.
Elon Musk has shown us many antics throughout 2018; not keeping up with production, logistics nightmares, keeping investors “updated”, pissing off the SEC, Going on Twitter tirades, seemingly harsh and unpredictable layoffs, executives abruptly leaving, smoking weed on Joe Rogan’s podcast, and more. He did a lot of things Tim Cook would never do. And quite frankly, the logistical and operational nightmares is in Cook’s wheelhouse to solve. These slip ups that Musk is known for creating, develops a perception of chaos and instability within the company. Tesla’s stock price becomes volatile whenever he makes slip ups like those.
Tim Cook, on the other hand, has been hit hard for his lack of creativity. The iPhone isn’t revolutionary anymore, and right now Tim Cook is squeezing the iPhone for every dollar it’s worth, and dumping money into Research and Development (RnD). Apple had Steve Jobs, the creative visionary to come up with ideas, but now they are just a well oiled company, and that’s it, so they are spending a lot on research and development since they don’t have that head visionary. They aren’t going out of business anytime soon, but they aren’t exactly inspiring (although I’ve countered that narrative here). Apple needs to be innovative again.
Overall though, despite that, we take Musk’s and Cook’s talents for granted.
The world has become a little desensitized to Elon Musk’s creative ideas. Whether it’s having reusable rockets land on a drone boat in the middle of the sea, a tunnel through the bottom of LA to bypass traffic, self driving autonomous cars, pure electric vehicles that not only look awesome, but go very far on a charge, Elon Musk is an idea machine. He runs The Boring Company, SpaceX, Tesla, Neuralink, and more. To say he has grand ideas would be an understatement. If he were gone tomorrow, the world would definitely be a far worse place.
Cook gets shafted because he’s not a media attention hoarder. His company produces products, on time, and he’s tried to shift into services. In an initially controversial decision, Cook decided not to report iPhone unit sales anymore to investors, instead relying on total revenue. This was done because Cook is trying to expand into a more diversified business direction. This move was underrated, and not really praised as much as it should’ve been. It puts Apple in a much more dynamic position, as they sell accessories like AirPods, and break into other product markets and expand their services. Earlier on when he was working with innovative products, he was pricing the phones really well and delivering record iPhone profits. Right now, one good idea he’s been rumored to have gone through with, is relaunching the iPhone SE, which isn’t innovative, but definitely a good idea considering it gets their product into lower income consumer’s hands again with a 399 dollar price tag. Tim Cook can work with good ideas if they are given to him, but he’s not Mister Visionary, he’s Mister Operations.
Someone like Tim Cook would be tremendously helpful for someone like Elon right now, considering Musk’s logistical and production nightmares. Cook is a king at making a company “well oiled,” meaning that the operations aspect of a company would work fantastically if run by Cook. This has to do with his Chief Operating Officer (COO) background before taking the reins for the position of CEO at Apple.
And someone like Elon would be tremendously helpful for someone like Tim Cook. Where Apple needs innovation, Elon has shown a record of generating giant actionable ideas that fit well with what the company is going for. He would be able to come up with a vision for Apple if inspired to do so. He would have to be “in the mood” in order to make that happen. We couldn’t force Elon to do it, he’d have to really believe in saving the world through phones, somehow. All of his business adventures except for maybe PaPal tackle a social/economic/environmental problem. I don’t know if he’s interested in making money with Apple for the sake of making a lot of money. In his mind, it has to be about some grander than just pure capital.
There are of course people that seem to fit all molds. Where does Jeff Bezos fall into the equation? He had a business/finance background and then started a book company in the 90’s. He seems pretty creative and also has business fundamentals. But with his recent love affair scandal, it might be reasonable to assume that he fits more into the temperamental, creative camp with his personality, but got his educational/foundational experience in Wall Street. That could be why he left Wall Street to start Amazon, because he had a creative idea and didn’t want to just work in finance. He’s also famous for sending his “?” emails to employees. He also doesn’t allow Powerpoint/Slide presentations at meetings because they are boring. He also believes in the 2 pie pizza rule at meetings, meaning that there shouldn’t be anymore people than what 2 pies can feed. He has quite a set of creative ideals and processes, and has quite the passionate personality. He does run Amazon really well also, but that could be because he has support, and also has a business background.
So it’s fair to say you could look at a CEO or business leader and see where they lay on the Creative — Business-Operations spectrum.
The best case for a business is where you have someone like Tim Cook and Steve Jobs in the same company like Apple. That’s why Apple was so successful (well plus Johnny Ives/Woz), and right now they have such a vast amount of cash in the bank, which they are going to spend on RnD. It’s because they had a creative innovator and a operations guru that they were super successful.
Where do you think you’d fit in if you were a CEO? Do you think you are more creative or logical? Elon musk is very logical, but his animated personality is so dominating, and his ideas flow so well, that it’s easy to see that he might be more creative than logical, but still very very logical. Are you more vibrant, passionate, and creative with your personality or are you more cool, calm, collected and logical?