Elon
This seems to be a common misconception about the culture at SpaceX — one even I had before I worked there. The thing is no one, especially not Elon, is forcing you to work long hours. SpaceX just hires self-driven people who are extremely passionate about the mission. Long hours is just usually what it takes to get the job done, especially if you're working with limited resources.
Even while SpaceX hires those who don't really need extra encouragement, there were lots of great perks to entice you to stay at the office longer and enjoy coming to work more like free dinners, coffee, froyo, an in-office masseuse, and monthly little celebrations with free goodies. Plus the environment of working in a rocket factory is amazing on its own. We could watch camera feeds of the factory floor from our desks and were encouraged to explore.
That team culture and environment really helps as a motivator as well, kind of like working out in a group instead of at home by yourself. You don't want to let anyone down and those who work hard are respected. The very open office space contributes to this I think, since you see everyone else working hard and know they see you too. We would sometimes joke and say, “What're you, working part time?”, when someone was leaving 'early' at like 7 or had only put in a 50–60 hour week. It was never entirely dead or too lonely around the office either, since a bunch of people worked late and the factory floor never really shut down.
I frequently did work 12+ hour days and pulled many all-nighters at the office, but again this wasn't because I was forced to, but because I loved my work and saw the value I was bringing to the team. I technically reported to the CIO, but was essentially self-managed like many others there at the time. A phrase we threw around a lot was,“You are your own slave driver.”
Burnout is real though, and passion can only take you so far. There was pretty high turnover for people that didn't work well in that environment, and some people had to take short sabbaticals and come back later. We had some team meetings about work-life balance though, and while I had to be on call and available most of the time to test and deploy hotfixes, SpaceX was always very flexible with me and let me work remotely when possible and manage my own schedule. I was given more responsibility and freedom there than any other company I had worked for, which ultimately became invaluable experience for running my startup company Cyph after leaving.
time flew by because it was challenging, interesting, and rewarding work. They were also only focused on results, giving me the freedom and creativity to work how I wanted. Now I'm sure if someone wasn't getting their job done or actually putting in part time hours it'd be an issue, but from my experience that would never be the bottleneck for me or any of the people I worked with.
In an email Musk wrote to all of us: “The only way for a little company to prevail against those much larger companies is to work faster, smarter and harder. The passing grade at Tesla is excellence, because it has to be.”
what actually matters is your mindset, drive, collaboration skills and passion for learning. Some of the world’s best innovators have accomplished great things without graduating. Musk has pointed out that Bill Gates, Steve Jobs, and Google co-founder Larry Page all lack college degrees. “If you had a chance to hire them,” he has said, “of course, that’d be a good idea.”
Musk looks for “evidence of exceptional ability. And if there is a track record of exceptional achievement, then it is likely that that will continue into the future”.
Don’t settle for anything less than the best candidate.
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To us, Recruiters, Musk insisted on approving on every hiring decision on engineer-level and above himself. Every candidate we hired was measured against specific selection criteria, which defined the Tesla Cultural Fit. We needed Musk’s personal ‘ok’ for each new hire, that he sent us per email. He wanted to see a to the point write-up for each selected candidate consisting of a short cv-summary and proof of -ideally 3- excellent achievements, he wanted to know who was in the carefully choosen interview panel and see a short recommendation from the most senior interviewer. Recruiting was really a joint effort and responsibility.
What Elon Musk wanted to see in Top Talent:
“Hungry”, intrinsic strong drive
A strong drive to be part of the Tesla mission, to accelerate the transition to a more sustainable world. A personal commitment to excel in the pursuit of unselfish goals. High potentials have great ambition and want to leave their mark, but they also aspire to big, collective goals and invest in getting better at everything they do.
“Understand the truth of things, make the complex simple and come up with great solutions”
Of course problem solving skills that are relevant to the skills they need on the job. One of the questions we asked to explore: “Tell me about some of the most difficult problems you worked on and how you solved them”, so we could determine whether they were actually the one who found the solution, as opposed to merely being a member of the team that did so.
“If someone was really the person who solved it,” Musk said, “they’ll be able to answer on multiple levels. They’ll be able to get down to the brass tacks. And, if they weren’t, they’ll get stuck. And then you can say, ‘Oh, this person was not really the person who solved it.’ Because anyone who struggled hard with a problem never forgets it.”
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‘No ego’– work for a common goal
Musk’s philosophy is a call for true collaboration throughout all of Tesla — for the betterment of Tesla. He often reminded us: “We are all in the same boat. Always view yourself as working for the good of the company and never your dept.”
“Persistence is very important. you should not give up unless you are forced to.”
Determination: the wherewithal to fight for difficult goals despite challenges and to bounce back from adversity. Musk is realizing some of the most aspirational goals in human history, and building his legacy right before our very eyes. Nothing can knock him out of the ring, derail his ambitions or make him throw in the towel. This is such an inspiration for anyone working at Tesla.
In order to be effective when working in a complex and dynamic environment like Tesla, you need to be curious, adaptive and have a good learning ability. Seeking out new experiences, knowledge, candid feedback and an openness to learning and change. A property that strong performers have: “Why is it that way? And how does it work? And why does it need to work that way? And why can’t it work some other way?”
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Think on your feet
Staying Cool and Confident Under Pressure. Able to translate your thoughts and ideas into coherent speech quickly. Be prepared, confident and listen before you react.
No-jerks and open communication
Being a good team player is a common job requirement, but for Musk there is more to a collaborative work environment. He has no interest in hiring you if he senses you might be rude to colleagues. Musk says: “Generally, I look for a positive attitude…It’s very important to like the people you work with, otherwise, your job is going to be quite miserable.”
In an email he sent to everyone in the company: “Anyone at Tesla can and should email/talk to anyone else according to what they think is the fastest way to solve a problem for the benefit of the whole company. You can talk to your manager’s manager without his permission, you can talk directly to a VP in another dept, you can talk to me, you can talk to anyone without anyone else’s permission. Moreover, you should consider yourself obligated to do so until the right thing happens. The point here is not random chitchat, but rather ensuring that we execute ultra-fast and well.
Managers should work hard to ensure that they are not creating silos within the company that create an us vs. them mentality or impede communication in any way. This is unfortunately a natural tendency and needs to be actively fought. How can it possibly help Tesla for depts to erect barriers between themselves or see their success as relative within the company instead of collective?“
And last but certainly not least - FUN
“It is incredibly important that people look forward to coming to work in the morning. One of the best feelings in the world is to be part of a team that is fired up to achieve what most industry experts say is impossible! For many companies out there, work is like jail – employees look forward to Friday and dread Monday. That’s horrible. We never want to be like that.”
And fun we had! Looking back at my Tesla journey I am so gratefull of the experience and having been part of the Tesla mission. How much I learned from such an inspiring leader and dynamic working environment and how much fun I had working with like-minded colleagues.
Which made me realize that above mentioned top talents only truly flourish in an environment with a clear mission, a culture of open communication, where making failures is seen as something to learn from, and where responsibility is given to everyone in the organization.
I thought I would get fired every day during the first six months. There was no one there to tell you what to do. In the military, there was a change of command. At SpaceX, you ask yourself, "How do we do this thing? How do we do it safely? How do we do it so that it's a good value for our customers?" Then you figure it out.
There were no boundaries in my role as long as I was adding value to whatever I was working on. For example, someone would ask if I was interested in flight software, and if I were, I'd be invited to attend those meetings.
The directive was if I was in a meeting and it was adding value to what I did daily, stay, or if I was adding value based on my expertise, stay — but if neither of those things were happening, you should get up and respectfully walk out.
In one instance, a government customer came in with a 50-slide deck. Six slides into the presentation, 75% of the room had walked out. I had to tell him that if he didn't get to the point, I'd be the only person left in the room — and only because I had to walk him out. He skipped ahead to his last five slides. That kind of environment makes you much more efficient.
Also, everyone is accessible. You're all in cubicles, including Elon and the COO, Gwynne Shotwell. You can look up, be seen, and say to people, "Hey, I need this." It's very open and makes collaborating and getting to know people easy. The only fixed offices are for people who often need to have confidential conversations — like the head of human resources and the CFO.
Working on Starlink
I quickly found that once you're in the circle of trust within Elon Musk's companies, you get a job more easily at another company in the portfolio. For example, someone who started around the same time as me at SpaceX is running IT at X now — the culture is just to do whatever is required.
That mentality is how I started working on Starlink.
The Starlink team had several questions from the Canadian communications regulators. They wanted to know how SpaceX was handling Starlink customer data and the configuration of some Starlink ground systems that were built and maintained by SpaceX. With my background in government work and compliance, it felt like a natural fit for me to step in.
In 2020, I asked to help and was allowed to work on their projects in addition to my work at SpaceX.
The work is rigorous, but people are very accepting
SpaceX was probably the most accepting work culture I've ever participated in.
There also wasn't a lot of value placed on where people went to school. Some of the most intelligent people I worked with there were high school graduates.
Regardless of your background or credentials, it's a place where you have to be able to hold yourself accountable. It's assumed that you should know what you should be doing.
If you're looking for a boss to hold your hand and tell you what you need to do and how to do it, you will be disappointed working with Elon. But if you're looking for a boss who trusts in your decision-making, you'll thrive.
I ultimately left in February 2022 because I felt I was no longer learning. While SpaceX was one of my best work experiences, there seemed to be a high turnover rate where people would leave between their first and second years. After my third year, I was one of the most senior in my group, and there weren't many people to learn from.
My time at SpaceX has helped me run my own company
From there, I started my new project, Inheritance Art, in early 2022. We're working on various projects — from crypto to large language model services and even creating our own AI models. I'm enjoying the challenge, but I still look back fondly on my time at SpaceX.
Working at SpaceX taught me how to hire and manage people efficiently — I was never a fan of middle management, and my experience there showed me how to run an organization without it. Space X is a flat organization, and it works well that way.
1. Business Model
Tesla produces unquestionably innovative products, including a range of electric cars that defy consumer expectations, like the Model S, “the safest and quickest car on the road”. Tesla is also committed to world-changing technology, like its line of fast-charging sustainable batteries.
This relentless commitment to product innovation is one of the key reasons why Tesla enjoys such a cult following. It’s also the reason behind Tesla’s inclusion in the Boston Consulting Group’s top ten list of 2019’s most innovative companies.
Unites fans and customers around the world with its ambitious mission of transforming global transportation and energy production and consumption systems
Builds core groups of dedicated fans and technology enthusiasts, and markets directly to them without involving dealers or middlemen
Encourages extensive customer participation in product development and testing
Invests in infrastructure (for example, its network of supercharger stations) to make it easier for Tesla owners to cover longer distances, boosting uptake of their products
Diversifies its product range with intuitive and useful consumer products that don’t fit into one single market or industry
This fan-focused innovation strategy has earned Tesla a dedicated following. In fact, when the company announced the launch of the Model 3, over 100,000 customers were willing to pay in advance to reserve one.
Not only did this reservation model secure an active customer base in advance - it also gave Tesla access to interest-free capital to finalize the production process. This gives the company an edge over other car manufacturers.
Another unconventional element in Tesla’s business model is its marketing and product launch strategies. The company spends nothing on marketing, doesn’t rely on major advertisers, and yet still manages to generate feverish interest in its products. That’s incredible.
2. Organizational Structure
Elon Musk is no fan of hierarchy in business.
In a now-famous email to Tesla employees, Musk describes how harmful communication hierarchies can be to effective problem solving. Instead, he argues, the most effective communication happens when anyone can talk to anyone else whenever they need to.
“Anyone at Tesla can and should email or talk to anyone else according to what they think is the fastest way to solve a problem for the benefit of the whole company,” he says. “Moreover, you should consider yourself obligated to do so until the right thing happens.”
Elon Musk advocates accessible communication within Tesla. Source: Hacker Noon
The reason for this radically open communication practice? Musk knows Tesla needs a way to gain an advantage over the company’s larger competitors.
“We obviously cannot compete with the big car companies in size,” he says, “so we must do so with intelligence and agility.”
There’s a valuable lesson here for any growing company: Problem-solving relies on effective communication, and hierarchies can prevent the correct flow of information.
An efficient way to achieve that is to adopt a corporate structure that reduces hierarchy friction and and create organizational culture that encourage flexible and fluid communication to get things done.
3. Leadership
Alongside Musk’s embrace of flattened organizational structure is his love for working hands-on in product development and manufacturing.
Musk embraces the idea that a CEO must be intimately familiar with a company’s operations, and places himself physically in the middle of things to drive innovation.
“I move my desk around to wherever the most important place is for the company,” says Musk. “Then, I maintain a desk there over time to come and check in on things.”
This isn’t just a case of micromanagement. Musk is constantly pushing for better results from all parts of the business, and puts himself right in the trenches to motivate people and drive progress forward.
Musk has even been reported to sleep near the production line during product pushes. This kind of borderline fanaticism is a major part of what makes him such an innovative leader: He approaches problem solving with tenacity, vision, and persistence.
Another key part of Tesla’s product development process? Working with hardcore fans and early adopters.
4. Customer Centricity
For too long, the world has been talking about the imminent arrival of the electric car. And yet, despite the availability of affordable models like the Prius and the Tesla Model 3, consumers still don’t seem to be embracing the technology.
For example, in 2016, a record 17.55 million cars were sold in the United States. However, electric cars representing a mere 1% of these sales. This tells us the true appeal of electric vehicle has yet to really take root in mainstream culture.
Tesla is trying to change this. First, by producing exciting and attention-grabbing electric vehicles, and second, by working with fans and early adopters to finesse and fine-tune each of their product releases.
Tesla works closely with early adopters to finesse their vehicles. Source: Medium
For example, in releasing the Tesla Model S in 2012, Tesla sold 100,000 units to early adopters. This gave the company the ability to gain deep and detailed insights from these 100,000 drivers, allowing Tesla to continue to tweak the innovative design of the car.
What’s more, working with these drivers also gave Tesla a dedicated group of cheerleaders to would speak out in effusive terms to media, helping to drive interest in the car.
This commitment to working alongside early adopters is one of the things that makes Tesla such an innovative company. Taken alongside the company’s release of its patents to the public (discussed below), it’s another sign of Tesla’s radically collaborative business model.
Another way Tesla aims to change the discussion around electric vehicles? Committing time, energy, and resources to thinking about the big problems facing mankind.
5. Clear Vision
As Elon Musk wrote in 2013, “Our goal when we created Tesla a decade ago was the same as it is today: to accelerate the advent of sustainable transport by bringing compelling mass-market electric cars to market as soon as possible.”
However, Tesla has a far broader innovation strategy than just developing and market electric cars. In fact, Tesla’s ‘Master Plan’ even outlines a vision for consumers around the world to gather, manage, and store their own electrical sources.
Instead of simply focusing on the commercial success of its innovative products, Tesla incorporates a strong focus on issues of global importance, including:
Sustainable transportation
Climate change mitigation
Promoting renewable energy capture and storage
Shifting to autonomous technology
This ambitious strategic focus reflects Tesla’s understanding that true innovative design is never just about one subject. Instead, innovators must think about solutions to complex and interconnected problems.
Tesla plans to integrate sustainable electricity technology at all levels. Source: Buffalo News
Tesla’s acquisitions strategy reflects this focus, too. In 2016, Tesla acquired solar energy company SolarCity, and has since embarked on a range of transformative energy projects, including installing battery packs on Kauai, Hawaii, to reduce demand on fossil fuels.
Tesla doesn’t limit their thinking to the product level, either. The company spends a lot of time and effort addressing the issues associated with their products, including the potential effects autonomous technology will have on the lives of workers and consumers around the world.
For example, with Autopilot, Elon Musk has promised that by the end of 2019, all of Tesla’s cars will be capable of autonomous self-driving. However, the company also considers the effects this technology may have on professional drivers, and has outlined a way to transition them to new jobs.
This kind of attention to broader global issues shows how Tesla’s approach to innovation extends beyond simply developing great products. Instead, the company puts in time thinking about the larger problems facing the world.
6. Boldness
In growing to be such an innovation powerhouse, Tesla has challenged - and subverted - a lot of conventional wisdom.
This is a core part of innovation - taking something widely considered to be fact, and exploding it with a bold new approach.
For example, conventional wisdom tells us electric cars have to be slower and less responsive than traditional combustion engines, right? Instead, Tesla goes ahead and develops the Model S P100D, the third fastest production car ever released.
The Tesla Model S P100D - defying conventional wisdom. Source: CarBuzz
This willingness to make bold promises has drawn some criticism for Tesla - and in particular Elon Musk - in the past. However, for every instance the company has over-promised on its new technology, there are a handful of examples of its impressive innovation.
Another way Tesla has subverted conventional wisdom? Committing to the public release of all patents for their electric cars.
7. Openness
Unlike other companies, however, Tesla has really put its money where its mouth is.
In 2014, the company started making their patents open to anyone who might be interested in putting them to use, allowing fans and enthusiasts all over the world a glimpse into their technology and techniques.
Tesla has made a huge number of its patents open-source. Source: Electric Cars Report
This bold move is yet another example of Tesla’s commitment to addressing the issues facing mankind. If we’re going to counter climate change, says Elon Musk, then companies and consumers need to be able to work together without commercial factors getting in the way.
“If we clear a path to the creation of compelling electric vehicles, but then lay intellectual property landmines behind us to inhibit others, we are acting in a manner contrary to that goal.”
This commitment to open source innovation shows that Tesla is willing to put some things above its bottom line. This is another reason why the company continues to have such a dedicated following - it’s hard to imagine any of the other big automotive companies taking this step.
The results? Tesla is much more than an auto maker.
As a company, Tesla recognizes one of the most important parts of successful innovation: the value of market adjacencies.
Market adjacencies are areas of products or services just outside the current focus of a particular company. For example, in the 1990s, Nike decided to expand from golf shoes into the market adjacency of clubs, apparel, and other golf equipment, with impressive results.
Tesla has embraced this idea of looking outside the company’s core focus for innovation opportunities. It’s why the company isn’t content to focus just on developing electric cars, and is committed to broadening its market with a diverse range of products.
Now, Tesla is capitalizing on its manufacturing capability to produce batteries, solar panels, and other equipment for the capture, storage, and use of electricity. Given the huge demand for these products around the world, this is a smart move.
Even better, Tesla is approaching this exercise with a focus on sustainability and low carbon emission technology - all part of the Tesla ‘Master Plan’.
A valuable adjacency: moving into consumer batteries. Source: Electrek
In fact, the market for energy storage products is so significant, it has led some business commentators to describe Tesla not as a car company, but as a battery company.
This willingness to explore market adjacencies is part of what makes Tesla such an innovative company. Alongside SpaceX and SolarCity, Tesla is part of a constellation of companies all working in related areas, using smart technology to solve tricky problems.
So, those are Tesla’s eight innovation techniques for shaping the world. But is this company a force for true disruptive innovation?
Sure, Tesla is innovative - but is it truly disruptive?
In some ways, Tesla has been a victim of its own success.
After all, Tesla’s cult-like following has contributed to some claims that the company’s technology is overhyped and overvalued. Others claim Tesla is a long way from reaching profitability, and is struggling to find a broad market beyond its die-hard fans.
These naysayers include Larry Downes and Paul Nunes, authors of a provocative article in the Harvard Business Review in 2017 outlining doubts as to whether Tesla should be considered a true disruptor in the same class as Apple, Netflix, and Amazon.
This article claimed that, while the company does command a dedicated following, Tesla’s actual tech advantages over competitors are slimmer than many fans and observers realize.
The article also notes that Tesla’s capacity to disrupt automotive manufacturing with radical innovation depends on a range of factors beyond the company’s control, including government regulation, the availability of tax incentives, and lobbying on behalf of the petrochemical industry.
For now, all signs point to Tesla having the potential to truly change the face of the automobile industry. However, the company does have a few short-term challenges to overcome first - including the tricky process of scaling up its production capacity.
Take your innovation cue from Tesla
Changing the world with electric cars, exploding conventional wisdom, making sustainability sexy: There’s no other company out there doing what Tesla is trying to do.
By paying close attention to what Tesla is doing, and how it’s doing it, any company can learn a lot about innovation and creativity in modern business.
Tesla identifies six main features of its organizational culture:
Move Fast
Do the Impossible
Constantly Innovate
Reason from “First Principles”
Think Like Owners
We are ALL IN
Move Fast. Speed affects Tesla’s competitive advantages. This characteristic of the organizational culture highlights the importance of employees’ capability to rapidly respond to trends and changes in the international market. The corporation’s human resources provide the capability to develop cutting-edge products that match or exceed those of competing automakers. In this way, Tesla’s corporate culture facilitates business resilience through speedy responses to current issues and challenges in the global automotive industry. This speed factor in the work culture also supports innovation, which is considered a competitive advantage in the SWOT analysis of Tesla, Inc.
Do the Impossible. In developing cutting-edge products, Tesla must ensure that its corporate culture encourages employees to think outside the box. This cultural characteristic recognizes the importance of new ideas and solutions, but it also emphasizes the benefits of considering unconventional ways. For example, human resource managers train employees to go beyond conventional limits of productivity and creativity in design, leading to the development of new solutions to energy and transportation needs. This condition opens new opportunities for Tesla to strategically improve its business performance. This cultural condition also makes the company an influential entity in prompting radical ideas in the international automotive and energy solutions market.
Constantly Innovate. Innovation is at the heart of Tesla, Inc. This feature of the organizational culture focuses on the continuous nature of innovation at the company. For example, the corporation continuously researches and develops solutions that improve current energy storage product designs. In this context of the business analysis, constant innovation helps develop cutting-edge electric cars and related products. Continuous innovation maintains the competitive advantage necessary to address the strong force of industry competition determined in the Five Forces analysis of Tesla, Inc. The company addresses this need through a corporate culture that rewards constant innovation. Managers motivate employees to contribute to constant innovation in business processes and output.
Reason from “First Principles.” Elon Musk promotes reasoning from “first principles.” These principles revolve around identifying root factors to understand and solve problems in the real world. For example, Tesla’s energy storage products are one of the solutions to challenges in using renewable energy, and challenges in improving the efficiency of energy utilization. Through the company’s corporate culture, employees use “first principles” in fulfilling their jobs. Tesla’s human resource management involves training programs to orient employees to this feature of its organizational culture.
Think Like Owners. Tesla employs its organizational culture as a tool to maintain a mindset that supports business development. For example, this work culture motivates employees to think like they own the company. This ownership mindset supports Tesla’s mission statement and vision statement by encouraging employees to take responsibility and accountability in their jobs and in the overall performance of the multinational business. The ownership mindset is a powerful behavioral factor that helps grow and strengthen the integrity of businesses in various industries. This corporate cultural trait aligns workers with Tesla’s strategic objectives, thereby improving strategic effectiveness.
We are ALL IN. Tesla’s organizational culture unifies employees into a team that works to improve the business. For example, this cultural characteristic helps minimize conflicts through teamwork. Such teamwork also develops synergy in the company’s human resources. As a result, the corporate culture maximizes business benefits from employees’ talents and skills. Synergistic teamwork contributes to Tesla’s competitiveness in the international automotive market. This unifying cultural approach also facilitates corporate management and strategy implementation throughout the organization.
The above mentioned cultural characteristics indicate that Tesla focuses on encouraging innovation that leads to useful products for the global market. The company’s progress and growth are based on technological innovation. Tesla’s organizational culture has remained focused on such innovation since the founding of the business. However, it is expected that the company will gradually change its business culture to accommodate new needs as the business expands and diversifies its product offerings.
Musk also encourages people to leave meetings rather than stay in some cases. In a 2018 email to Tesla staff, he said there should generally be fewer, shorter meetings and wrote, "Walk out of a meeting or drop off a call as soon as it is obvious you aren't adding value."
He's also said employees can feel free to buck the chain of command to get things done.
"Anyone at Tesla can and should email/talk to anyone else according to what they think is the fastest way to solve a problem for the benefit of the whole company," he wrote in an email to Tesla staff a few years back. "You can talk to your manager's manager without his permission, you can talk directly to a VP in another dept, you can talk to me, you can talk to anyone without anyone else's permission."
While the demanding hours and ambitious targets in Tesla could be exhausting, some workers have found themselves being underwhelmed in other companies after a tenure with the electric car maker. An engineering manager, who opted to remain anonymous, noted that she actually left Tesla after having a baby. When she was ready to get back on the workforce, she accepted an offer from a large tech company. Eventually, though, she felt that she was not a good fit. It did not take long before the engineering manager decided to go back to Tesla’s high-intensity environment.
“It isn’t just about working less. Everybody should have more work than they can possibly finish at all times. It forces the person to draw the line on when they give up—when they say, I’m done for the day. At Tesla, you have to achieve some kind of comfort knowing you didn’t do it all,” she said.
Elon Musk has noted that Tesla probably has the most exciting product roadmap in the market today. With exciting new electric cars and energy products in the pipeline, the company is bound to grow and expand its workforce even more. The company would most likely demand long hours and ambitious targets for its employees for years to come. Despite this, the company would likely continue to attract the most driven individuals that the talent pool has to offer — individuals that, just like Elon Musk, thrive in the face of pressure.
What kind of management style does Elon Musk follow?
A hands-on approach
Musk is deeply involved in the day-to-day operations of his companies. He is known for his hands-on approach, often diving into technical details and actively participating in problem-solving. He is not afraid to roll up his sleeves and work alongside his employees.
High expectations
Musk has high expectations for his employees and demands excellence. He sets aggressive deadlines and pushes his teams to deliver exceptional results. This can create a high-pressure environment, but it also drives innovation and a relentless pursuit of success.
Visionary leadership
Musk is a visionary leader who sets audacious goals and encourages his teams to think big and pursue groundbreaking ideas. He has a clear vision of the future and motivates his employees to work towards that vision.
Open communication
Musk encourages open and direct communication within his organizations. He values honesty and encourages employees to provide candid feedback and express their ideas. He has been known to use email as a means of communicating with employees directly.
A results-oriented attitude
Musk is highly focused on outcomes and results. He places a strong emphasis on achieving tangible progress and reaching ambitious targets. He prioritizes efficiency and finding practical solutions to challenges.
Commitment to hard work
Musk is known for his demanding work schedule and expects similar dedication from his employees. The work environment at his companies can be intense, with long hours and a strong emphasis on hard work and commitment.
Risk-taking and iteration
Musk encourages a culture of risk-taking and iteration. He believes in pushing boundaries, experimenting, and learning from failures. This approach fosters a culture of continuous improvement and innovation.
It’s important to note that Musk’s management style has both admirers and critics. While some appreciate his ability to drive innovation and accomplish extraordinary goals, others raise concerns about the impact of his demanding style on employee well-being and work-life harmony.
Key aspects of Elon Musk’s management philosophy
Elon Musk’s leadership style and management philosophy encompass several principles and approaches that shape the way he leads and manages his companies. Here is a breakdown of some key aspects of Musk’s management philosophy:
Problem-solving orientation
Musk encourages his teams to approach challenges as problem-solving opportunities. He fosters an environment that encourages experimentation, iteration, and learning from failures. Musk believes that setbacks and obstacles are natural parts of the innovation process and should be used as stepping stones to drive progress and improvement.
Decentralized decision-making
While Musk maintains a hands-on approach, he delegates significant decision-making authority to his teams. He empowers individuals within the organization to make decisions and take ownership of their respective areas. This decentralization allows for faster decision-making, promotes accountability, and enables innovation to flourish at various levels of the organization.
Long-term value creation
Musk’s management philosophy is driven by a long-term perspective. He prioritizes sustainable growth and the creation of value over short-term gains. Musk focuses on building companies that have a lasting impact and contribute to solving global challenges, such as climate change and space exploration.
Safety and quality
Musk places a strong emphasis on safety and quality in his companies. For example, in the context of SpaceX, where human lives are at stake, safety protocols are paramount. Similarly, Tesla’s commitment to producing high-quality electric vehicles is central to the company’s success. Musk emphasizes a culture of excellence and meticulous attention to detail to ensure that his products and operations meet the highest standards.
Focus on rapid iteration
Musk values speed and efficiency in the development and implementation of ideas. He encourages a culture of rapid iteration, where projects are developed in small, incremental steps and progress is continuously assessed and adjusted. This iterative approach enables his companies to iterate quickly, adapt to changing circumstances, and accelerate innovation cycles.
First principles thinking
Musk is a proponent of first principles thinking, which involves breaking down complex problems into fundamental truths and building solutions from there. Instead of relying on conventional wisdom or existing approaches, Musk encourages his teams to question assumptions and explore innovative solutions from the ground up.
Flat organizational structure
Musk favors a relatively flat organizational structure in his companies. He believes in minimizing bureaucracy and promoting direct communication channels to facilitate the flow of ideas and decision-making. This approach allows for a faster exchange of information and encourages employees to have a more significant impact on the organization’s direction.
Talent acquisition and development
Musk places a strong emphasis on hiring exceptional talent. He seeks out individuals who are not only highly skilled but also share a passion for his companies’ missions. Musk values intelligence, creativity, and the ability to work in a fast-paced and demanding environment. Additionally, he believes in providing opportunities for learning and growth, often investing in the professional development of his employees.
It’s worth noting that while Elon Musk’s management philosophy has contributed to his success, it also faces scrutiny and criticism. Some argue that the demanding work culture and high expectations can lead to burnout and employee dissatisfaction. Nevertheless, his management principles have played a crucial role in driving innovation and achieving remarkable milestones across multiple industries.
How to apply Musk’s leadership style
Elon Musk has established himself as a transformative leader in the business world. His unique leadership style has been a driving force behind the remarkable success of his ventures. While replicating Elon Musk’s leadership style to the letter may not be feasible for everyone, there are valuable lessons that individuals and aspiring leaders can apply to drive innovation, motivate teams, and achieve extraordinary results. Here are some key principles from Musk’s leadership style and discuss how they can be applied in various professional settings.
1. Embrace a visionary mindset
Elon Musk’s leadership is characterized by his audacious vision for the future. To apply his leadership style, start by envisioning your own bold aspirations and goals. Develop a clear vision of what you want to achieve and communicate it passionately to inspire and align your team.
2. Foster a culture of passion and drive
Musk’s unwavering passion and drive have been instrumental in his success. Encourage your team members to pursue their passions and provide them with opportunities to work on projects they find fulfilling. Foster a culture that emphasizes dedication, hard work, and perseverance, inspiring everyone to go above and beyond.
3. Encourage risk-taking and learning from failure
Musk’s willingness to take risks and learn from failures is a fundamental aspect of his leadership style. Encourage your team to think innovatively, take calculated risks, and embrace failures as valuable learning experiences. Create an environment where experimentation is encouraged and where individuals are not afraid to challenge the status quo.
4. Promote open communication and feedback
Musk values open communication and actively seeks feedback. Foster a culture that encourages open dialogue, where team members feel comfortable expressing their ideas, concerns, and suggestions. Actively listen to feedback and encourage diverse perspectives, as this can lead to better decision-making and innovation within the team.
5. Think long-term and pursue sustainable solutions
Musk’s long-term thinking and commitment to sustainable solutions have set him apart. Apply this mindset by considering the long-term implications of your decisions and actions. Prioritize initiatives that have a lasting impact and contribute to a sustainable future. Incorporate environmental and social considerations into your business strategies whenever possible.
6. Lead by example and promote accountability
Musk leads by example, actively involving himself in various aspects of his companies’ operations. Apply this principle by demonstrating a strong work ethic and a commitment to excellence. Hold yourself accountable for your actions and encourage team members to do the same. Foster a sense of ownership and responsibility among your team members, empowering them to take initiative and deliver results.
7. Embrace technology and innovation
Musk’s companies are at the forefront of technological innovation. Embrace technology and encourage your team to explore innovative solutions. Stay informed about emerging trends and leverage technological advancements to drive efficiency and competitiveness in your field.
8. Continuously learn and adapt
Elon Musk’s leadership style emphasizes rapid iteration and adaptation. Apply this principle by fostering a culture of continuous learning and improvement. Encourage your team members to seek out new knowledge, acquire new skills, and adapt to changing circumstances. Embrace feedback loops and regularly evaluate strategies to identify areas for improvement.
Lean organizational structure
SpaceX and Tesla are known for their lean organizational structure, which allows them to make decisions quickly and efficiently.
The companies have flat hierarchies and empower employees to take ownership of their work, encouraging collaboration and innovation.
For example, SpaceX has a relatively small team of engineers and technicians, which enables them to quickly make decisions and take actions.
This helps to minimize bureaucracy and ensures that projects can be executed efficiently.
Emphasis on innovation at SpaceX and Tesla
Innovation is at the heart of SpaceX and Tesla’s success.
Both companies prioritize pushing the boundaries of technology and are always looking for new and better ways to do things.
For example, SpaceX has developed a reusable rocket, the Falcon 9, which has revolutionized the satellite launch industry.
Tesla has also been a leader in innovation, with its electric cars and energy storage solutions.
Their innovative projects and products have not only made them industry leaders, but also set the pace for the rest of the hardware engineering industry.
Customer-focused approach
SpaceX and Tesla prioritize delivering value to their customers, which is why they are so focused on speed and efficiency.
The companies understand that their customers want products and services that meet their needs quickly and effectively.
This customer-centric approach drives their speed and efficiency, as they work to provide the best possible solutions in a timely manner. For instance, Tesla has been known to quickly update its electric car models with new features and technology, in response to customer demands.
Use of technology
Technology plays a crucial role in the speed and efficiency of SpaceX and Tesla’s hardware engineering processes.
Both companies leverage technology to speed up their design and development processes, and to ensure that their products are of the highest quality.
For example, SpaceX uses simulation and virtual testing to quickly evaluate the performance of its spacecraft.
Tesla also uses technology to streamline its production processes and improve the quality of its products.
Agile methodologies
Agile methodologies are a key factor in the speed and efficiency of SpaceX and Tesla’s hardware engineering processes.
The companies use Agile methodologies to collaborate effectively, to iterate and incrementally develop their products, and to continuously improve their processes.
For instance, SpaceX uses Agile methodologies to quickly develop and test new technologies, and to iterate on its designs until they are optimal.
Tesla uses Agile methodologies to quickly respond to changes in the market and customer demands.
Go beyond agile and try AI for requirements engineering
Strong leadership
Leadership plays a critical role in the success of SpaceX and Tesla.
The companies have visionary leaders who drive their success and set the pace for the rest of the hardware engineering industry.
Elon Musk, the CEO of SpaceX and Tesla, is known for his ambitious and innovative vision, as well as his determination to make it a reality.
His leadership has inspired the companies’ employees and has set the bar for what is possible in the hardware engineering industry.
Cultural values
Cultural values play a critical role in the speed and efficiency of SpaceX and Tesla’s hardware engineering processes.
The companies value speed, innovation, and risk-taking, which are reflected in their approach to hardware engineering.
For instance, SpaceX values speed, which is why it is always looking for ways to reduce time-to-market and increase efficiency.
Tesla values innovation, which is why it is always pushing the boundaries of what is possible and developing new and innovative products.
These cultural values drive the companies’ speed and efficiency, as they work to deliver the best possible products and services to their customers.
Accelerating into the Future: The Impact of SpaceX and Tesla on Hardware Engineering
SpaceX and Tesla have set a new standard for the hardware engineering industry with their rapid pace of innovation and execution.
This speed is driven by a number of key factors, including a strong company culture, efficient decision-making processes, and an unrelenting focus on progress and innovation.
1. Promote the vision
Musk is expert at selling a futuristic vision where he revolutionizes the traditional profitability model for carmakers. Put simply, he’s messaging not to watch Tesla’s current, plateauing numbers too closely, because they’re irrelevant alongside the coming takeoff. The ability to spin such exciting narratives creates a leap of faith for Tesla investors, and the funds and superrich backing his ventures from X to SpaceX. If the EV maker’s shareholders didn’t largely buy his outlook, the stock wouldn’t carry a nonautomotive valuation of $630 billion even after its recent sharp decline. During one 2023 quarterly earnings call he stated: “I see a path to a 5x value for the company, maybe 10x.” The low end of that prediction would make Tesla 50% more valuable than Apple is today.
Chart shows a timeline of Musk companies
2. Keep promising groundbreaking innovations are almost here
It’s a Musk mantra that he’s constantly on the cusp of introducing revolutionary new products, often on a mass scale. It’s his way of convincing investors that he’ll continue changing the world, and keeping their eye on a gauzy horizon of never-before-seen profits. But he’s always pushing the arrival dates, then doubles down by pushing them back again.
Musk said in 2019 that the world would see 1 million robo-taxis on the roads by the following year. He pledged to deliver the Cybertruck in 2021, then revised the intro to 2022. He now says major output will start early next year. But the Cybertruck—forged from flat plates of stainless steel and looking like it was dropped by an alien race—is extremely difficult and expensive to manufacture, casting doubt on whether Tesla can profitably make it at scale. His glorious predictions that the Boring Company would dig a 10-mile tunnel under L.A. or that Tesla Energy would produce 1,000 solar panel systems per week are long forgotten, perhaps even by Musk himself.
3. Control every aspect of the manufacturing process
For Musk, business is principally about invention and engineering. His genius: Once he’s achieved an innovative design for a car or rocket, he’s expert at creating a super-low-cost, ultra-high-volume production machine. In the words of his biographer Walter Isaacson, he prides himself as the architect who “builds the factories that build the products.”
When he took charge at Tesla in 2008, the engineers who drafted blueprints for the components worked in offices separated from the assembly lines. Musk moved them to cubicles right on the factory floor so they’d witness up close when a design problem caused a slowdown and, in many cases, remodel the part in short order. Musk is a hawk on what he calls the “Idiot Index,” which could also be called a conversion ratio. It’s the measure showing how much a finished component costs to make versus the expense of the raw materials that go into it. That enables him to isolate what the stamping and other manufacturing chains are adding and, if it’s a lot, find a cheaper process.
According to Isaacson, Musk demands that every production and design engineer at SpaceX and Tesla know the precise number for every part they’re responsible for making or designing. It’s their job to push down the costs—or face his wrath. SpaceX makes 70% of its components in-house, in contrast to the typical aerospace industry practice of outsourcing most parts’ production.
In going heavily with vertical integration, Musk also departs from the stance of his hero Steve Jobs. Like Musk, Jobs worked on every aspect of his products’ design, but outsourced manufacturing of both parts and the final iPhones and iPads. By contrast, Musk views doing everything in his own closed loop as essential to controlling his destiny.
4. Pump volumes at all costs
For years, Tesla’s great brand, its head start in the EV race, and Musk’s knack for orchestrating superefficient manufacturing gave Tesla sumptuous margins. But now, Musk is no longer putting profitability first. As he noted on Tesla’s second-quarter earnings call: “Short-term changes in margins and profitability are really minor in the long-term picture of autonomy, and will make these numbers look silly.”
To gun sales, Tesla has been imposing round after round of price reductions. In the U.S., it’s lowered the sticker for the Model Y Long Range from $65,990 to $49,000 since early January. The sharp discounting has shrunk operating margins from 17.2% in Q3 of 2022 to 7.6% in Q3 of this year. Musk’s wager that autonomy will garner software-like profits may be a long shot. And if it’s a long shot that misses, Tesla will look like your average automaker, rather than sporting a valuation that’s almost three times Toyota’s.
5. Ignore conventional corporate financial metrics
Musk doesn’t talk about how he’ll grow the measures that create shareholder value, and that investors want to hear about. He never discusses how he’ll raise returns on equity or on invested capital, or set targets for those bedrock gauges. In fact, his approach to financial management can be downright irresponsible. In early 2021, he overruled his CFO at Tesla to purchase $1.5 billion in Bitcoin, most of which he dumped in 2022 at about breakeven, and SpaceX took a $373 million loss when exiting its position in the signature cryptocurrency early this year.
According to Fortune’s reporting, the banks holding $13 billion in loans to X are deeply frustrated that Musk is supplying little data on its operations. Musk fired X’s CFO shortly after taking charge, and so far hasn’t deemed the role important enough to find a replacement.
6. Spin ‘situational’ narratives to different constituencies
“We may fail, as many predicted,” Musk said recently about his adventures with X. He is constantly portraying X’s financial condition in the worst possible light. Why, you might ask? Simple: To purchase X, Musk borrowed a gigantic $13 billion from a consortium of seven banks. The big interest burden from the deal’s heavy leverage is crippling X and denying Musk the profits needed to build his envisioned “everything app.” But now the banks are stuck with below-market-rate loans they’ve been unable to sell off. The worse X looks to the banks, the better Musk’s chances of either buying the debt himself at a big discount, or getting creditors to greatly lower the principal amounts.
But Musk also has a list of two dozen coinvestors that he’d like to keep happy, a gilt-edged group that includes Prince Alwaleed bin Talal of Saudi Arabia and Marc Andreessen. So at the same time he’s bad-mouthing X’s short-term outlook, he’s singing its eventual promise. In May, he stated that X “could be someday worth $250 million” in a memo to employees that got lots of press coverage, and went one better in July, posting that “X will become the most valuable brand on earth.”
7. Make Jack Welch look timid when it comes to turnover
Musk reckons that a workforce that isn’t constantly churning and ejecting all but the most competent and hardworking employees isn’t maximizing efficiency. Surprisingly, his approach resembles that of 1980s management hero, former GE chief Jack Welch, who made a policy of terminating the lowest-performing 10% of his workforce each year (a tactic that has since been somewhat discredited). “Elon would pitch that it makes sense to let 10% of the people go every year,” recalls Branden Spikes, who worked closely with Musk as a SpaceX engineer from 2002 to 2012. “He’d say that if you don’t fire 10% and replace them with great people, you’re not running at peak potential. It was all math to Elon.”
Spikes recalls working for Musk as both brutal and inspirational. “He never fired someone without cause, and the cause didn’t have to be a big one,” recalls Spikes. “You could make one mistake a year and be forgiven, but not two.”
Spikes also notes that Musk tended to trust engineers far more than people with other backgrounds. “At SpaceX, almost 100% of the managers were engineers, including the HR and finance people,” he says.
8. Dispense with public relations
Musk dissolved Tesla’s PR department in 2019, and as of today, it’s the only public corporation remotely its size operating without one. None of his other holdings has a comms staff either. In an interview at Morgan Stanley in March, Musk mocked the discipline, quipping, “Maybe we should have a VP of propaganda or a VP of witchcraft, that would be a great one!” Musk has made himself both the source of all news about X and one of the loudest voices on the site, recently drawing a huge amount of anger and advertiser fallout after he supported an antisemitic post on X.
9. Get paid based on short-term stock price, not long-term performance
At the close of 2017, the Tesla board awarded Musk a gigantic, 10-year stock options package called the “2018 CEO Performance Award.” It consisted of 12 tranches, each vesting in steps as the market cap rose from the starting point of around $50 billion to $650 billion. In addition, he had to hit rising benchmarks along the way for either sales or profits to clinch each grant.
A blueprint designed to create a super-long-term incentive didn’t turn out that way. Tesla’s valuation zoomed so fast that Musk, by also hitting the majority of the combined sales and Ebitda goals, received all dozen pieces by mid-2021, just three and a half years into the program. Today, Musk still holds an astounding 21% of Tesla’s shares, worth around $137 billion, all harvested from the original plan, and he sold tens of billions in the EV maker’s stock to finance the Twitter purchase and fund his other ventures.
The rub: Musk no longer gets any options or restricted stock, a condition of the 2018 pay deal. So his incentive to improve Tesla’s operating performance is much lower than when he was reaching for the next grant. Indeed, Tesla’s profitability in the first nine months of 2023 is running well below the levels over the same span last year.
10. Fund a big vision with a side venture that makes money
At SpaceX, Musk’s great goal is the quest to take his Starship to Mars. But his rocket business loses money. So Musk found a way to subsidize his passion by launching the Starlink satellite business that has created a space-based internet network of 4,400 satellites. The system enabled Ukraine to communicate with the world despite the destruction wrought by Russian missiles.
Musk aims to expand the service eightfold to 30,000 satellites. Will he get there? Maybe, or maybe not. As long as he can keep followers enticed by his newest shiny object, it’s doubtful anyone will even remember he pledged to in the first place.
Flat heirarchy: engineers make most decisions on technical matters.
Ownership: everyone from lowest to highest own their work and indeed the company through stock awards. This makes them very responsible for their work and company's success.
WarpDrive: both operate same ERP (Enterprise Resource Planning) software called WarpDrive to coordinate most internal operations.
Feedback: advice is solicited from anyone on how the company could operate more efficiently. Elon's door is always open - in fact usually he doesn't have a door or office, just roams the production halls looking to troubleshoot problems.
Shared resources: personnel, products, machinery and techniques are exchanged between both companies. Compartmentalization slows innovation so strictly avoided.
"I think it's very important to have a feedback loop, where you're constantly thinking about what you've done and how you could be doing it better. I think that's the single best piece of advice -- constantly think about how you could be doing things better and questioning yourself."
This is a part of Musk's work ethic and what makes him a good leader, even if the feedback is not what you want to hear. But in trusted teams and positive work cultures, negative and constructive feedback will stretch you to learn new things and consider other, better, options. Musk also once stated, "Don't tell me what you like, tell me what you don't like."
Build a Constant Feedback Loop from Design to Manufacturing.
Whether you’re building a rocket ship or a building, there are thousands of design decisions that need to be made. Musk felt it imperative that design and engineering teams understand how their decisions impacted manufacturing.
The two metrics he optimized above all else were cost and throughput. His complete obsession was critical to propelling Tesla and SpaceX into multi-billion-dollar companies.
Within the theme of feedback loops, he focused on two metrics about all else:
Focus on Throughput
When designing the Fremont Tesla factory, Musk put the cubicles for the engineers right on the edge of the assembly lines so they could see the lights flashing and hear the complaints when one of their design elements caused a slowdown.
He corralled the engineers to walk the assembly line. He kept his desk in the middle of the factory floor (with a pillow underneath so he could spend the night when he wanted).
He implemented the same principle at SolarCity when he discovered how long it was taking to install solar roofs. He required that his engineers install roofs themselves so they could understand how every decision they made had a time impact.
He was maniacal about questioning every assumption. Are three screws needed or would one suffice? How can this be simplified? What can be deleted?
Having architects, designers, and the manufacturing team in a constant feedback loop will naturally streamline design to allow for faster throughput. Those on the factory floor should be consulted and listened to. Throughput can be measured, tracked, and improved upon.
Look inside Tesla's Fremont factory
Focus on Cost
Elon also had an internal calibration helping guide cost that he called the ‘idiot index’. The idiot index measures how much a finished component costs compared to the raw materials. For example, if the raw materials of a component cost $100 but that component costs $1,000 the design is likely too complex or the manufacturing process too challenging and should be questioned and simplified.
Reading about Elon ripping into the bloated Aerospace industry that had gotten fat, happy, and complacent on cost-plus government contracts was an especially enjoyable section of the book for me.
The pioneering of huge presses using 9,000 tons of clamping pressure removed massive amounts of cost and complexity from their manufacturing process.
At the end of the day all of this was possible because of a maniacal focus on increasing throughput through simplification and decreasing cost.
Hold Employees Accountable
I wouldn’t hold up Elon as a beacon for leadership principles. He’s unempathetic, a challenging boss, and unrelenting, but he holds employees accountable for results.
“You can’t tell people to get their shit together, and then when they don’t get their shit together nothing happens to them.” Says Musk.
Musk doesn’t hesitate to make changes that other managers may have balked at. I don’t always agree with his methodology on how he goes about these changes, but I do respect the results of being decisive and shaking things up when it calls for it.
Elon Musk’s “Algorithm”
Another enjoyable part of Issacson’s biography is the examples used on how Musk applies what he calls his “Algorithm”. In essence, it’s a methodology he applies across his companies on everything from eclectic cars to reusable satellites. Here it is quoted in full:
Listical of Elon Musk's Algorithm
Question every requirement.
Each should come with the name of the person who made it. You should never accept that a requirement came from a department, such as from "the legal department" or "the safety department." You need to know the name of the real person who made that requirement. Then you should question it, no matter how smart that person is. Requirements from smart people are the most dangerous because people are less likely to question them. Always do so, even if the requirement came from me. Then make the requirements less dumb.
Delete any part or process you can.
You may have to add them back later. In fact, if you do not end up adding back at least 10% of them, then you didn't delete enough.
Simplify and optimize.
This should come after step two. A common mistake is to simplify and optimize a part or a process that should not exist.
Accelerate cycle time.
Every process can be speeded up. But only do this after you have followed the first three steps. In the Tesla factory, I mistakenly spent a lot of time accelerating processes that I later realized should have been deleted.
Automate.
That comes last. The big mistake in Nevada and at Fremont was that I began by trying to automate every step. We should have waited until all the requirements had been questioned, parts and processes deleted, and the bugs were shaken out.
Do You Have to Like Musk to Learn from Him?
In researching for this article, I came across a great post by David Heinemeier Hansson who said,
Elon Musk Blog Heading Image (8)
Throughout the book I found myself shaking my head in disbelief thinking, ‘gosh, I would never do that.’ but ten pages later I was highlighting a section where I learned something new, that I felt I could personally apply.
It’s ok to cherry-pick and choose what you can utilize and leave the rest behind. I hope this summary was helpful in your personal quest to improve manufacturing in whatever industry you are in.
Definition: Organizing and grouping similar tasks together so they can be done simultaneously without compromising quality.
Examples:
Combining workouts with listening to audiobooks or podcasts.
Holding meetings over lunch.
Allocating specific times for emails rather than constantly checking them.
Optimizing Email:
Key Strategies:
Keep emails short and bulleted:
Answering five key questions: Who are you? What do you want? Why are you asking me? Why should I do what you're asking? What is the next step?
Consolidate emails:
Import all email addresses to a single Google account to avoid toggling between them.
Strictly Segmented Schedule:
Example of Musk's Weekly Schedule:
Monday: SpaceX
Tuesday and Wednesday: Tesla
Thursday and half of Friday: SpaceX
Remaining half of Friday: Tesla Design Studio
Benefits:
Reduces decision fatigue.
Saves energy by reducing the need to think about what to do next.
Helps maintain focus on specific tasks.
Feedback Loop:
Description: Continuously thinking about what has been done and how it could be improved.
Elon Musk's Approach:
Constantly seeking ways to do things better.
Emphasizing the importance of questioning oneself and striving for continuous improvement.
First Principle Thinking:
Definition: Breaking down complex problems to their most basic elements and reasoning up from there.
Application:
Musk applied this to aerospace by analyzing the raw material costs of rockets and deciding to build rockets in-house at SpaceX to save costs and innovate.
Increasing Working Hours:
Philosophy: Success is directly proportional to the amount of work put in.
Musk's Routine:
Aims to sleep around 6 hours per night, going to bed at 1 AM and waking up at 7 AM.
Automation and Delegation:
Strategy: Leveraging teams and resources to handle tasks that do not require Musk's direct attention.
Examples:
Employees at SpaceX and Tesla are expected to be ready with answers to Musk's questions.
Outsourcing tasks such as video editing to free up time for more critical activities.
Seeking Criticism:
Approach: Proactively seek feedback from friends, family, and colleagues.
Benefits:
Gaining insights into potential shortcomings.
Enhancing product and process improvements through constructive criticism.
Be concise and quick when speaking with Musk; you have a very short window (around 30 seconds) to make your point.
Time-Sensitive Communication: Musk is known for sending texts at 2:00 AM and holding conference calls at 6:00 AM.
Intense Work Environment:
High Expectations: Musk's meetings and interactions often require high energy, necessitating preparations like multiple espressos.
Crisis Mode Management: When Musk took over Tesla in 2008, he put the company into crisis mode to push his vision forward.
Mission-Driven Motivation:
Compelling Company Mission: Musk rallies employees around ambitious goals, such as making human life multi-planetary or reinventing the auto industry.
Employee Sacrifices: Employees often work long hours, sacrificing personal time due to their commitment to the mission.
Hardcore Work Ethic:
High Intensity and Long Hours: Musk advocates for 80 to 100-hour work weeks and has created a culture around this intense work ethic.
Leading by Example: Musk himself works extremely long hours, often sleeping at the office or on the floor when necessary.
Cutthroat and Tireless Management:
Demanding Environment: SpaceX and Tesla employees describe a demanding but motivating environment driven by Musk's high expectations.
High Turnover: Employees often leave due to the high demands and intensity of the work environment.
Rallying for Challenging Projects:
Ultra Hardcore Emails: Musk uses emails with subjects like "Ultra hardcore" to prepare teams for upcoming challenges.
Employee Exodus at Twitter: Many employees left Twitter rather than sign up for Musk's intense vision for the company's future.
Lean and Efficient Teams:
Special Forces Mentality: Musk believes in hiring top talent, viewing them as "special forces" capable of handling the hardest problems.
Flat Hierarchy: Musk avoids traditional corporate hierarchy, directly communicating with employees working on projects that interest him.
Financial Incentives:
High Financial Stakes: Musk motivates employees by tying performance to financial outcomes, especially during tough economic times.
Survival Strategies: At Twitter, Musk emphasized the need for significant subscription revenue to survive economic downturns.
Employee Trust and Rapid Advancement:
Rapid Advancement for Proven Talent: At SpaceX, employees who prove their capabilities and innovation can quickly advance.
Trust in Key Personnel: Musk identifies and trusts key personnel to help transform the company.
Key Takeaways from Musk's Management Style
Conciseness and Efficiency: Effective communication and quick decision-making are crucial in Musk's environment.
Mission-Driven Culture: Rallying employees around a compelling mission can drive extraordinary effort and commitment.
Intense Work Ethic: High expectations and long hours are the norm, often leading by example.
Adaptive and Crisis-Mode Management: Readiness to shift into crisis mode to achieve ambitious goals.
Cutthroat but Motivating: The demanding environment is balanced by the motivation derived from working on groundbreaking projects.
Lean Teams with Top Talent: A preference for small, highly skilled teams over large bureaucratic structures.
Financial and Personal Sacrifices: Both employees and Musk make significant financial and personal sacrifices to achieve goals.
Flat Organizational Structure: Direct communication and a flat hierarchy enable faster decision-making and innovation.
Trust and Rapid Advancement: Proven talent is trusted with significant responsibilities and opportunities for rapid advancement.
the company makes about 20 engineering changes every week to its Model S vehicle, many in direct response to what its customers say about their driving experiences, or data the company gathers on how customers use their cars. “Examples include new battery packs, updated safety and autopilot hardware, and software that automatically adjusts the steering wheel and seat for easier entry and exit,” write the article’s authors. Similarly, real-time telemetry data collected from Tesla cars out on the road is helping to refine the company’s Autopilot driver-assistance feature, and customer feedback might well be a contributing factor in the company’s recently announced plans to branch out into auto insurance, in partnership with insurance provider Markel. In short, customer feedback is vital to Tesla when it comes to building better products, reinforcing customer loyalty and exploring new areas of business – and the faster that feedback can be gathered, the better. There’s a great deal here from which other companies on the hunt for digital transformation business models might learn. This ‘fast feedback’ lesson is just as applicable to companies racing to deliver digital products and services quickly. After all, like a Tesla Model S, digital services are products, not projects. They evolve over time, continuing to create value for the business and adapting to address changing customer needs. To create powerful digital customer experiences means moving fast and adapting products as quickly as possible, based on customers’ likes and dislikes. Fast feedback can tell them not just where software isn’t working, but also what customers are looking for in terms of particular features and how well new features are received. These faster feedback loops are achieved in a number of different ways: By assembling small, empowered digital teams Effective, high-performing digital teams should bring together exactly the skills needed to build and deploy a service or feature and keep evolving it. And they should be empowered to take action on any issues that subsequently emerge from customer feedback. With full ownership of, and responsibility for, that service, an empowered team doesn’t need to go elsewhere for approval – and wait for a response – before getting to work quickly on a fix. By shortening software release cycles An architecture based on loosely coupled components that isolate specific functions or business capabilities supports a more continual and incremental release process, as opposed to the less-frequent, ‘big bang’ releases of the past. That’s important for fast feedback, since the larger the release, the more code there is to sift through in order to identify problems and tackle them. Shorter release cycles, by contrast, make it easier to act on feedback quickly. By taking a rigorous approach to metrics Data analytics are key to building a strong foundation for improvement based on customer insight. Customer feedback needs to be gathered widely, in many different formats. We advocate a rigorous approach to monitoring and measurement, so that business data on customer types, churn rates, transaction volumes and the nature and frequency of complaints can all be gathered and collated quickly, for faster time to insight on customer responses and behaviours. Our approach is based firmly on the idea that the faster the feedback loop, and the more rapidly a team can respond to that feedback, the more agile a company will be in responding to changing customer needs and preferences. Quicker assessment of how new features are doing, meanwhile, gives strong clues as to how time and work should be prioritised. It can also help ensure that identified problems don’t happen again. After all, if only a short period has elapsed between a team building a digital service and identifying any issues, the more likely it is that lessons will be learned and applied to future work. And, as a result of fast feedback, it’s not just the quality of work that goes up, but also business value and customer experience. As Tesla CEO Elon Musk put it in an interview with the online publication Mashable on the secrets of his success: “I think it’s very important to have a feedback loop, where you’re constantly thinking about what you’ve done and how you could be doing it better.One Of The Core Product Loops Tesla held its first-ever semi truck delivery event just a week ago. The media paid the most attention to the truck itself and quoted Musk a lot. For me, tho, the most important bit of information came from the other guy on the stage.
I strongly believe that great companies are built on three core product loops:
growth loops that bring new customers;
habit loops that keep existing customers engaged by providing them value;
feedback loops that speed up innovation and improve the product.
Tesla was clearly hinting at the third one. So, let’s examine feedback loops in particular.
A feedback loop is a loop where the output of the system is fed back into the system and the system is calibrated.
That’s a more technical definition. In more simple terms, it speeds up innovation. Which results in improved or totally new products/businesses.
Note that a key part of the definition is that “the system is calibrated”. If you’re collecting feedback but not improving your product, it’s a broken feedback loop.
Note also that the longer the feedback loop, the slower the innovation.
The five-year plans of the Soviet Union are a prime example of both broken and long feedback loops. The data was often incorrect for a variety of reasons. And even when some data points were correct, it took up to five years to make changes.
Most if not all governments work with long feedback loops (with yearly budget planning). But so do many companies (especially the big ones). Which gives startups an advantage.
Speeding Up Feedback Loops
Playing The Telephone
Even if you collect feedback, it might take a long time for the feedback to reach the right people. Tesla, for example, has over 110k employees — that is more than the second biggest city in Estonia. Also, all government employees (officials) use the government services but somehow things still seem to be moving very slowly when it comes to improving them.
So, there’s another push that should be made in terms of processes and culture.
The more people you need to go through, the longer the feedback loop gets. And the more data gets lost on the way. This is called the “broken telephone” effect. Which leads to a reduction in innovation.
Here’s an example of how Elon Musk urges the employees of Tesla to speed up feedback loops:
“A major source of issues is poor communication between depts. The way to solve this is allow free flow of information between all levels. If, in order to get something done between depts, an individual contributor has to talk to their manager, who talks to a director, who talks to a VP, who talks to another VP, who talks to a director, who talks to a manager, who talks to someone doing the actual work, then super dumb things will happen. It must be ok for people to talk directly and just make the right thing happen.”
Elon Musk, excerpt from an email to Tesla employees
So, to speed up feedback, cut down on the number of nodes that messages have to hop through to reach the right person.
Releasing Once In A Blue Moon
The longer the release cycle, the longer the feedback loop. So, it’s no wonder that “Release early, release often” became a mantra for software developers as soon as the open-source projects grew in size.
It’s also one of the big differences between Tesla and most other car manufacturers — Tesla sells cars that change each week basically (in terms of both software and hardware), while the incumbents mostly do big changes with facelifts that take years to come out.
Dogfooding With The Wrong Use Case
Dogfooding
Dogfooding is the use of one’s own products for improving them. It’s the ultimate feedback loop cause it’s the shortest.
But products are often built for a specific use case. Ideally, you’d want to dogfood the product with the main use case. But companies have all sorts of different roles that might not fit the use case.
So, what tends to happen is, that the product that people are supposed to be working on, gets introduced to them only theoretically. A bunch of statistics, a bunch of features, and maybe a bunch of stories from a bunch of potential users. With very little emotional connection.
There are only two solutions to this:
Make people use the product with another use case;
Make people switch roles temporarily.
Both can work. There’s no right answer here really. The difference will be in frequency and willingness.
Using the product for another use case could work well. Especially if it’s a daily use case. But the product might not be suited to it at all, so, the problems that come up are not much related to the main use case. Plus it can result in a lot of daily frustration.
Switching roles is a temporary solution. You can only do it either as part of onboarding or perhaps once a quarter. Sometimes, it’s hard to do even that. Engineers don’t necessarily want to do so sales although they are happy to develop a sales tool.
A fallback (when there’s a lack of willingness) is to at least make employees work in support for a couple of days per quarter, so, that they’d see the problems first-hand.
Don’t Build Stuff For Hypothetical Users If You Can Help It
When you consider building something, prefer building stuff for yourself. You’ll have the absolute shortest feedback loop. It’s why I built Kypsis and Linkchimp — these were problems I had myself. I didn’t need to go ask a bunch of random people what and how to build.
Elon Musk Success Principles
What makes Elon Musk successful? Discover the keys to his success from his own words.
Elon Musk is the greatest and most successful entrepreneur of his generation. He’s one of only two people to have founded three billion dollar companies: PayPal, Tesla, and SpaceX; with an accumulated wealth currently of some $232 billion dollars (July 2023). More than this, he’s revolutionised industries including online payments, electric vehicles, clean energy, and space transportation. Musk is confronting some of the world’s biggest challenges head-on: from reducing global warming through sustainable energy production and consumption, to “reducing the risk of human extinction” by establishing a colony on Mars. And so far he’s winning!
Elon Musk Success Principles
1. Be Better, Not Just Different
Focus on delivering the best quality product that you possibly can that creates real value for the customer:
“Great companies are built on great products.”
“I’d say stay very focused on the quality of the product. People get really wrapped up in all sorts of esoteric notions of how to manage etc., [but] I think people should get much more focused on the product itself – how do you make the product incredibly compelling to a customer – just become maniacally focused on building it better. I think people get distracted from that.”
“You want to be extra rigorous about making best possible thing you can, find everything that’s wrong with it and fix it.”
“Focus on something that has high value to someone else, be really rigorous in making that assessment, because natural human tendency is wishful thinking, so the challenge to entrepreneurs is telling what’s the difference between really believing in your ideals and sticking to them as opposed to pursuing some unrealistic dream that doesn’t actually have merit.’’
“You shouldn’t do things just because they’re different. They need to be better.” (see the same thinking from former Apple design-guru Jonathan Ive.)
“But if you’re going to make a product, make it beautiful. Even if it doesn’t affect sales, I want it to be beautiful.”
“If you’re entering anything where there’s an existing marketplace, against large, entrenched competitors, then your product or service needs to be much better than theirs. It can’t be a little bit better, because then you put yourself in the shoes of the consumer…you’re always going to buy the trusted brand unless there’s a big difference.”
“Other advice I would give is to not blindly follow trends. Question and challenge the status quo.”
“A company only exists if they do useful things for other people… A company must be doing something significant.”
2. Focus Resources
Do your one thing exceptionally well; concentrate your energies and resources, and be clear on what NOT to do:
“If you’re in the early stages in a company, you have to focus your resources. If you diffuse them, your chances for success are much less.”
“I ask myself: Will this activity result in a better product or service? If not, I stop those efforts.”
“At Tesla, we’ve never spent any money on advertising. We’ve put all our money into R&D, engineering, design, and manufacturing to build the best car possible. When we consider spending money, we ask, ‘Will this create a better product?’ If not, we don’t proceed with spending the money.”
“It’s OK to have your eggs in one basket as long as you control what happens to that basket.”
3. Remove Barriers to Create Open Discussion
Break down hierarchies and silos to encourage open dialogue, idea sharing, and collaboration:
“We want our leaders to find ways of motivating and inspiring their teams, reduce the noise in their work and help remove blockers. If you are a manager or leading at any level at SpaceX, we stress that your team is not there to serve you. You are there to serve your team and help them do the best possible job for the company. This applies to me most of all. Leaders are also expected to work harder than those who report to them and always make sure that their needs are taken care of before yours, thus leading by example.”
“There are two schools of thought about how information should flow within companies. By far the most common way is chain of command, which means that you always flow communication through your manager. The problem with this approach is that, while it serves to enhance the power of the manager, it fails to serve the company.
Instead of a problem getting solved quickly, where a person in one dept. talks to a person in another dept. and makes the right thing happen, people are forced to talk to their manager who talks to their manager who talks to the manager in the other dept. who talks to someone on his team. Then the info has to flow back the other way again. This is incredibly dumb. Any manager who allows this to happen, let alone encourages it, will soon find themselves working at another company. No kidding.
Anyone at Tesla can and should email/talk to anyone else according to what they think is the fastest way to solve a problem for the benefit of the whole company. You can talk to your manager’s manager without his permission, you can talk directly to a VP in another dept., you can talk to me, you can talk to anyone without anyone else’s permission. Moreover, you should consider yourself obligated to do so until the right thing happens. The point here is not random chitchat, but rather ensuring that we execute ultra-fast and well. We obviously cannot compete with the big car companies in size, so we must do so with intelligence and agility.
One final point is that managers should work hard to ensure that they are not creating silos within the company that create an us vs. them mentality or impede communication in any way. This is unfortunately a natural tendency and needs to be actively fought. How can it possibly help Tesla for depts. to erect barriers between themselves or see their success as relative within the company instead of collective? We are all in the same boat. Always view yourself as working for the good of the company and never your department.”
Discover more on how to create a culture of candor in your business.
4. Break Things Down and Start by Understanding the Fundamentals
Take problems back to first principles and understand the fundamentals in order to build out solutions:
“Make sure you understand the fundamental principles of what you’re trying to do before you get into the details, otherwise you could be building on faulty ground.”
“[Physics is] a good framework for thinking…boil things down to their fundamental truths and reason up from there.”
The scientific method is a phrase Musk often uses when asked how he came up with an idea, solved a problem, or chose to start a business. Here’s how he describes it:
1
Ask a question.
2
Gather as much evidence as possible about it.
3
Develop axioms based on the evidence, and try to assign a probability of truth to each one.
4
Draw a conclusion based on cogency in order to determine: Are these axioms correct, are they relevant, do they necessarily lead to this conclusion, and with what probability?
5
Attempt to disprove the conclusion. Seek refutation from others to further help break your conclusion.
6
If nobody can invalidate your conclusion, then you’re probably right, but you’re not certainly right.
“That’s the scientific method, it’s really helpful for figuring out the tricky things. But most people don’t use it, they engage in wishful thinking. They ignore counterarguments. They form conclusions based on what others are doing and aren’t doing. The reasoning that results is “It’s true because I said it’s true,” but not because it’s objectively true.”
“One bit of advice: it is important to view knowledge as sort of a semantic tree — make sure you understand the fundamental principles, i.e. the trunk and big branches, before you get into the leaves/details, or there is nothing for them to hang on to.”
“You can’t solve problems with the same thinking that caused them.”
See the 9 key questions to ask when defining the problems you're trying to solve.
5. Seek Criticism and Create Feedback Loops
Actively self-analyse, and look for criticism and feedback of your thinking and ideas from others:
“You should take the approach that you’re wrong. Your goal is to be less wrong.”
“I think it’s very important to have a feedback loop, where you’re constantly thinking about what you’ve done and how you could be doing it better. I think that’s the single best piece of advice: constantly think about how you could be doing things better and questioning yourself.”
“What’s the difference between really believing in your ideals and sticking to them, versus pursuing some unrealistic dream that doesn’t really have merit? You have to be very rigorous in your self-analysis.”
“Accurate self-analysis. It’s difficult to do so, since you’re too close to yourself by definition. People do not think critically enough. People assume too many things to be true without sufficient basis in that belief, so it’s very important that people closely analyse what is supposed to be true, and build it up, analyse things by the first principles, not by analogy or convention, which is actually what most people do, that makes it difficult to gain insight as to how things can be bettered. In any argument or train of thinking, you want to make sure that the underlying premises are valid and applicable, and how the conclusion reached is necessarily driven by the underlying premises and the interconnection between those premises. It’s the foundation of rational thought.”
“A well-thought-out critique of whatever you’re doing is as valuable as gold, particularly your friends. Usually your friends know what’s wrong, but they don’t want to tell you because they don’t want to hurt you. It doesn’t mean your friends are right. But very often, they are right.”
“When I spoke with someone about the Tesla Model S, I didn’t really want to know what’s right about the car. I want to know what’s wrong about the car. When my friends get a product, I ask them to please not tell me what they like. Rather, tell me what you don’t like. And if I’ve asked that a few times of people, then they will start automatically telling me without me having to always ask the question.”
“I think it’s important for people to pay close attention to negative feedback and rather than ignore negative feedback, you have to listen to it carefully. Ignore it if the underlying reason for the negative feedback doesn’t make sense but otherwise, people should adjust their behaviour.”
“I’m not perfect at it, for sure, but I do think it’s really important to solicit negative feedback, particularly from people who have your best interest in mind.”
Uncover the power of feedback loops.
Elon Musk Failure is an Option
6. Failure is an Option
Accept failure, practice for it, and don’t be afraid:
“Failure is an option here. If things are not failing, you are not innovating enough.”
“If every time somebody comes up with an idea it has to be successful, you’re not gonna get people coming up with ideas.”
“People tend to over-weigh risks on a personal level. It’s one thing if you’ve got a mortgage to pay and kids to support, so that if you were to deviate from your job, well, how are you going to feed your family and pay the rent? That’s understandable, but let’s say you’re young and you’re just coming out of college, what are your risks? You’re not going to starve, certainly not in any kind of modern economy. It’s so easy to earn enough money just to live somewhere and eat food. Very easy to do. So I don’t know what they’re afraid of. Mostly afraid of failure, I think, but people should be less risk averse, when there’s not much at risk.”
“If something is important enough you should try, even if the probable outcome is failure.”
7. Hire The Best and Fire Fast
Prioritise hiring to fuel growth, but act quickly when things don’t work out. Focus on building the best possible team, and don’t compromise:
“Join a group that is amazing that you really respect, or if you are building a company you’ve got to gather great people.”
“I think you definitely don’t want to grow too fast. Make sure that every person you hire you really need to hire that person.”
“One lesson I learned [at PayPal] is to fire people faster. That sounds awful, but I think if somebody is not working out, it’s best to part ways sooner rather than later. It’s a mistake to try too hard to make something work that really couldn’t work.”
“Hire great people…this is 90 percent of the solution, as hiring wrong can cost you so much. We challenge our people leaders to hire people that are better than themselves, therefore making the company better with each hire.”
“Talent is extremely important. It’s like a sports team, the team that has the best individual player will often win, but then there’s a multiplier from how those players work together and the strategy they employ.”
“I have an exceptionally high standard for people that get hired, and especially for SpaceX. We really aspire to hire quite literally the best people in the world at their job. Finding such people is so hard…When we find them, we are generally able to attract them to the company…But the number one issue for me is finding superlatively talented people. I think we’ve been fortunate to find some very, very talented people at SpaceX, but that is always the governor on growth.”
“Starting and growing a business is as much about the innovation, drive, and determination of the people behind it as the product they sell.”
8. Work Like Hell and Don’t Be Afraid to Get Your Hands Dirty
Be prepared to put in the effort and roll your sleeves up to get the job done:
“Be very rigorous in your self-analysis, certainly be extremely tenacious, and just work like hell. Put in 80-100 hours every week. All these things improves the odds of success. If other people are putting 40 hour work weeks and you’re putting in 100 hour work weeks, even if you’re doing the same thing, you know that you will achieve in four months what it takes them a year to achieve.”
“I’d really strongly recommend someone to just focus on one company and throw as many hours at it as you possibly can. Really work morning to night. Think about it in your sleep. Seven days a week. No breaks. That’s what you should do when you are starting a company.”
“In all of the companies I’ve been involved with, there’s always been a very difficult time. It’s usually shortly after the beginning. Things seem optimistic, rosy, and exciting for the first 6 months to a year, then things start to go wrong. You encounter issues you didn’t expect, step on landmines. It’s bad…In most cases, companies go through this phase of you being in constant danger of the company dying. If you’re co-founder or CEO you have to do all kinds of tasks you might not want to do…if you don’t do your chores, the company won’t succeed…no task is too menial.”
9. Keep Trying and Have a High Pain Threshold!
Be persistent, and don’t sell yourself short:
“I think that people self-limit. The number one thing is people should just keep trying, did you try yesterday? Did you try today? It takes a lot of mental exertion to innovate.”
“Persistence is very important. You should not give up unless you are forced to give up.”
“If something is important enough, even if the odds are against you, you should still do it.”
“I think most people can learn a lot more than they think they can. They sell themselves short without trying.”
“Starting a business is not for everyone, starting a business, I’d say, number one is have a high pain threshold.”
“If you don’t mind things being really hard and high risk, then starting a company is a good idea. Otherwise, it’s probably unwise. It will certainly stress you out. So I think you have to be pretty driven to make it happen. Otherwise, you will just make yourself miserable.”
The leadership style of Elon Musk is a hands-on approach that combines several traditional and modern styles. We can’t point to a single leadership style because that would overlook the various facets that make his style unique. At the least, it combines:
Transformational leadership
Visionary leadership
Micromanagement to the point of nano-management
Democratic leadership
Autocratic leadership
Laissez-faire leadership
Cultural leadership
How Elon Musk Applies His Leadership Style
The most interesting part is that the Elon Musk leadership style seamlessly switches between multiple styles based on the situation. Musk turns to an iron-fist autocratic style — a la Apple’s Steve Jobs — when the situation requires it. When team members’ input is ideal for problem-solving, employee well-being, an improved work environment, or talent acquisition, he changes to democratic leadership. And once employees understand his vision and expectations, a hands-off, laissez-faire style takes precedence.
When you’re a manager who is overly obsessed with product quality and the constant need to improve business processes, the switch between styles may seem innate.
But a successful leader isn’t necessarily a jack-of-all-trades and instinctive leadership adaptability. You likely aren’t running Tesla Motors or developing a new line of electric cars. You just need the vision to realize your initiatives and apply a transformational leadership style. Above all, a transformational leader inspires others toward a common goal while creating new solutions to old problems.
What’s Transformational Leadership Anyway?
Leader talking to smiling employees in the office
Musk uses numerous leadership styles, but if you have one takeaway, transformational leadership is probably the most useful form in startup companies. As the name implies, transformational leadership transforms the way people work. They share the same vision and goals as the leader, feel inspired by his vision, and work harder to achieve it.
At its core, transformational leadership is the result of four tenets — often referred to as the “4 I’s”:
Individualized consideration and concern for each employee
Intellectual stimulation
Idealized influence
Inspirational motivation
The Elon Musk leadership style embraces these four ideals, obviously with his own personal twist. Let’s take a look at each to dig deeper into the psyche and skill development of great leadership:
Individualized Consideration and Concern
“My biggest mistake is probably weighing too much on someone’s talent and not someone’s personality. I think it matters whether someone has a good heart.” — Elon Musk
Individualized consideration and concern isn’t a routine one-on-one meeting or an annual performance review. It’s how much you recognize the individual's needs, how you meet those needs, and how you provide support on a professional and personal level.
Sometimes, this means you’re acting as a mentor. Other times, you’re providing emotional support and empathy. In other situations, you instill trust while acting as a coach or guide.
The overarching idea is that you can’t treat every employee as if they were the same individual. Blanketed approaches to management and leadership are null and void in transformational leadership. Yet this leaves you with one of the most arduous but rewarding tasks of all: knowing your employees on a personal level, understanding their situations and backgrounds, and learning how to utilize their strengths.
Intellectual Stimulation
“Most people can learn a lot more than they think they can.” — Elon Musk
As Musk puts it, people’s abilities are as high as the leader can put it. Stagnation, repetitive tasks, and lack of professional development often hinder these abilities, leading the employee down the path to burnout or apathy.
You don’t have to give differential equations to your marketing department to intellectually stimulate. Perhaps counterintuitively, your role in Elon Musk style leadership is to challenge the status quo, take calculated risks, and push others to think outside the box.
Intellectual stimulation isn’t always about academics. It’s about problem-solving, expectation, and empowering employees to understand that they have the key to the problem. They just have to apply themselves.
Idealized Influence
“People work better when they know what the goal is and why.” — Elon Musk
One shared idea of both the Elon Musk leadership style and transformational leadership is that the leader acts as a role model who employees trust and respect. That’s no small order; employees’ past instances of poor management or lack of respect from managers can deride your ability to influence.
In a Forbes article from former SpaceX Head of Talent Dolly Singh, Singh discusses how a failed rocket launch actually influenced others to work harder. Musk — undeterred by the failure — told his team that failure was always a possibility and a risk, but if they stuck with him, they would eventually overcome.
Coaching employees to overcome adversity is part of this idealized influence. Beyond this aspect, you also need to develop reward systems to encourage employees to work to their best efforts while also providing constructive criticism.
Idealized influence is the hardest part of transformational leadership to master, but equally as important to embrace and apply the Elon Musk leadership style.
Inspirational Motivation
“It is important that people look forward to coming to work in the morning and enjoy working.” — Elon Musk
Inspiring and motivating employees isn’t a singular experience. It requires individualized consideration and concern; what may inspire one employee may not inspire the next. You must pivot for each person and task while retaining your visionary goal.
Your energy and enthusiasm for every task or project — no matter how big or small — have to be contagious. You need to motivate by example, set goals and expectations, and empower employees to share your passion through their own means.
How To Apply Elon Musk Style Leadership at Your Startup
Elon Musk with employees
Using the four tenets of transformational leadership, you can employ Elon Musk style leadership at your business. Through individual actions, you position yourself to embrace the leadership philosophies of Musk, forming a cohesive, motivated, and inspired team. We recommend these actions in each of the “4 I’s” to ease yourself into Elon Musk style leadership:
How To Implement Individualized Consideration and Concern
Provide constructive and effective feedback.
Use multiple communication methods.
Help your employees move out of their comfort zone
How To Implement Intellectual Stimulation
Question current methods and push employees to develop new solutions to old processes and problems.
Read and read some more on trends, your industry, and anything that stimulates you. Encourage employees to do the same.
Help employees understand that failures are a catalyst for future solutions.
Understand what stimulates each individual and use these ideas to push your employees to do better.
How To Implement Idealized Influence
Acknowledge risks and difficult situations. Ditch the rose-colored glasses and become a realist in situations that necessitate it.
Always focus on the positives instead of shortcomings. Not everyone is going to have their best day — it’s human. Remember that the next day brings new possibilities.
Be kind, be transparent, and be visible. You’re the influential force behind your startup.
How To Implement Inspirational Motivation
The Elon Musk leadership style employs micromanagement or even nano-management. This may work for Elon, but you're not quite there yet. Instead, allow employees autonomy and the freedom to find solutions without standing over their shoulders.
Create a recognition and reward system that helps your employees feel valued for their work.
Build a big picture and reiterate where everyone fits into your vision.
Continuously build on employee engagement. It’s a dynamic concept that changes with personal lives and professional goals. Dig deeper, meet with employees, and understand how their individual scenarios shape engagement and motivation.
No large meetings unless they're of value to the entire audience. Keep them short.
Don't have frequent meetings unless the matter is truly urgent. Resolve it; stop meeting.
If you are not adding value to a meeting, walk out or drop off the call.
Don't use acronyms and nonsense words for objects, software, or processes.
Avoid any terms that require explanation, because they inhibit communication.
Communicate directly with individuals rather than through a chain of command.
Any manager enforcing chain-of-command communication will be fired.
Don't follow any "company rule" that doesn't make common sense.
Ideas that increase productivity or happiness are always welcome.
Contractors who can't find an employee to vouch for them will be fired.
Never do anything that would make a great Dilbert cartoon.
– Excessive meetings are the blight of big companies and almost always get worse over time. Please get of all large meetings, unless you’re certain they are providing value to the whole audience, in which case keep them very short.
– Also get rid of frequent meetings, unless you are dealing with an extremely urgent matter. Meeting frequency should drop rapidly once the urgent matter is resolved.
– Walk out of a meeting or drop off a call as soon as it is obvious you aren’t adding value. It is not rude to leave, it is rude to make someone stay and waste their time.
– Don’t use acronyms or nonsense words for objects, software or processes at Tesla. In general, anything that requires an explanation inhibits communication. We don’t want people to have to memorize a glossary just to function at Tesla.
– Communication should travel via the shortest path necessary to get the job done, not through the “chain of command”. Any manager who attempts to enforce chain of command communication will soon find themselves working elsewhere.
– A major source of issues is poor communication between depts. The way to solve this is allow free flow of information between all levels. If, in order to get something done between depts, an individual contributor has to talk to their manager, who talks to a director, who talks to a VP, who talks to another VP, who talks to a director, who talks to a manager, who talks to someone doing the actual work, then super dumb things will happen. It must be ok for people to talk directly and just make the right thing happen.
– In general, always pick common sense as your guide. If following a “company rule” is obviously ridiculous in a particular situation, such that it would make for a great Dilbert cartoon, then the rule should change.
If there is something you think should be done to make Tesla execute better or allow you to look forward to coming to work more (same thing in the long term), please send a note to [redacted]
Thanks for being such a kickass team and accomplishing miracles every day. It matters. We are burning the midnight oil to burn the midnight oil.