What Can We Learn from Elon Musk and Tesla?

This is the first of two parts of a talk that I gave at the 18th ASPLI Summit at Sugarland Hotel in Bacolod City last September 21, 2017. The topic of the talk is How to be a Champion Leader: Business Success through Best Execution.

Whenever I tackle issues on strategy formulation and business process performance management with clients in the course of my consulting engagements, the importance of leadership inevitably arises. Understandably, when the term “Champion Leader” is mentioned (to mean a leader that can engage employees and excite customers) the conversation would always gravitate towards Steve Jobs and how he has led Apple. Today, I’d like to focus on another leader who may not (yet) be as well-known as Steve Jobs but whose work I believe will have a profound impact on humanity in the decades to come.

To those that have not heard about Elon Musk, allow me to give a brief introduction.

15 Things You Didn’t Know About Elon Musk by Alux.Com

Musk was a co-founder of a company that later became PayPal and lately famously launched SpaceX, a commercial outer space transport company that builds rocket ships that can land vertically – just like in the sci-fi movies!

Musk is also the Chairman of SolarCity and the CEO and Chief Technology Architect of Tesla, the most prominent maker of one hundred per cent electric cars.

The Champion Leader fails early and often

Just a few years back, Elon Musk’s record with his companies would arguably be the exact opposite of what we expect from a good, successful leader. Tesla alone had seen multiple near-fatal setbacks:

  1. Tesla had been bankrupt for a couple of times and needed to recapitalize each time.
  2. Elon drove his people very hard and his startup factory had a dismal safety record.
  3. Tesla employees complained about long hours, stress, pain and injury.
  4. A Tesla driver was killed in a crash during a public beta of the car’s autopilot system.
  5. In a candid moment of realization, Musk remarked that in light of the competition with giants, an “auto company must be the dumbest thing you can possibly start”.

The many failures of Elon Musk in one infographic

Yet today Tesla is considered an industry leader with a market capitalization that is higher than either General Motors or Ford. The company has since started a 3rd shift (to the relief of its workforce) and today its safety record is 32% better than the industry average. Musk continues to drive his employees hard and makes no excuses about it but at the same time has publicly committed to find a more humanistic approach.

We can describe Elon as a Champion Leader not only because of the grand ideas he conceives, the loftiest goals he sets from those ideas, the resoluteness and intensity in his pursuit of those goals but also in tapping talent to accomplish those goals. The quote from Elon on this slide conveys his enduring belief in the ability of people and explains why he drives his people hard.

Elon

How do you choose?

Perhaps Elon Musk’s most striking attribute of Champion Leadership is that even though he failed early and failed often, he used the failures to identify and address his own blind spots and to make meaningful improvements.

Elegant simplicity

Let me spend a moment on Tesla X, one of the car models currently under production by Tesla.

Tesla X

Simple, isn’t it?

Tesla vehicles are often described as the future of automobile. This is due to the abiding conviction to replace the gasoline powered car because it is obsolete as it is bad for the environment and society. In the past, the skeptics have dismissed the electric car as being underpowered as a consequence of the emphasis on green technology. Not anymore. The Tesla X can go from 0 to 60 miles per hour in 2.9 seconds.

Tesla Model S P100D Ludicrous vs Lamborghini Huracan 1/4 Mile Drag Racing Battle YouTube video (check out which car wins at 1:36)

Just like with Steve Jobs and Apple, Tesla is committed to elegant simplicity in its design. Why is a Tesla car a model of elegant simplicity? It has 10% of the moving parts of the internal combustion engine and in that sense, far simpler:

  1. Its simplicity enables it to be more efficient, durable and reliable. As production techniques improve, it is foreseeable to have cars that will last 40 years.
  2. More of a car’s systems and resources can be devoted to safety leading to a 90% reduction in insurance costs.

Analogy between cars and companies

An organization can be likened to a car. An organization also has many “moving parts” in order for it to travel from its present position to its envisioned future.

And just like an internal combustion car, many of our organizations have become very complicated:

  1. This may be the result of geographical expansion – the addition of stores and offices in order to better serve both our existing and potential customers;
  2. This may arise from adding more product lines; or
  3. This may be because of changes we make in the way we run our business – basically tinkering with the engine while it is running:
    1. In response to new laws and regulations;
    2. The need to improve operations for better control or more efficient execution;
    3. A desire to match the efforts of our competitors; or otherwise;
    4. React to market shifts that portend potential disruption.
Complicated

It’s (getting) complicated ….

We all understand from our experiences how complicatedness hinders office productivity. Complicatedness often leads to a work environment that leaves employees disengaged and unmotivated:

  1. Workers need to spend time learning to navigate through a twisty work system and carry on through that system each and every day;
  2. Decisions are slow and there are endless meetings to attend; and
  3. Managers tend to micromanage to get things moving through the complicated state of affairs – but this only makes matters worse.
Disengaging

Is this familiar?

When Business Excellence Teams Fail

We have process improvement teams composed of six sigma, lean and TQM experts, all properly certified and minted. They can make our work simpler and more efficient:

  1. … but not all the time
  2. … and sometimes not for very long.

By one estimate, as many as 70% of process improvement projects fail. As a result, organizations tend to focus on the manner by which we execute those process improvement projects. The knee-jerk reaction of many impatient business executives is to blame the process improvement teams and prescribe the adoption of agile methods. Agile is seen as a panacea: just jump right in and quickly create “solutions”. But does this really address the root cause of why process improvement projects fail?

agile1.png

In the second part of this series, we will tackle how to really improve the chances of succeeding with your process improvement projects.

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