Photo credit: Haiyun Jiang/The New York Times

Elon Musk’s rash decision-making and leadership style could adversely impact Tesla’s future success

Article published in the Philadelphia Business Journal on June 23, 2024.

On June 13, Tesla shareholders overwhelmingly reaffirmed Elon Musk’s 2018 compensation package, demonstrating confidence in his ability to lead Tesla to greater heights. Musk’s rash decision-making and leadership style, however, could undermine Tesla’s future success.

The ability to supercharge a Tesla in 15 minutes could add 200 miles of range, an important feature to customers deciding to purchase electric vehicles. So, what did Musk do? On April 29, he abruptly fired Tesla’s 500 employees who are building out the supercharge network.

Why did Musk fire these employees? It is reported that Musk did not like a presentation by Rebecca Tinucci, leader of the 500 member supercharge team. Tinucci laid off 15% of her staff as part of a corporate-wide personnel reduction. Musk wanted more layoffs.

Tinucci argued that was not in the best interests of the company, so Musk fired her and her entire supercharge team. Reuters reports that the account of what occurred at the meeting between Musk and Tinucci, the only participants, came from interviews with eight supercharge team members and a contractor.

Facing significant criticism, Musk began to rehire the supercharge team on May 13.

This is not the first time Musk did not think before making a rash decision. In a Nov. 21, 2022 column headlined “Elon Musk has not demonstrated good critical judgment as CEO of Twitter (now X),” I wrote that he has been inconsistent in his statements and actions about reducing Twitter staff, creating havoc within the ranks.

On Oct. 20, 2022, The Washington Post reported that Musk told potential investors that he intended to fire nearly 75% of Twitter’s employees. A week later,  Musk stated that he would not do so.

On Nov. 4, approximately 50% of Twitter’s employees were terminated. Musk tweeted, “Regarding Twitter’s reduction in force, unfortunately there is no choice when the company is losing over $4 million per day.”

Photo credit: Haiyun Jiang/The New York Times

By Nov. 6, Musk realized that some of those employees terminated two days earlier were needed to build the new Twitter features that Musk had publicly touted, and they were invited to return to the company. Such action doesn’t build trust and confidence in him.

A few days later, Musk issued an ultimatum that any employee unwilling to work in a demanding hardcore environment which would require complete dedication to building Twitter 2.0 would be fired and receive three months severance. Employees were told they needed to indicate their decision by 5 pm on Nov. 17.

His ultimatum backfired. More than 2,000 employees took the severance offer, leaving the company woefully understaffed.

A December 2018 Wired article is headlined, “Dr. Elon & Mr. Musk: Life inside Tesla’s production hell,” recounts the efforts of Musk and his team to launch the Tesla Model 3.

The article’s headline, a play on the classic book and its 1931 film adaptation titled “Dr. Jekyll and Mr. Hyde,” was no accident. The film is about “Dr. Henry Jekyll, a well-respected scientist, and his mysterious and malevolent alter ego, Mr. Edward Hyde, … an embodiment of Jekyll’s darker impulses.”

During this very stressful time to launch the Tesla Model 3, Musk is reported to have abruptly fired people for the most inconsequential of reasons. Musk claimed that he fired people because they fell short of his performance standards. Reading recounts of these events, it is clear that in many cases, the firings were at Musk’s whim and had nothing to do with the individual’s performance.

Employees do not want to work for a micro-manager or nano-manager (as Musk once described himself). They want to work for a company led by a CEO that is consistent and readable and treats its employees as empowered valued assets. This does not describe Musk. It is reported that between January 2018 and December 2019, 35 senior leaders left Tesla, a very significant number that either were fired or quit.

Why do people want to work for Musk? He is a visionary, and his employees who tolerate his leadership style buy into his visions for his companies, whether it be Tesla building electric vehicles that could eventually be self-driving, SpaceX sending men into space or his recently launched company xAI developing artificial intelligence.

One can only speculate how much more successful Musk and his companies would be if he was less subject to sudden or unpredictable changes of mood and mind and treated his employees as valuable assets to his companies.

Stan Silverman is a former CEO and author of “Be Different! The Key to Business and Career Success.” He is also a speaker, advisor and widely read columnist on leadership. He can be reached at stan@silvermanleadership.com.

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