Episode Transcript
Speaker 1 00:00:10 Hey guys. Today I want to talk about Elon Musk. I just finished reading Walter Isaacson's book. I think it's well worth reading, even though it leaves out a lot of things. And given that Elon is the wealthiest person in the world, certainly a lightning rod for opinions may be a role model for future leaders. What can we learn from his success, experience, and behavior? Now, first of all, let me, you know, simply state, he is the wealthiest man in the world. He may have more power than any other individual at this point in time for a whole variety of reasons. So whether you like him as a human being or not, the economy is rewarding him. What he is doing has worked extremely well for him and for his companies, and one could argue for the future of the planet. And as you read the book, what you find is that even though he had a very troubled childhood, he is a mission-driven individual.
Speaker 1 00:01:13 And so the first lesson I take away for leadership and business is that mission matters. And this is a whole chapter in my book, but you know, the, the point is that if you as a leader, whatever you're leading, don't know what you're trying to accomplish for the broader good, and I mean the broader good meaning maybe your whole company, maybe your team, maybe your customers, maybe society, maybe some other set of stakeholders, you're going to have a hard time maintaining the pace. And what you find when you study Elon Musk is work on rocket sciences, work on electric cars, is work on neural link, the boring company, all these other things, including Twitter. By the way, there is a reason he bought Twitter. I'll tell you a little bit more about what I think that is, is he really is mission driven and people join his companies because of that.
Speaker 1 00:02:02 I know people who work at Tesla and they don't like the long hours and they don't like the management environment, but they wanna be part of the mission. And that is worth a lot in an environment where it's pretty hard to hire people. So that's number one. Number two, of course, he's very, very dynamic. He believes that when there is a problem, we should stop what we're doing and swarm together and fix it today, not next week. Let's not set up a task force. Let's not create a series of meetings and PowerPoint presentations. I want you guys on a plane. I want you in Texas, and we're going to fix the leak in the SpaceX booster tomorrow. So I want 200 engineers here tomorrow. This is what happened when he took over Twitter. And there's example and example after example in the book. And even though I know that is not possible in very large organizations, there is a point to that.
Speaker 1 00:03:01 It makes a lot of sense. I have been involved in dozens and dozens of projects, some of which, by the way, wrote Deloitte, where we assigned a bunch of teams, created task forces, set up meetings, had committees to oversaw, see this, that, and the other thing. And you know what? Not much happened. We wasted a lot of time, we had a lot of long ongoing debates, and the execution of these things really was imperfect. And nothing creates execution better than locking people in a room for a limited period of time and saying, we are not leaving this room until we resolve this issue. And if we have to debate it or fight it out, we will do that. And he does that. Which leads me to the third issue I wanna point out is that based on the information that comes out of the book and a lot of other studies and research that's been done about Elon's background, he does have some Asperger's like personality traits.
Speaker 1 00:04:03 And several of the people in the book say this, that he understands people issues, but he doesn't feel them. So he can be very hard on people and really not even know it. Now that gets to the issue of leadership style and leadership culture. My friend PV Murthy just wrote a book on humble leadership, which he, he sort of characterized me that way. Well, maybe Elon's not very humble. I don't think he is. Maybe he's not very caring. Maybe he's not an empathetic leader. Maybe he's not a human centered leader. Maybe he's not a charismatic leader. Sometimes he is, sometimes he isn't. He's very mercurial. He is very unpredictable. He has a dark side, but he gets stuff done. And what I take away from that is something that most of you who've been in leadership roles probably know there are times during crisis, during stress, during problems, when you can't just be the nice guy or gal, it doesn't work.
Speaker 1 00:05:04 People won't respond fast enough or appropriately unless you're tough. And those to me, in my situation particularly have been the most difficult times in my career. But Elon makes a success out of that, even though we might criticize it. So, so that's the third thing I want you to think about. The fourth thing that he talks a lot about, and this goes back to his background as a scientist or an engineer, and, and I can relate to that because I'm an engineer, is getting to root causes basic principles when there is a problem, rather than blaming people, rather than setting up a task force, studying it over and over again, he rethinks the problem. He basically says over and over and over again in his companies, why are we even doing it this way? Who made the decision that we would do it this way versus that way?
Speaker 1 00:05:59 Why are we not rethinking the problem from the beginning? And frankly, we have to do that in business today. There is a history in my career, and certainly in many, many companies of piling on lukewarm ideas, on top of other lukewarm ideas, on top of other lukewarm ideas, when the fundamental principle may have been wrong in the first place. And of course, the reason for that has to do with people trying to protect their turf. People that are deemed to be experts, not giving way to people with new ideas, hierarchical leadership, age bias. There's all sorts of reasons why this happens. But what Elon seems to be able to do is go back to basic principles. And when you read the book and you learn a little bit about his management style, and you know, I have never met him, he does this by personally getting involved in big problems and personally looking under the covers and asking hard questions.
Speaker 1 00:06:59 Now, I happen to be a little bit like that at times because I have an engineering background and I've noticed that it upsets people. People that have been involved in a project and they've spent a lot of time on it, and they've been working on the project management and the planning and the implementation. And you go back and question the fundamental idea behind it. It's, it's exhausting for them. It's difficult for them to understand. And so that gets to the issue of how do you manage change? And again, in the book and a lot of the stories about Tesla and others, you find that he doesn't manage change particularly well. People leave, people get upset, there's fist fights, <laugh>, there's arguments. I mean, there's all sorts of dysfunctional things that happen, but you know, he's thrived regardless of that. Now, what we would obviously say in response to that, those of us in HR is we need to build a culture of learning.
Speaker 1 00:07:56 We need to build a culture of asking questions, a culture of talking about mistakes. In fact, we've done whole studies on this. We did an entire study on learning culture. And among the many things we learned, the most important part of a learning culture is being able to talk about mistakes and not blaming people or hiding them under the rug or being afraid to bring them up, but talking about them openly and taking a logical view as to what we could do better or different. Now, you may not know, but the organization that is probably the best role model in this particular area is the military. I've never been in the military, but I've worked for people who were senior in the military and I have lots of associates that have been in the military. And one of the things they do in the military is they have after action reviews, they stop at the end of an exercise and they go back and they talk about what didn't work.
Speaker 1 00:08:50 And in a sense, as one of my old bosses said many years ago, there's only two things that the military does. They fight and they train. And when they're not fighting, they're training. And in other words, point they're, they're trying to make is that everything in the military that isn't about execution is about learning and inspection and improvement. And so I think there's a big lesson there from Elon. Now, we have come up with a framing for this, and we call it falling in love with the problem. And for those of you that are in hr, you're hearing more and more about our systemic HR research that's coming out later this year. What we're basically finding is one of the challenges we have in HR is we fall in love with our solutions. We design a program, a training program, an onboarding program, a performance management program or awards program, a pay program, whatever it is.
Speaker 1 00:09:44 We do a lot of study and maybe a user-based design to develop that program. And we roll it out and we cross our fingers that it's gonna do what we wanted it to do. We don't talk enough about the problem. What problem are we trying to solve? A great example of this issue is the massive amount of work going on in skills based organization, projects inside of companies. You all know how complex this is. I just had a meeting with five or six very senior Closs this week, and they're building all sorts of cool things and buying tools and implementing different technologies. And I made the point that in most cases, these projects languish and don't really succeed if you don't know what problem you're trying to solve. And you know, they all kind of agreed with me. And I mean, specifically, are we trying to hire people?
Speaker 1 00:10:40 Are we trying to improve retention? Are we trying to improve skills in a particular business area? Are we trying to improve performance in sales and manufacturing without thinking about the core problem we're trying to solve? We can't get to root causes and we can't necessarily develop the right solution. Now, the next thing I wanna say about Elon is because he is a bit of an abrupt leader and he is a scientist and an engineer at heart, he seems to loathe bureaucracy. My sense, of course, he can't manage everything going on in all of his companies, but my sense is that he's very involved in eliminating middle layers. One of the points he makes is something that I firmly agree is that if you are in charge of a product or an offering or a solution, and you know, that happens a lot in hr, you own it from beginning to end, you own the design of it, you own the implementation of it, you own the tools that are surrounding it.
Speaker 1 00:11:37 You own where it works, you own where it doesn't work. You own the roadmap of what happens next. You own understanding the return on investment of it and where it is and isn't performing as you want it. And you own the business case for whether it should be bigger, smaller, stopped, or, or made bigger. For example, one of the things Elon talks about, and I have a very good relative actually who works there, is that in companies like Tesla, a product manager who's responsible for a component doesn't just design it or engineer it. He or she works with design with engineering and goes into the plant and works with manufacturing to figure out how to make it and work on the supply chain providers to make sure that the suppliers that are supporting the tools and pieces that are making up that product are actually the right suppliers.
Speaker 1 00:12:32 So in some sense, the product manager or the engineer, he actually thinks engineers should be running these things, not product people owns the whole thing from beginning to end. And that is an example of eliminating reducing bureaucracy. Now we have lots and lots of research on hierarchical organizations and functional organizations, and of course the reason we have all these different functions, sales, manufacturing, design and so forth, is because they're all specialized, they're all different. And no one person can be an expert on all of those things. But on the other hand, as Elon says, if you are going to innovate and outpace your competitors, you need to look at the whole picture. You can't just delegate stuff to the other side of the transom and say, well, you know, I designed a really good thing. It's too bad they couldn't figure out how to manufacture it, or It's too bad, the service guys just kind of messed up in the field, right?
Speaker 1 00:13:24 So he's very big on breaking those things down. And I think that's a lesson that Amazon has come to draw on their accountability model and many other companies as you build, uh, agile work teams. Next thing I wanna talk about is mobility and dynamic organizations. We are finishing a whole bunch of stuff that's gonna come out in late October on the post-industrial age dynamic organizations, our irresistible leadership research and our research on systemic hr. And these things are gonna roll out in the last quarter of the year. And what they all come together with lots and lots of interesting findings, but what they basically point out is that if your organization itself is blocking these cross discipline, cross-functional conversations and ownership and relationships, you are going to pay the price you are going to fall behind, you are going to underperform. And that is not an easy problem to fix, but he seems to be able to fix it through sheer force of will and personality.
Speaker 1 00:14:29 And of course, the fact that he is the wealthiest man in the world and he can kind of do whatever he wants. Last thing I wanna say about Elon Musk is this issue of his role in society. And does that matter? Is that relevant as a business leader? And should he be evaluated or not in that way? I think, you know, it's a very complicated question, but let's take a step back for a minute and just think for a minute, what is the role of your business or any business in our society? And the answer to me is it's a big role. It's an important role. Societies are consist of many things. We have arts and humanities, music, entertainment. We have politics and governance, and people that manage our streets and our services and our education. Those are all important parts of society. There's religion and culture and a sense of spirit and meaning and purpose and all the parts of the society that give us, you know, a reason to get up in the morning and and become who we are.
Speaker 1 00:15:30 And then there's business. And really the reason business exists is not because somebody invented it, it's because human beings want to add value during their days. They wanna do things to help others, they wanna get paid for it or rewarded for it. And at some point in time, they wanna be richly rewarded for it. And so we've built this capitalistic system, at least in the United States and a lot of countries that allows and rewards business for innovation, creativity, product services, and really improving our lives. So the role that business plays in this complex tapestry is that of solving problems. I mean, I firmly believe that the reason business is so fascinating and so interesting is it is the ultimate place to solve problems. If you're crafty enough and smart enough and perhaps lucky enough to come up with a good idea, hire the right people, get some capital, and execute well, you will solve a lot of problems for a lot of people.
Speaker 1 00:16:27 You will be richly rewarded for that in many ways, and you will, you know, be able to look back at the end of your life and say, wow, you know, I really added a lot of value to a bunch of employees and also to a bunch of customers and stakeholders and members of society. Which leads me to the, the issue of a c e o of a company, which is basically what Elon is, is he's not a political, nobody elected him to be who he is, has those roles. And I believe that under, you know, the covers of his personality, he honestly is trying to make the world a better place. He believes we should be a multi-planetary species. He believes we should deal with global warming and energy supply. And he believes that ai, for example, should be tamed and harnessed in a rational and protected way.
Speaker 1 00:17:12 So when I hear these stories about whether he's a good person or a bad person, good society for bad society, I try to answer them in that context. Every c e o, every business leader, every one of you guys that listens to this, has some level of authority and autonomy, just like he does. Your participation and support of your company should be helping society in some way, companies that don't help society and tend to skirt the rules. By the way, there's a big story this week about Exxon and about Exxon has been quietly hiding all of their detailed information on global warming for decades. You're gonna pay the price. Not only are you going to be damaged as a brand, the government might get involved, but you're not gonna wake up the next morning feeling good about yourself. And you know, there's examples every day of people that do this, Enron, Sam Bank Friedman, et cetera.
Speaker 1 00:18:06 And I, I think Elon, from what we can observe is trying to figure this out himself. And I, I give him credit certainly from afar for grappling with the issues because he is trying to build mission-driven organizations and, and he does understand and belief that the best way to do that is through the business side of the economy. He could just as assume by the way, being as smart as he is, he could go into politics, he could do other things that just is not the way he's wired. So this idea of your role as a business person, as an HR person, as a technology person, as a citizen of the world is in a sense the dilemma that we see going on in his mind. Now, I'm sure a lot of you have opinions about him. I think it's hard not to. You may or may not like his personality.
Speaker 1 00:18:59 You may or may not like his politics. You may or may not lie to his behavior, but I encourage you to read the book. I walked away from the book much more sympathetic and much better understanding what type of a human being is and actually admiring him much, much more than I did before. And there are lessons to be learned. And I simply suggest you think about these issues in your own career and your company. Uh, it isn't often that we have a role model or a figure in the society that is so big. Jack Welch was sort of like this when he was running ge. Uh, Howard Schultz was a bit like this when he was rowing. Starbucks. Uh, you all have other people that you emulate. I emulate many of you, actually many of the people who I serve as clients, I, I emulate them. But, but I think given that Elon has such an important role in society, it's worth discussing the lessons we're learning from him and seeing how they apply in our own organizations. I know this podcast wasn't the typical one, but I just felt, given what's been going on this week, it would be good to just chat about these issues. I always want to hear from you guys if you have comments and feedback and, uh, hope this was an interesting way to spend your weekend. Thanks a lot.
