Elon Musk's Leadership Style

Question 1
Elon Musk is the CEO of Tesla and has been leading the company for the past decade. Musk has been credited with leading Tesla out of the niche electric vehicle (EV) market and into the mainstream global market, with plans to expand in China. Touted as the only wholly-American-made car, Tesla is admired by a great many fans who view the EV as the next revolution in auto engineering. Musk is hailed by admirers as being a visionary (Yauney, 2018) and a charismatic personality who connects with fans and consumers and “gets” what they are thinking and wanting. I have selected Elon Musk because as a leader I admire his ability to capture people’s attention, build a brand, and create enthusiasm for the company. However, I also see several problems with Musk’s leadership style, such as poor impulse control (Wolverton, 2018) and over-promising and under-delivering (DeBord, 2018), and I would like to analyze those more closely to better understand some of these inherent risks.
Question 2
Musk has been described as “(1) a proactive learner, (2) a hard worker, (3) a bold visionary, and (4) an unwavering optimist” (Yauney, 2018). He has been hailed for corporate social responsibility and focus on sustainability to help ensure that future generations can enjoy the planet: “Musk actively works on addressing the heavy toll we have thus far taken on our environment and on finding a solution for our ever-growing human population” (Marques, 2017). Musk is praised for responding to the needs of today’s society by engaging minds with an innovative leadership style, which allows leaders to find creative solutions to problems that have to be addressed (Sen & Eren, 2012). Through value-added innovation, which focuses on adding onto ideas and solutions that already exist (Hong, Hou, Zhu & Marinova, 2018), Elon Musk has been able to provide value-added innovation leadership. His method was to enhance the auto industry by introducing the luxury EV, something that had yet been provided in the market.
As an innovative leader, Musk has helped to create a new market for the EV in the U.S. Before Tesla, the EV market was nothing special, but Musk has helped to make this market the next big thing for auto engineers. One of the big problems that Musk is facing, however, is that the infrastructure for EVs is lacking and the technology is not as efficient as he hoped (DeBord, 2018). Musk had promoted Tesla not just for its cars but for the fact that it was going to revolutionize the factory process using state of the art robot technology—and yet after years of failing to meet quotas, Musk finally admitted that he was relying too heavily on machines and not using people enough in the process. This is one example of where Musk failed in leadership because he relied too heavily on innovative theory and did not put enough research into the practical aspects of leading a tech-car firm. Instead of relying too much on technological solutions to create a new working environment, Musk should have been focusing on learning the actual practical steps of how to make a traditional factory and building on these by adding value to them as he did with the luxury EV. Instead, Musk really went overboard with the innovation in factory design and did not comprehend that just because one has new robots does not mean one can build a better car (DeBord, 2018). Thus, Musk has had to build a separate tent factory to help get the production line moving and the tent factory does not resemble a state of the art anything but is rather more primitive than innovative. The reality is, however, that this tent factory was a step in the right direction because for Musk his leadership needed a bit more reality and a little less creativity.
Musk has also excelled as a charismatic leader: his ability to sell an idea and vision to the public—namely, sustainability—by integrating the concept with style, luxury and affordability (the Model 3) has helped his company to become one of the most sought after companies among investors and consumers. Using charm and persuasiveness, Musk has taken Tesla from a $10 stock to a $340 stock, thanks to his deft use of Twitter, other social media, interviews, and his ability to craft a celebrity-like status for himself as a kind of real-life Tony Stark genius billionaire, who wants to save the planet and make a nice car for people at the same time.
The problem with the charismatic concept of leadership is that it depends too much on one person leading and this can cause problems especially when the leader makes mistakes through excessive zeal for his vision. Musk makes this mistake all the time: he is constantly making big promises yet failing to deliver, and this hurts both his and the company’s reputation. Musk has to be more careful about how he leads, and he should not be using social media so much now that the brand has been developed. Musk has done too much damage already—first by tweeting out that he would take the company private even though this was unfounded and then by admitting he did not have funding secured for such a deal (Wolverton, 2018). Musk then went on social media to try to save face and appeared on the Joe Rogan podcast where he openly smoked marijuana with the host. This is all disconcerting behavior for a CEO of a Fortune 500 company and does not give investors a great deal of confidence.
Musk has also gotten into legal trouble after attempting to make a joke about a rescuer of children in a cave in Asia. The cave flooded and children became trapped and Musk wanted to help save them so he designed a rescue sub that would get into the caves and get the children out. When he took his concept to the caves to be used, he was turned down and he expressed his frustration on Twitter, which was not the best place to do so because it is a public format where everyone can see what one is thinking or saying. Musk referred to the rescuer on the scene as a “pedo” and the rescuer in turn has sued Musk. When a CEO shows that he cannot control his own tongue and makes unfounded claims, it does serious damage to the brand of the company the CEO is tasked with leading.
Thus, by integrating the innovative concept of leadership with the charismatic concept of leadership, Musk has been able to give himself and his company an edge in a market that is ripe for redeveloping. However, he has gotten carried away with his own ideas and excitement at times, which has caused the stock to drop (though it has bounced back on more than one occasion). Still, Musk has found himself in hot water with the SEC for his tweets (Wolverton, 2018) and his innovative solutions have not worked out to be the best (DeBord, 2018), which suggests it may be time for Musk to try a new style or theory of leadership.
Question 3
The new concept that Musk should try focusing on is servant leadership. Servant leadership has helped other leaders succeed over the years, including Virgin Group CEO Richard Branson (Gallo, 2013). Servant leadership is about putting people before profits and the idea is that by putting people first it allows for a leader to focus on installing the right people in the right positions and then getting out of the way to let them do their jobs as they know best how to do them. It is about giving those individuals everything they need to succeed and supporting the workers so that they have all they require to meet objectives. Musk should try this concept as he has been focusing too much on innovation leadership and charismatic leadership—but neither of these are helping to improve the bottom line. They are good for appealing to investors and building the brand, but now practical approaches have to be considered, and servant leadership would enable Musk to start putting in people who have the ability to know what is needed in every situation. By getting out of the way and letting his workers who have experience in factory work focus on fixing the problems in the assembly line, Musk would be acting like a servant leader. He could make sure they have all they require instead of insisting on trying out one of his new innovative concepts.
Tesla is already highly innovative. Now it is a time to be practical, which means it is time for a new leadership concept. In any situation there should be several leadership options available to a leader so that he can choose the best one. Musk has to realize that charismatic leadership is only getting him in trouble with the law and with investors at this point. There is no need to keep trying to sell an idea about who he is and what the company can do. Now the company simply has to focus on producing and for that to happen, the company’s leader has to step back and let those who can manage the other aspects of the company do so on their own terms.
References
DeBord, M. (2018). Elon Musk promised a Tesla alien dreadnought factory—but what
we got was a tent. Retrieved from https://www.businessinsider.com/tesla-is-failing-to-build-the-factory-of-the-future-2018-6
Gallo, C. (2013). How Southwest and Virgin America Win by Putting People Before
Profit. Retrieved from http://www.forbes.com/sites/carminegallo/2013/09/10/how-southwest-and-virgin-america-win-by-putting-people-before-profit/
Marques, J. (2017). A Mindful Moral Compass for Twenty-First Century Leadership:
The Noble Eightfold Path. The Journal of Values-Based Leadership, 10(1), 7.
?en, A., & Eren, E. (2012). Innovative leadership for the twenty-first century. Procedia-
Social and Behavioral Sciences, 41, 1-14.
Wolverton, T. (2018). Elon Musk says he was thinking like a Vegas casino owner.
Retrieved from https://www.businessinsider.com/tesla-ceo-elon-musk-funding-secured-tweet-vegas-odds-2018-8
Yauney, R. H. (2018). Leadership Development: A Study of Elon Musk. Marriott
Student Review, 2(2), 4.