Elon Musk's Leadership Style: Strengths and Weaknesses

Introduction: Why Elon Musk as a Leadership Subject

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 into 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 a visionary (Yauney, 2018) and a charismatic personality who connects with fans and consumers and understands 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 the inherent risks they present.

Musk's Innovative Leadership at Tesla

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 his 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 pressing problems (Sen & Eren, 2012). Through value-added innovation — which focuses on building onto ideas and solutions that already exist (Hong, Hou, Zhu & Marinova, 2018) — Musk has been able to provide innovative leadership by enhancing the auto industry with the introduction of the luxury EV, something that had not yet been offered in the market.

As an innovative leader, Musk has helped create a new market for the EV in the United States. Before Tesla, the EV market was unremarkable, but Musk has helped make it the next major development for auto engineers. One of the significant problems he is facing, however, is that the infrastructure for EVs is lacking and the technology has not proven as efficient as he hoped (DeBord, 2018). Musk had promoted Tesla not just for its cars but for the claim that it would revolutionize the factory process using state-of-the-art robotic technology — and yet, after years of failing to meet production quotas, Musk finally admitted that he had been relying too heavily on machines and not using people enough in the process.

This is one example of where Musk failed in leadership: he relied too heavily on innovative theory without putting sufficient research into the practical aspects of running a technology-and-car company. Instead of depending too much on technological solutions to create a new working environment, Musk should have focused on learning the actual, practical steps of how a traditional factory operates and built on those by adding value — as he did with the luxury EV. Instead, he went overboard with innovation in factory design and did not fully appreciate that having new robots does not automatically mean one can build a better car (DeBord, 2018). As a result, Musk had to construct a separate tent factory to keep the production line moving — a facility that resembles nothing close to state-of-the-art, and is in fact more primitive than innovative. The reality, however, is that this tent factory was a step in the right direction, because what Musk's leadership needed at that stage was a bit more pragmatism and a little less creativity.

Charismatic Leadership: Strengths and Excesses

Musk has also excelled as a charismatic leader. His ability to sell an idea and a vision to the public — namely, sustainability — by integrating that concept with style, luxury, and affordability (embodied in the Model 3) has helped Tesla become one of the most sought-after companies among investors and consumers alike. Using charm and persuasiveness, Musk took Tesla from a $10 stock to a $340 stock, thanks to his deft use of Twitter, other social media platforms, media interviews, and his ability to craft a celebrity-like persona for himself as a kind of real-life Tony Stark: a genius billionaire who wants to save the planet while making a great car for everyday people.

The problem with charismatic leadership, however, is that it depends too heavily on a single person, and this can cause serious problems when that person makes mistakes driven by excessive zeal for his vision. Musk makes this mistake repeatedly: he is constantly making ambitious promises that he fails to deliver on, and this hurts both his personal reputation and that of the company. Musk has to be more careful about how he presents himself publicly and should reduce his reliance on social media now that the brand has been established. The damage he has already done is considerable — first by tweeting that he intended to take the company private when this was unfounded, and then by admitting he did not have funding secured for such a move (Wolverton, 2018). He then turned to social media to try to recover his image and appeared on the Joe Rogan podcast, where he openly smoked marijuana with the host. This behavior is deeply concerning for a CEO of a Fortune 500 company and does not inspire confidence among investors.

Conclusion

Tesla is already a highly innovative company. Now it is time to be practical, which means it is time for a new leadership approach. In any situation, a leader should have several leadership models available so that he or she can select the most appropriate one. Musk must recognize that charismatic leadership is currently causing more problems than it solves — creating legal trouble and eroding investor confidence. There is no longer a need to keep selling an idea about who he is and what the company can do. The company must now focus on producing, and for that to happen, its leader must step back and allow those who can manage other aspects of the organization to 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.

Sen, 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.