solution

Teaming up at Tesla

Teams play a vital role in ensuring that Tesla’s ambitious goals are met. Specifically, CEO Elon Musk

believes that teams need to be agile in order to meet and exceed expectations.1 In other words, they

need to include a cross-functional slice of the company (team members from various departments

within the organization) and be provided with everything necessary to manage themselves and

produce results.2

So how do you develop a successful team that can manage itself and meet expectations? It starts

with team member selection. Yes, Tesla believes in hiring competent individuals, but its main

recruiting criterion is passion. According to Hubgets, Tesla wants to know if potential team members

have the passion to work 16 hours a day if necessary, are motivated by the “stuff” the company is

working on, and are even ready to colonize Mars.3 There is a significant issue with this expectation,

however: Musk’s key metric to measure passion is his own passion.

Employees are expected to give their utmost and beyond. For example, if teams don’t emulate the

work habits of Musk and other senior leaders, there may be consequences, especially when

workforce reduction decisions are made.4

Tesla also believes that high-performing teams need to have a high level of trust among members.

For example, Musk encourages team members to breach the chain of command and take questions

or concerns straight to the right person in the organization. In fact, Tesla provides an email address

that anyone can use to send ideas and concerns straight to top management.5 This system was

tested in March 2014 after a design team discovered design flaws, including a “rat hole,” which was a

gap in the roof of the Model S. Cristina Balan, an engineer on the team, wanted to go straight to

Musk with her concerns about this significant defect. However, she was allegedly silenced by the

head of the design team, and pushed out of the company, according to Business Insider. Ultimately,

Tesla stuffed a piece of Styrofoam in the gap of the $100,000 car to “fix” it.6

Brakes Are for Cars, Not Decision Making

Tesla may want its teams to be self-managed in order to produce results, but it’s clear that all final

decisions rest with Musk. The CEO makes the call on how many cars will be produced, and it’s up to

the company to deliver on those promises, which often doesn’t happen. CNBC conducted interviews

with 35 current and former Tesla employees, who described an ambitious CEO who micromanaged

employees and refused to consider evidence-based methods pioneered by other carmakers.7 Some

of Musk’s decision-making methods can be attributed to his admitted hubris.8 This confidence in his

own decision-making ability often causes him to stick to an incorrect decision for far too long. An

example of this was Tesla’s overreliance on automation in the manufacturing process, which

Japanese competitors had already figured out.9 In fact, automotive experts say that Tesla made

some of the same automation-related mistakes that General Motors made back in the 1980s.10

Furthermore, some employees mentioned that Musk even ignored advice from industry veterans

who worked for Tesla.11 Jeffrey Sonnenfeld, a leadership expert, argues that Musk’s entrepreneurial

self-assurance has powered his more daring pursuits, but he needs to rein in his hubris in the next

phase of Tesla’s development. If he doesn’t, Sonnenfeld warns, Musk is likely to “take himself and the

company off a cliff.”12

Not everyone thinks Musk’s action-oriented decision-making style is a problem. Spencer Gore, CEO

of Impossible Aerospace and a former Musk employee, says, “Elon Musk is in a position most will

never experience—trying to deliver an industry-defining product on a limited budget. He can’t afford

to make decisions slowly, or even always compassionately. When he involves himself in low-level

details it’s to enhance execution speed. For some engineers, this can be frustrating, at times

heartbreaking—but Elon’s unconventional style is what built the Tesla we all chose to join.”13 Musk

himself believes that rapid decision making is necessary in his line of business. “It is better to make

many decisions per unit time with a slightly higher error rate, than few with a slightly lower error rate

… because obviously one of your future right decisions can be to reverse an earlier wrong one …,” he

told The Wall Street Journal.14

Musk may believe that a later decision can quickly reverse an incorrect earlier one, but his inability to

delegate decision making means incorrect decisions may not be reversed in time. Moreover,

opinionated leaders like Musk often fear changing course once they’ve expressed an opinion for fear

of appearing weak, according to Fast Company.15 Since 2016, more than 50 senior executives have

left Tesla, many because of Musk’s hands-on management style. As a result, Musk believes he needs

to be even more involved in company decision making, even if it means embedding himself with line

workers.16 Rick Wartzman, a management expert, details the danger of this approach, saying, “When

people’s autonomy in the workplace is sharply curtailed, they feel as if they’ve lost control—and, in

turn, their brains react as if they’re being threatened. That raises their level of stress, which often

causes them to perform poorly.”17

Fellow billionaire Richard Branson, founder of the Virgin Group, has a solution for Musk, saying, “I

think he maybe needs to learn the art of delegation.”18

Musk, an Unorthodox Communicator

Controversial or not, Musk is a powerful speaker. His strength stems from three essential techniques:

frequency, tense, and tone. According to Inc., the automaker CEO tweets at least once a day, uses

the present tense when speaking to excite the listener, and converts complex concepts into easy to

understand language.19 In fact, Musk uses the present tense four times as much as the average

communicator in order to make “listeners think the future is a very real thing that’s already starting to

happen,” according to Noah Zandan, a communications expert. Zandan and his team reviewed 40

transcripts of Musk’s speeches, including every Tesla earnings call. Based on this review, Zandan

believes that Musk is “… a visionary communicator” who uses persuasion and action-oriented

language.20

For all its inspirational qualities, Musk’s communications strategy has also proven to be costly for

Tesla and himself. As mentioned previously, Musk’s August 2018 tweet, falsely stating that he was

considering taking Tesla private, may turn out to be the most expensive message ever (it cost him

and the company a cool $40 million).21 Musk’s use of social media has also earned him a defamation

lawsuit.22 Corporate communications expert Paul Argenti said of Musk’s erratic tweets that, “At some

point somebody, like an adult, has to come in and say, ‘Mr. Musk, you need to be more careful about

your communications.’”23 Tesla investors seem to agree with Argenti as the company’s stock

increased 4 percent after Musk stated he was deleting his Twitter account (he ultimately did not).24

Tesla employees are not provided with the same online liberties as Musk. In a 2019 letter to

employees, Tesla warned its workforce that sharing anything deemed confidential by the

organization could lead to termination and/or criminal charges.25 Musk sees his ability to

communicate with stakeholders as superior to others though. For example, while negotiating with the

Securities and Exchange Commission (SEC), Musk’s lawyers argued that his “… ability to engage with

customers about Tesla products is critical to Tesla’s success, and that Musk would not agree to broad

pre-approval of Tesla-related statements.”26

Controversial Leadership

Musk’s ambition is a double-edged sword. He’s able to inspire others by being accessible and having

a high level of energy. More importantly, he wants to save the world, and who’s against that?

Musk’s employees are following him, for the most part. In fact, a 2019 survey conducted by a

workplace social network found that 77 percent of Tesla and SpaceX (another one of Musk’s

ventures) employees are confident in his leadership and believe in his vision.27 For example, Jim

Cantrell, SpaceX’s first engineer, says that Musk is “… pure ambition. He’s three or four steps ahead.

… Most of us can’t conceive these things working; he can’t conceive it failing. Period.”28 Musk

understands the transformational power of believing in success, and how contagious it can be. “The

value of inspiration is very much underrated,” he said at a 2017 TED Conference.29 Inspirationalist or

not, there is a darker side to Musk’s ambition. An academic study found that the Tesla CEO has

exhibited the following characteristics:

• He feels bigger than his company
• He is not accountable to his board of directors
• He does not favor chief financial officers who ask too many questions
• He had made promises he cannot keep and posted misleading information30

When you merge these dangerous tendencies with Musk’s inability to delegate, or at least deliberate

with members of his team on important moves, you begin to uncover some of the leadership

challenges the company is facing.31

Apply the 3-Step Problem Solving Approach to OB

Step 3: What are your recommendations for solving the problem?

Consider whether you want to resolve it, solve it, or dissolve it. Which recommendation is desirable
and feasible?

Given the causes identified in Step 2, what are your best recommendations? Use material in the
chapter associated with the particular cause. Don’t forget to consider the Example and Applying OB
boxes, as these contain insights into how other individuals and organizations have effectively applied
OB knowledge and tools.

Be sure to consider the Organizing Framework—both person and situation factors, as well as
processes at different levels.

Create an action plan for implementing your recommendations.

(under the steps are part of the question please answer all three parts and also please no answers related to Suvillian, because I keep receiving answers related to that question)