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Leadership Matters! Elon Musk is widely regarded as one of the most suc- Musk eventually conceded that his idea for fully cessful entrepreneurs in history, 130 He became a bil- automated production of the Model 3 was a non- lionaire by age 31 after founding and selling several starter, and he and his workers scrambled to get pro- successful start-ups-most notably the company that duction back on track by working 80-100 hour would later be known as Paypal. In 2004 Musk weeks. 137 Customers waited months past delivery invested $6.3 million into Tesla Motors and soon after dates for their vehicles and took social media to became the company's CEO.131 lambast the company. Further, many of the Model 3s Musk has a keen ability to express ideas and get that were delivered needed costly and time-consuming people excited about them and has garnered praise repairs.138 Musk would later refer to the ordeal as for his inspiring and visionary leadership.132 Author "production hell."139 Dale Buss argues that ... a huge part of Musk's motiva- Some blame Musk's inability to delegate for Tesla's tional quiver is to come up with and continually express problems and for the recent exodus of more than other-worldly goals that appeal to the passions of his 36 VPs and other high-ranking executives. 140 Musk employees as well as to his own ambitions."133 Todd wants things done his way down to the tiniest detail Maron, Tesla's former general counsel, said Musk is and often rejects industry best practices along with "someone who empowers you to be better than you advice from his senior leadership. For example, Musk think you can be," adding that he has extraordinarily once instituted a new workflow management method high standards, and so he pushes you to be your abso- against the advice of his production workers. The lute best." Another former employee described Musk employees secretly reverted to Toyota's Kanban as "the smartest person I have ever met," adding, "I method when Musk's technique ultimately slowed pro- can't tell you how many times I prepared a report for duction.141 Author Barry Enderwick believes Musk's him and he asked a question that made us realize we micromanaging style "...displays a fundamental misun- were looking at the problem completely wrong. "134 derstanding of what leadership means. No one person can do everything at a company."142 Others blame Musk's mental health for his down- MUSK'S LEADERSHIP STYLE ward spiral and describe him as emotionally unstable AND BEHAVIOR and fragile. Musk developed a reputation on the pro- Some have criticized Musk's aspirations to change the duction floor for openly ridiculing, insulting, and bully- world as outlandish and his ideas as unachievable, but ing workers who fell short of performance targets. He Musk doesn't believe in impossibilities. Says author appeared extremely sensitive to skeptics, often reas- Christopher Davenport, People are always telling him signing workers who questioned ideas to new he can't do it. But he doesn't like to hear it can't be departments, uninviting them to important meetings, done. He categorically rejects that. It's all about, "How and even firing them. Musk also displayed frequent can we do it?'"135 A recent example of Musk's stub- emotional reactions to isolated customer complaints bornness is the production of the Model 3. After the on social media. As a former employee recalls, "Some company revealed the concept to the public and customer would tweet some random complaint, and locked in production dates, Musk called a meeting to then we would be ordered to drop everything and tell executives he had a dream that the entire produc- spend a week on some problem affecting one loud- tion process had been fully automated. In other words, mouth in Pasadena, rather than all the work we're sup- vehicle production would require no humans from start posed to do to support the thousands of customers to finish. He wanted to make the dream a reality, he who didn't tweet that day."143 wanted to do it with the Model 3, and he wanted to Musk's recent public appearances and social media begin production four months ahead of Tesla's original posts have raised consumer concerns about his ability schedule. What followed were several months of what to deliver on his promises and successfully run his former executives and employees describe as a famil- companies. In one instance, he angrily tweeted that a iar pattern: executives told Musk his idea wasn't diver sent to rescue a trapped Thai boys' soccer team achievable, he disagreed, and engineers resigned was a pedophile after Musk's offer to assist with the res- cue was declined. The diver filed a defamation lawsuit when they realized they couldn't reason with him.136 against Musk for this damaging and unsubstantiated claim.144 As another example, Musk chose to smoke marijuana during an appearance on "The Joe Rogan Experience" podcast.145 in August 2018, in what would prove the most financially damaging of his social media choices to date, Musk tweeted that he was tak- ing Tesla private and had secured the funding to do so. As a result of his tweet, the company's shares skyrock- eted 11 percent in one day. Musk had not actually secured funding to take Tesla private and the SEC charged him with securities fraud. He settled the case and agreed to pay a $40 million fine to the SEC, step down as Tesla's chairperson, and allow others in the company to regulate his social media activity. A few months after reaching the settlement, Musk gave a 60 Minutes interview and said "I do not respect the SEC." While it is not illegal for Musk to criticize the regu- latory agency, experts agree it's an unwise choice, both in terms of his relationship with the agency and his abil- ity to attract board members to his companies. 147 146 WHAT'S NEXT FOR ELON MUSK? Musk's quirkiness, overconfidence, and volatility resemble the attributes and behaviors of other famous entrepreneurs-most notably, Steve Jobs.1 148 As con- sumers we allow for and even expect a certain amount of idiosyncrasy in our leaders. Yale School of Manage- ment's Dr. Jeffrey Sonnenfeld argues that some mea- sure of hubris is necessary for entrepreneurs to succeed, saying, The odds are against them succeed- ing rationally, so they have to have an unrealistic sense of their own efficacy to beat the odds." But Sonnenfeld also notes that Musk is likely to "take himself and the company off a cliff if he doesn't dial things back. 149 Tesla recently unveiled its new electric vehicle-the Model Y crossover-to lukewarm reception. Pre-orders started immediately and required a $2,500 initial payment-$1,000 more than the company had charged customers to reserve the Model 3. Market analysts see this increase as cause for concern about the company's cash position and predict that initial orders for the Model Y will be much lower than they were for the Model 3.1 As for that tweet that cost him $40 million in SEC fines and his position as chairman of Tesla's board, Musk says it was "worth it."151 150