Course: 16939 BUSN 1210 – 008

Individual Assignment: New Manager – Best Practices for the 21st Century
One of the most influential management experts in the last 10 years that has seen his
popularity and celebrity grow just as much as his business has to be the infamous Elon
Musk. From Flamethrowers to launching a Tesla Roadster into space, he is never one
to shy away from a challenge and to make a splash wherever he goes. Elon Musk was
born in South Africa, but by age 17 he moved to Canada where his mom was born and
got his Canadian citizenship. From there he attended Queens University, then
transferred to University of Pennsylvania where he received his bachelor’s degree in
Economics and Physics. He was planning on going to Stanford after that but instead
decided to pursue a career in business, and just like that Musk with his brother created
their first company named ZIP2, a software company eventually selling that for $307
Million in 1999, and then starting X.com which joined with Confinity to form PayPal. By
age 31 he had already started or created 3 companies, and really that is when he was
just getting started. I think for any successful management expert, it is one thing to go to
school and study techniques like in this class, but the truth is to have your feet on the
ground, in the mud, in the dirt, and really getting companies off the ground, you must
have some type of people person skills.
In 2002 he sold PayPal for a staggering 1.5 billon, which would set up anyone up for
life, but you have to respect a guy who saw a bigger vision for humankind, and with a
little bit of money in the bank, he started SpaceX, an aerospace company and space
transport service, in 2004 he joined Tesla and by 2008 was the CEO and majority
shareholder of the company. In 2006 he created Solar City, a solar energy company,
and in 2015 Co-Founded Open AI, which promotes friendly Artificial Intelligence,
whatever that means, and in 2016 created Neural ink, a neurological technology
company focusing on brain computer interfaces, and later that same year started The
Boring Company, a Tunnel construction company. Finally, just a few months ago
decided that he would acquire Twitter, the massive social media company for a cool $44
Billon.
What does all this mean? It means that Elon Musk more than anything has real-world
real-life experience managing some of the biggest and most recognizable companies on
earth, sometimes all at the same time. He was not born with natural management
expertise skills as nobody is just born with skills, but they are acquired through hard
work and experience, and through time you get better at your craft and that has made
him one of the best Management Experts in the world. But that does not make him
immortal, as he still has challenges and headaches that he has to figure out. My goal is
to show you these management issues that came up while creating these companies
and show why Elon is the best in the business.
Elon is no stranger to management issues, when you are disrupting as many industries
as him, you abound to ruffle up a few feathers along the way. To start let us define what
management issue means. Websters defines this as any matter requiring action,
investigation, and or decision by the company but not limited to induction procedure,
performance, benefits, complaints, and discipline.
The first management issue that can plague a company is communication. When
running a startup or a top 100 company, communications is always key. Have you ever
worked at a place and felt that there was no communication, and everybody was
running around in the dark? That will not get you very far in business and Elon knows
that. But how do you get everybody on the same page and let them know your
expectations. Obviously after running a few companies, he has some experience but
how Elon communicates is firm and commanding to energize his employees. He is not
mean, but he is a visionary that knows what he wants and expects a certain level of
efficiency and productivity to take place. But he knows that from the top to the bottom
everybody should have a voice and to share what works and what does not. A great
example of this is a certified email from Elon back in 2017 that employees are allowed
to email to higher managers directly without getting permission from direct managers.
This is a rarity among workplaces because they chance systems in place to avoid
getting emails from bottom, but Elon is encouraging emails. If everybody in the
company has a voice, it will make you a better company. If people feel heard, it will
make you a better company. Elon wants to hear what you have to say, since some of
the smartest people in the world work at his companies and a smart boss does not tell
employees what to do, yet the other way around of tell me how we can be more
successful.
I can see how Elon Musk creates lasting effectiveness through communication, his
solutions are clearly seen in the importance of managing responsibly. Elon Musk runs
the organization in a sustainable way by empowering employees to communicate with
leadership more effectively. He understands the difficulties and limitations when solving
employee problems and effective solutions are given to solve the problem and towards
the common goal of the organization.
Another Management issue that leaders tend to discover is performance problems. In
order to be a successful company, you must be constantly achieving a certain level of
efficiency and productivity day in and day out. Working for an Elon Musk company he
has the highest of expectations when it comes to business model, and he also knows
when he has to make hard decisions. One measuring stick is performance reviews, and
back in 2017 Tesla laid off 400-700 employees due to poor performance reviews. The
realty is Tesla is a super company when it comes to who they hire. And if you’re not
performing, Elon has no problem letting you go. Tesla is going through “ Production
Hell” to meet their goals, and if you’re not holding up your end of the deal when they
offered you a job, you are replaceable, which sounds rude but at the end of the day this
is a business not a charity, and part of being a great management expert is knowing
what you need to do get the most from your employees while providing the best quality
product. It's not the most glamorous part of running a company but keeping employees
who aren’t the best is not something Elon has time for, which is savage, but you can’t
have “Soft” at the top if you want to be successful.
Now it’s one thing fire employees, that’s part of the game, but in this highly ultra-
competitive business, you might end up with really smart and competent employees but
this problem this time is managing bad situations that if not address can really hurt
morale and productivity. Since Elon hire’s lots of smart alpha type people, you will have
lots of employees who think they know what is best, and now in teams you might have
people getting into conflicts because they all think they are correct. So how does Elon
manage bad situations within a company? First off as CEO he realizes this is not the
end game. Just because you climbed the corporate ladder, accomplished your goals
and now you are sitting at the top, does not mean it’s all good now, and as CEO Elon
knows he needs to be where the biggest problems are. In a recent Q3 earnings call,
Musk said ““I always move my desk to wherever--I don't really have a desk actually--I
move myself to wherever the biggest problem is in Tesla,"
For the CEO to not even have a desk I think speaks volumes about how he manages.
As CEO you trying to put out the biggest fires, and it’s quite difficult if you’re not heading
to the fires and staying in your comfy chair. Bad situations arise all the time and you
need to get your hands dirty and spending time where time needs to be spent.
Through the personnel management of Elon Musk, we can see that he has an
omnipotent view of management. He will reward those who do a good job and will fire
those who do not do a good job. Elon Musk creates strong cultures where all employees
are aware that they must focus on their work to create good products and grow the
company. The Omnipotent View, chapter 2, 36 and What Is Organizational Culture?
chapter 2, 38-41
The next issue that arises is times of turbulence in a company and as a leader how do
you calmy manage the rough waters and keep the ship on course. Elon Musk is no
stranger to these very real problems, especially when you are setting goals that might
seem insane but as the visionary, that what it sometimes is, and you must keep going.
In 2018 Tesla was hoping to produce 5,000 new model 3 electric cars each week, but
the realty was half of that. And you have to appreciate the self-awareness of Elon in
saying “excessive automation was a mistake” and that “humans are underrated”. So, he
acknowledged he made a mistake and then praises he employees, easier said than
done when your CEO. Also as I have mentioned in the beginning Elon started or CEO
of multiple companies, one of those being SpaceX, in which he invested over $100
Million of his own money to get the company started, which is one thing to get
investments and funding, it’s an entirely different ballgame when you are investing your
own money, which I think does make a difference in how he runs his companies
because he doesn’t just talk the talk but he walks the walk, and as an employee you
have to admire what he is doing. But just because you throw $100 million at something
doesn’t make it successful, it’s just like giving incompetent politicians more money,
there still incompetent no matter how much money you throw at them. SpaceX
experienced a steep learning curve with his rockets with the first three blowing up.
Imagine being an employee and you have failed for 18 straight months; it takes a
certain somebody to keep everything on track. In the Netflix documentary about Elon
and his company getting back to Space, employees mention how after the 3 rd launch
that failed, they didn’t know if they would have a job. But instead firing he inspired them
and told everybody to keep building a rocket. They were in shock because they thought
it was over, but he believed in them, and truthfully needed this 4 th rocket to work, or else
is was game over. Luckily through hard work and perseverance and having some of the
smartest people in the world working on this, it did, and soon after that NASA awarded
SpaceX with a $1.8 Billion Dollar contract. Reassuring employees and openly
communicating was the best way forward and only an expert manager could calmy
navigate the waters of an industry that truthfully nobody was in, and came out the other
side better than other with the first private company to send a rocket to space, now
that’s an impressive feat.
As a good leader, Elon Musk cannot avoid making mistakes in the process of business
management, but he has accepted the problem and has important notices about his
wrong decisions to help strengthen employee morale. When SpaceX encountered initial
difficulties, Elon Musk did not give up and continued to encourage members to pursue
the company’s goals. We can see how Elon Musk has applied important factors to
create an effective team. Despite creating an unrealistic production target, Elon Musk
has apologized for looking at the results and admitted that he needs to have a clear
goal with the right skills and abilities. For SpaceX, the ability to create an effective work
team through mutual trust, good communication and appropriate leadership. Creating
Effective Work Team, Chapter 16, 444-446
Another management issues that arise within all companies is employee morale and
how to keep it and a sustainable level that keep everybody happy and ultimately
wanting to come into work. Even as you’re trying to have record setting growth trying to
sell electric cars, Elon still demands a certain level integrity that is vital to any company
to succeed. For example, Tesla has a strict policy of no negotiant no deal, which means
that brand new cars should not be discounted because his reasoning is there is no
reason, and if somebody gets a discounted car and another person doesn’t and it is the
same car, than that is not right. He could have easily ripped into the managers for
allowing this to happen, which is serious as your reputation and integrity is crucial to a
successful company, as he is well aware. What he did was send a nice simple email of
what he expects and what is not. The email starts with “First, I’d like to congratulate you
on an excellent quarter” He is acknowledging the good work they are doing. Good
leaders acknowledge, keep morale up, and soften criticism. Next, he says “It is
absolutely vital that we adhere to no negotiant and no discount policy that has been true
since we first started taking orders” Next he explains the expectations and also benefit
of the doubt of maybe he wasn’t sure about the details. Then he goes on to explain “We
either win in a way that is fair and right or we lose with our honor intact and accept the
consequences” For one who even talks like that, especially as a CEO, to have a moral
compass where it not all about the money, but creating a brand where customers can
trust, and not be shady, because it certainly is easy when you’re in that position. It
shows he is taking responsibility and he’s not only focused on problems but thinking
solutions as well. Lastly, he mentions “I’m sorry for the draconian language, as I am
super grateful for your hard work” I think that speaks volumes of who Elon is a leader
and management crises expert. He keeps language simple for his employees, so they
know what to expect, while encouraging them and thanking them for all their hard work.
Not everybody is like this because not everybody is Elon Musk.
The last management issue is using social media in organization. For those who know
Tesla, we will immediately think of Elon Musk and vice versa, he is the one who has
huge influence on social media, and he use this way to promote Tesla products more
than any other leaders. This is evidenced in a small part of the academic journal ‘The
factory of the future’ Historical continuity and labor rights at Tesla. As social media
grows, free speech will become more difficult to control, which is a challenge for
business leaders to manage the image of the company, including Tesla and Elon Musk.
To my reading from CNN reports, Tesla is reported to have hired a PR firm to monitor
and report employee discussions on the Facebook platform about fundraising.
Besides Elon Musk and Tesla and SpaceX, we can mention Tim Cook, Apple’s CEO
also has some similarities in management, specifically expressed through creating a
culture of communication with customers and employees. Tim Cook said “wouldn’t it be
great if everyone woke up and said, from now on I’m treating people with dignity and
respect” there would be so many problems in the world that would go away. The
problems of employees need to be heard and the leaders in Apple are always available
to receive and handle the problems that employees are facing.
He trusts his associates in the organization, gives them authority, and provides them
with a fair share of work based on the individual’s ability. Admitting your own mistakes is
also one of similarities between Elon Musk and Tim Cook, a good leader is someone
who understands their own mistakes and continues to develop. This is evident when he
speaks about Steve Jobs “Maybe the most under-appreciated thing about Steve was
that he had the courage to change his mind, and you know it is a talent. It is a talent”.
Through the smart management approaches of Elon Musk, Tesla’s revenue has
increased sharply over the years. Specifically, revenues in 2021 increased by around
71% compared to 2020 according to information compiled by Insideevs.com. the
numbers analyzed in more detail for the 2012-2014 quarterly sale through the Academic
Journal Changing the fate of fuel cell vehicles: can lessons learnt from Tesla Motors. In
addition to the numbers proving the leadership of Elon Musk, we have very positive
comments from employees who have worked with Elon Musk about his management.
For example, a compilation by Business Insider came up with the following. A former
senior-level employee said that 90% of the time he disagreed with Musk, he later
realized Musk was right. “I feel like I’m 10 times smarter now than when I first joined,”
he said.
Based on what I have learned in the textbook and my understanding of the
management practices of Elon Musk and Tim Cook, I agree with the solutions and
development directions of these two leaders, because I always like to see on the
numbers and the numbers about the business results are real, it shows the
management ability of those leaders. And the comments of former employees show
how many valuable lessons they have learned from Elon Musk and Tim cook.
Academic Papers References
Timothy J. Minchin (2021) ‘The factory of the future’ Historical continuity and labor rights
at Tesla, Labor History, 62:4, 434-453, DOI: 10.1080/0023656X.2021.1940115
https://doi.org/10.1080/0023656X.2021.1940115
Hardman, Scott; Shiu, Eric; Steinberger-Wilckens, Robert. In International Journal of
Hydrogen Energy. 30 January 2015 40(4):1625-1638 Language: English. DOI:
10.1016/j.ijhydene.2014.11.149,
https://doi.org/10.1016/j.ijhydene.2014.11.149
Thomas, V.J.; Maine, Elicia. In Journal of Cleaner Production. 20 October 2019
235:653-663 Language: English. DOI: 10.1016/j.jclepro.2019.06.284,
https://doi.org/10.1016/j.jclepro.2019.06.284
References from textbook
Robbins, S., Coulter, M., Leach, E. and Kilfoil, M. Management, 13th Cdn Ed
Important of managing Responsibly, chapter 1, 14-15
The Omnipotent View, chapter 2, 36
What Is Organizational Culture?, chapter 2, 38-41
Creating Effective Work Team, Chapter 16, 444-446
Importance of Social Media to the Manager’s Job, Chapter 1, 13-14
Other References
Diane Currie, S.( 2016, October 17). Elon Musk shows how to be a great boss in 1
simple letter.
INC: https://bitly.com.vn/oibcae
Elizabeth, H. (2022, April 27) SpaceX: Facts about Elon Musk's private spaceflight
company.
SPACE: https://www.space.com/18853-spacex.html
Gene Marks ( 2017, October 16) Tesla fires hundreds of employees, citing poor
performance reviews.
Washingtonpost: https://bitly.com.vn/7pdcn6
Andre, L. (2017, August 8) 3 Signs That Managers, Not Employees Are, the Problem
With Performance Management.
Entrepreneur: https://www.entrepreneur.com/article/297920
Scott, M. (2019, December 9) Tim Cook Powerfully Expressed the Importance of
Showing Respect. Here Are 9 Ways to Show Employees More of It.
INC: https://bitly.com.vn/2y41vi
Mark, M. ( 2019, October 1) Former Tesla employees reveal what it's like to work with
Elon Musk.
Business Insider: https://bitly.com.vn/ucy00m
Andrei, N. (2022, May 26) Record 2021 Revenues Bump Tesla Up 35 Places On The
Fortune 500 List.
Insideevs: https://bitly.com.vn/x1o9p5
David, C. (2022, May 4) Apple Statistics (2022).
Businessofapps: https://www.businessofapps.com/data/apple-statistics/
Leander, K. (2019, May 5) Here’s why Apple CEO Tim Cook is a ‘genius,’ says best-
selling author of ‘Inside Steve’s Brain”
CNBC: https://bitly.com.vn/cicp72
Jordan, V. (2022, June 3) Tesla reportedly hired a PR firm to monitor employees on
Facebook
CNN: https://bitly.com.vn/ttvoan
Lora, K. (2022, Jun 3) Tesla monitored its employees on Facebook with help of PR firm
during 2017 union push
CNBC: https://bitly.com.vn/es3oo4