Elon Musk on Money, Success, and Leadership

By on January 26, 2021
Elon's opening of the Tesla Annual Shareholders Meeting by Steve Jurvetson, licensed under the Creative Commons Attribution 2.0 Generic license. Steve Jurvetson

When asked several weeks ago about the fact that he was now the wealthiest person in the world, worth $184 billion, $10 billion more than Jeff Bezos, Musk replied, “How strange. Well, back to work.

I’m sure many would be puzzled by his dismissive response—”How strange”—to a question about a quite incredible increase in his wealth. At the beginning of 2020, Musk was worth $27 billion. Much more instructive was his comment, “Well, back to work.

It’s a perfect response from a leader who has always had a laser-like focus on the work of building great products, be they cars, rockets, or super high-speed trains. It’s also a perfect response from someone who has never been interested in money.

What an incredible contrast to the perspective of Alfred P. Sloan, President of GM from 1923–1937 and CEO from 1937–1956, who said, “GM is not in the business to make cars but to make money.” Many automotive industry analysts believe that Sloan’s perspective was the poison that led to GM’s need to declare bankruptcy in 2009 and requiring an infusion of $50 billion from the Treasury Department to save the company.

Musk’s focus on the building of great products is at the heart of his leadership style as is his understanding of the supreme importance of listening to employees. He has worked hard to build an environment in which employees know that their insights are valued and respected. He has said regarding listening to his employees, “Look even if you see something that might be totally irrelevant if you think there’s a tiny possibility that it could affect our success, please let me know.

And regarding the culture he’s building at Tesla and SpaceX Musk has said, “If people are going to be afraid, I’d rather they’re afraid of what will happen if they stay silent than being afraid of what will happen if they speak up. We’re not going to have a culture where the messenger gets shot. We’re going to celebrate the person who called a potential threat or risk to our attention.

A year ago, I listened to Lesley Stahl interview Elon Musk on 60 Minutes. As I heard Musk’s respond to her questions, I thought to myself, “Musk is a Lean leader.

Despite Tesla’s well-documented manufacturing missteps, the leadership provided by Elon Musk since he became Tesla’s CEO and Product Architect in 2007, provide valuable lessons in what’s required to take a company that was a very marginal player in its industry and transform it into a technological leader of this industry. The fact that Tesla is now successfully manufacturing vehicles and making money doing it is to a large degree the result of Elon Musk’s transformational leadership, leadership that also happens to reflect three of the major precepts of Lean manufacturing. And here they are.

  1. While productivity and profitability are important, the prime drivers of highly successful companies is having a clear understanding of the ways in which what the company does makes life better for the world outside of the company as well clearly demonstrating a concern for the well-being of its employees.
    In his interview on 60 Minutes, Musk said “The whole point of Tesla is to accelerate the development of electric vehicles and sustainable transportation, to build cars that don’t harm the climate and help save the planet.” He added, “Our employees believe in the dream.
    All of us have a need to lead lives that aspire toward a higher purpose. Too many of us can only meet this need outside of our workplace. As a result, we are often emotionally detached from the company that pays us. What a difference it makes when employees believe the work they are doing will make life in the future better for their family, their friends, and their neighbors. When employees have this view of the work they do, seeing it as being related to a meaningful mission that extends beyond the making of money, great things happen. It transforms work from drudgery to an experience often filled with moments of joy. That’s the power of “Our employees believe in the dream.
    In addition, highly successful organizations have work environments with many of the characteristics of a very healthy family. People care for each other at a personal level. I saw evidence of this on the assembly line at a Toyota plant in Princeton, Indiana. An employee had posted this note on one of the bulletin boards on the line: “It really made me feel great to be able to help one of my team members with a personal problem.” And that’s exactly what members of healthy families feel when helping one of their members.
    All of this is radically different than the sullen, angry workers I encountered in doing training at GM plants in Detroit in the mid-80s, plants that were still being poisoned by Alfred Sloan’s dictate, “GM is not in the business to make cars but to make money.
    As Elon Musk reflected in his 60 Minutes interview, his experience in opening a third assembly line at Tesla brought home to him loud and clear the importance of the human factor in manufacturing. He remarked with a smile after noting that this line was de-robotized, “Humans are underrated.” All life is a continuing learning experience; for you, for me, and for Elon Musk.
  2. Being aware that a leader’s presence on the line can have a very positive impact on employee morale.
    Musk has said that during Tesla’s drive to increase the production of their Model 3 to 5,000 vehicles per week, he was on the factory floor day and night. When asked why he did this, he replied, “The team needed to see that however hard it was for them, I’d make it worse for me.
    One of the key teachings of Lean manufacturing is that leaders need to “go to the Gemba,” meaning going to the place where their products are made. Musk knew that he needed to be on the line to learn more about how production was proceeding. He also recognized how important it was for his employees to see that he was fully committed to success of the company and wasn’t asking them to do any more to drive this success than he asked of himself.
  3. Having the ability to learn from mistakes.
    Nothing humanizes a leader more than admitting to having made mistakes. Musk, in the 60 Minutes interview, said, “Depending on excessive automation at Tesla was a mistake. To be precise, it was my mistake. Humans are underrated.” He added, “People are way better at dealing with unexpected circumstances than robots.
    Mistakes are great opportunities to learn. Elon Musk learned from the mistakes made in the initial design of the Tesla production line. And by recognizing these mistakes he opened the door to his employees being more willing to openly talk about mistakes they had made.

Tesla’s and SpaceX’s great successes are happening because:

  • They have a leader who understands that money is a by-product of a laser-like focus on quality, that making money is not even close to being the primary goal of the company.
  • They have a leader who recognizes that the creativity and intelligence of employees are the key drivers of the success of a company.
  • They have a leader who understands the value of those failures that occur as a result of pressing the limits of performance.

And that’s what Lean leadership is all about. Creating an employee-centric workplace, unified by a common vision of the higher purpose of their work. Having a leader who is in the trenches with front-line employees as they work to meet production goals. Having a workplace culture that reflects an understanding that it is only through the making of mistakes that progress is made.

St. Louis Community College’s Corporate Services Group would greatly appreciate having the opportunity to support your building of a highly productive workplace driven by the values and practices that have made Elon Musk’s companies so incredibly successful. Just call Eric Whitehead at 314-539-5022 and let’s schedule a time to talk. We’re confident you’d find it time very well spent.

Photo: Elon’s opening of the Tesla Annual Shareholders Meeting by Steve Jurvetson, licensed under the Creative Commons Attribution 2.0 Generic license.

About George Friesen

George Friesen serves as Business Practice Leader - Lean Manufacturing for the Workforce Solutions Group of St. Louis Community College. He has led the College's Lean business practice area since 2000. Prior to joining the College, George worked for Maritz Performance Improvement Company. Over the past 35 years, he has served a wide variety of Fortune 500 companies, specializing during the past eleven years in Lean Manufacturing, focusing especially on the 5S System, Lean leadership and thinking processes, Value Stream Mapping, and Lean team building. George is a graduate of Washington University (AB), Webster University (MA), and United States Air Force Flight Training.

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