Can Elon Musk’s Management Style Ensure the Continuing Success of the Tesla?

Case Study Report

On

Can Elon Musk’s management style ensure the continuing success of the Tesla?

Submitted to

David Caulton

IALS, English for Business Masters

August 29, 2018

By

Tian Zhang

Marcus Vallius

Ting Liu

Hangtian Shentu

Xinyue Zhou

Content

Introduction        2

The strengths of Musk’s management style        3

The weaknesses of Elon Musk’s management style        5

The opportunities of Elon Musk’s management style and Tesla        7

The threats of Elon Musk’s management style and Tesla        9

Recommendations and conclusion        11

Introduction

Elon Musk is a business magnate, investor and engineer. He founded and serves as CEO of The Boring Company. He is also the co-founder, CEO and lead designer of Space Exploration Technologies (SpaceX) and the CEO of Neuralink. Moreover, he is the co-founder and CEO at Tesla, which is a company dedicated to producing affordable, mass-market electric cars as well as battery products and solar roofs. Musk oversees all product development, engineering and design of the company's products. He took an active role within it. However, he has a crisis of trust in the recent months. His erratic maneuvering highly influenced the share price of Tesla, and it also makes the board of the company to reconsider the status and rights of Elon Musk in Tesla (Harwell, 2018).  

In order to explore the connection between the way that Elon Musk’s manage the company and the success of Tesla, this report will use SWOT analysis to identify the strengths, weaknesses, opportunities and threats of his management style and Tesla. In the end of the report, some possible recommendations will be given to improve the company’s development.

The strengths of Musk’s management style

It is obvious that Musk is a transformational leader and he is the trailblazer. He leads these multiple companies in a parallel way successfully. The strength of his management style will be discussed as following:

Articulating a clear and powerful vision

The most effective leaders have a powerful vision, which they share, and lay the path to achieve the vision. They are able to influence others to see their view. As a successful leader, there is no doubt that Musk has a vison. What sets Musk apart from others is his vision to change the world and making it a better place for humanity. Some of his goals include reducing global warming through sustainable energy production and consumption such as SolarCity and Tesla and reducing the risk of human extinction by making life multiplanetary by setting up a human colony on Mars such as SpaceX. He has effectively built an army of people that believe in his vision and support his every move. This can be proved from Dolly Singh, former HR head at SpaceX: “The thing that makes Elon Elon is his ability to make people believe in his vision.”

Hiring people who are smarter and inspiring employees effectively

Musk said hiring right and smarter people could make contribution to the solution, whereas hiring wrong may cause huge losses. Therefore, Musk always challenge the leaders to hire people that are better than themselves which can make the company better. Musk uses his own unique strategy to inspire his workers and make them feel like they’re part of a larger team at SpaceX. He requires that senior executives lead their employees through “selflessness.” Musk said that he wants leaders to find ways of motivating and inspiring their teams, reduce the noise in their work and help remove blockers". He also said, "If you are a manager or leading at any level at SpaceX, we stress that your team is not there to serve you. You are there to serve your team and help them do the best possible job for the company."

Listening to others

It is significant for leaders to listen to others’ opinions. Musk is a genius and knows that it is worth his while to listen to what his customers observers, critics and followers have to say. And he uses this information collected from others to his best advantage. He has ever been known to go onto Twitter to listen, respond and use the information to make improvements to Tesla’s cars.

Communicating effectively

Anyone at Tesla can and should email or talk to anyone else according to what they think is the fastest way to solve a problem for the benefit of the whole company. Employees can talk to their manager’s managers without their permission.

The weaknesses of Elon Musk’s management style

Elon Musk‘s management style and personality sometimes has negative influence on his company. Because of his bad performance on social media and his product design, the company is now facing weakness in the following aspects:

Limited presence of super charger network

Tesla’s sales network depends on its super charger network, which is now still limited presence. The fast-charging infrastructure used to be free to all owners, but will now cost a bit for new owners. As its super charger network grows, the brand’s sales will also grow. The company has invested hundreds of millions in the Supercharger network, which is most fully built up in the US, where Tesla says it's possible to go almost anywhere and not be at a loss of fast charging. Europe is also expanding, as is China. Elon Musk is now working on growing this network faster but till now it has a limited presence and will take both time and a large investment to grow. But Tesla has to do this, correctly recognizing that without fast charging, electric cars aren't competitive with gas-powered vehicles.

Public meltdown

Elon Mask‘s performance on social media has negative impact on the company. As with the president, Donald Trump, much of Musk's PR work is performed not by the billionaire himself, but by his idolaters and by the media. However, he is facing calls for him to step down, as well as greater regulatory scrutiny and a shareholder backlash after his actions literally cost the company billions of dollars. For example, Elon Musk baseless attacked on a British diver who masterminded the successful rescue of 12 young Thai footballers, falsely calling him a “pedo” on social media. He also shocking attacked on expert cave explorer Vernon Unsworth included claims that he had never seen Mr Unsworth at the cave and - the false claim - that he was a paedophile. This immediately aroused strong criticism from public opinion, and also caused Tesla's share price to plummet on the July 16th.