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Management, Business












Love him or hate him; there is no doubting the tremendous success and understanding that Elon Musk has achieved over the last 30 years in business. | Source: New Scientist
Love him or hate him; there is no doubting the tremendous success and understanding that Elon Musk has achieved over the last 30 years in business. | Source: New Scientist

Five lessons you can learn from a high-profile business leader

What can we learn from one of the most talked about people on Earth? DAVID BROWN reflects on the practices of an influential businessman.

Love him or hate him; there is no doubting the tremendous success and understanding that Elon Musk has achieved over the last 30 years in business.

From his early beginnings as one of the founders of PayPal, through the creation of Space X and Tesla, to his more recent developments in The Boring Company, his early role in ChatGPT, and his recent takeover of Twitter (now X), Musk has shown an ability to achieve what many have thought impossible.

I recently had the opportunity to read Walter Isaacson’s biography of the man, and what stands out is his uncompromising drive and obsession with whatever he is involved with.

To achieve one successful start-up is a tremendous achievement; however, to create four and take over one of the world’s leading social media platforms.

This occured while juggling a sizeable hands-on role in every company as a superhuman level of achievement.

Musk’s ability to engender commitment while also alienating people draws many comparisons to Steve Jobs, illustrating that the life of a genius doesn’t come without frailties that can make it difficult to live with.

The book provided many lessons that any business owner would do well to learn from. Although most of us are no Musk or Jobs, there are still key principles that we can use to drive our own businesses forward.

"Although most of us are no Musk or Jobs, there are still key principles that we can use to drive our own businesses forward."

One of the most valuable processes used by Musk is called ‘The Algorithm’, which he uses in every company he works in. It goes as follows:

• Question every requirement: Musk insists that every process comes with the name of the person who required it. He won’t permit processes that, when asked, receive the answer, “The legal department requires we do it this way”.

He insists on names so that people are accountable. As he states, requirements from smart people are often the most dangerous as they are never questioned.
He even wants his own decisions questioned—although, as the book repeatedly shows, he does get a little upset when this happens! The purpose of questioning is to make the requirement “less dumb.”

• Delete any part of a process you can: He would rather have a step removed and added back in than leave it there.

He insists that if you don’t add back 10 per cent of the processes deleted, you haven’t removed enough of them.

• Simplify and optimise: This works in tandem with the second and should, in fact, follow immediately from it.

He believes all processes should undergo the scrutiny of elimination before they are improved.

• Gain momentum: Speed up the process once you’ve completed the first three steps.

A common theme throughout the book was how frequently Musk made unrealistic timeframes for completing projects only to have the team achieve them.

• Automate: Once all other processes are complete, ensure the system becomes as automated as possible.

The book's countless examples make it fascinating, especially regarding Space X, where Musk and his team were able to make constant timeframe and cost savings compared to the burdensome government beast that is NASA.

In addition to the five governing principles of The Algorithm, Musk also adopts several other key guidelines:

  • All technical managers must have hands- on experience. He expects his software coding managers to spend 20 per cent of their time coding, or “they become like cavalry officers who can’t ride a horse anymore”. He also insists that his design team is based near the production line so they can see the consequences of their decisions.
  • He dislikes camaraderie in the workplace as he believes it then becomes hard to challenge a colleague's work for fear of throwing them under the bus.
  • He believes it’s okay to be wrong as long as you’re not confident and wrong.
  • Don’t ask your staff to do what you won’t do yourself. Musk is highly hands-on – it’s not unusual to find him on the factory floor at Tesla ripping out equipment and changing processes himself.
  • Whenever there is an issue, don’t just meet with the manager. Go a level down to those who are dealing with it firsthand.
  • Hiring is about attitude. Skills can be taught; however, attitude requires a brain transplant.
  • Maniacal urgency is optimum. He is unrelenting with the pressure he creates for results.
  • The only laws are those dictated by physics. Musk is libertarian, resisting any authoritative directives or government legislation as much as he can legally do, seeing them only as recommendations where he can.

You may not be running companies the size of Tesla or X; however, many of the principles applied by Musk would work equally well in your own business.

Which of these principles do you currently apply? Which would you benefit most significantly from?

 

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ABOUT THE AUTHOR
David Brown

Contributor • Retail Edge Consultants


David Brown is co-founder and business mentor with Retail Edge Consultants. Learn more: retailedgeconsultants.com

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