Elon Musk, the challenge of implementing Tesla's tough culture in Twitter

His heterodox style will undoubtedly generate profound changes in the company. The big question is whether the team will follow his lead.

A few weeks after completing the acquisition of Twitter for $44 billion, Elon Musk has already taken a host of decisions: cutting the 7,500-people workforce by half, closing the offices, establishing a new freedom of speech policy in the network, issuing an ultimatum to his team calling for the implementation of a culture of hard work and reducing the controls that moderate the content and expressions of users. The most positive aspect of these changes has been the increase in Twitter engagement measured by the number of monetizable daily active users (mDAUs), the highest in the company's history that we have seen in recent weeks. Among the negative points I would highlight the record number of unsubscribes to the platform, including celebrities, the reduction of advertising investments by some clients due to fears around the safety of brand use, and the risk of low platform maintenance due to the lack of qualified personnel.

Hundreds of employees have announced their departure, but it is too early to say whether the downsizing will be a brake on the implementation of Musk's plans. In the meantime, the business is suffering, given the negative cash flow currently generated by its operations. It is not yet clear how all these decisions will affect the company's performance, but what is certain is that Musk's leadership is divisive, and his unorthodox style will create profound changes in the company's culture.

Twitter is known for having a lax company culture, especially when compared to the hard-working culture at Tesla and SpaceX, companies founded by Musk. When substantial changes occur in a company's strategy, culture is one of the variables that usually needs to be adapted, as well as its organization, the people who will implement it, and the incentive policy that will motivate those changes to actually occur. Transforming culture is very difficult and the quickest way is to change people, but it is also the riskiest path, since a lot of knowledge is lost. If changes are made at full speed, as it is in this case, it generates lots of operational risks.

A company's culture contains multiple ingredients: values, behaviors, rituals, purpose, the way decisions are made, conflicts are discussed, communication and relationships are established. I have no doubt that Musk will change everything. The big question is whether the team will follow him this time. When someone founds a company he builds it following his own way, and so the values of the founder are reflected in the values of the company.

However, there is a big difference between creating a culture from scratch in a new project and doing so in an existing company. Each requires a different process, and the entrepreneur who is good at the former is not necessarily good at the latter.

Teams can be asked to work hard, but for that there must be a clear and attractive purpose as this will be what encourages them to move, especially when the company's workers belong to the new generations, who have fewer personal career goals and are more driven by purpose. Therefore, creating Twitter's true purpose, which is not yet clear, and aligning the teams around it will be Elon Musk's main challenge. His second challenge will be to get his employees to embrace the new strategy, and this will require middle management to understand it, take ownership of it, and explain and activate it in their teams as well to generate the acceleration that is required.

Musk's successes to date give him credibility, but in the decision-making process, past victories (the track-record) are not always a guarantee of future success. Will he be able to change his commanding style of leadership that always gives orders to the troops? This would help him to generate more commitment in his new teams.

Strategic change processes are very demanding on their leaders since they must master the art of combining different leadership styles; and also decide which one to start with and when to move from one to another, the order, speed and pace of change. The four most common leadership styles are: the commander style, which makes decisions and gives precise orders when there is urgency; the sociable leader style, which builds relationships, trust, listens to teams and decides once he has heard their opinions; the pedagogue style, which creates purpose, gives direction and lets teams find the practical solutions and make the concrete decisions that lead to the goal; and the process engineer style, which asks teams to redesign processes and procedures and gives time for structures to adapt to the new reality. None of these styles is better than the other and each leader has his or her own. The commander decides, but does not motivate. The sociable leader pleases people, but does not decide. The pedagogical leader inspires, but does not act. The process leader organizes the company better, but does not give direction. Therefore, the ideal is to mix the four.

In today's business reality, the commander style still predominates, which means that teams do not adhere to the new strategy and operational problems multiply. This leads to the restructuring of processes with an engineer style, which requires time that you do not have; and therefore, the leader goes back to the social style of asking people why things are not working; this leads to the necessary pedagogy of re-explaining the purpose and starting again!

If Musk learns to navigate between these four styles, managing well the timing and the sequence, he will generate much more engagement and his new strategies will be successfully implemented and executed.

Twitter is going to be very demanding on him, much more than what he thinks. Good luck to both !

David Cabero is General Manager for Europe at BIC Group and decision-making expert.