What ails Elon Musk?

Elon Musk is news again. Actually, for the last decade or so, he has always been in the limelight. Love him or hate him but you simply cannot ignore Musk - such is the impact of Musk’s vision and his innovations. Extreme ups and downs are a part of Musk’s life but even by his exalted standards, 2018 has been one of Musk’s toughest. Musk’s 120-hours a week work routines, inability to sleep and frequent emotional breakdowns are leading his investors and Musk-lovers to wonder - will he and his creations implode?  

The power of Musk

Entrepreneurship is a high-risk, high-return game and isn’t for everyone – just 5% of the population takes up entrepreneurship at some point in their career. Even fewer (less than 0.01%) are the glorified ones that battle odds, change the rules of the game and build successful ventures. This isn’t surprising – with a failure rate of more than 90%, finding a successful entrepreneur is like finding a needle in a haystack. In this extremely rarefied space of successful entrepreneurs are the exalted ones – those that change not just the rules of the game but the game itself. Elon Musk is that “once in a generation” genius who doesn’t change the game or its rules – he creates new games consistently. Musk has entered and successfully disrupted industries as diverse and with such impossible barriers to entry as space travel and cars – and he doesn’t stop. He keeps entering new ones.

His big thinking coupled with an uncanny ability to make that vision a reality - in the process, disrupting otherwise well-running industries - makes Musk a visionary unlike any other. It is one thing for an “average successful” (pun intended) entrepreneur to make a statement – quite another for Musk. General public, fellow entrepreneurs, shareholders, competitors, CXO’s, Wall Street and even heads of state are interested in what Musk thinks– sometimes, his statements are enough to shake up the already roiled CEO’s in the industries he makes comments about. In a world where changes are happening so fast that no one is able to make sense of where we are headed, Musk appears to be a sane voice who comprehends the gravity of everything happening around us.

Musk’s statements are treated as gospel truth because of this track record - making him tremendously powerful. Ordinarily, this is a great situation to be in (If you and I were to speak, not even our children would listen to us) but for Musk this is a double edged sword because with great power comes great responsibility.

Then why the current situation

When Musk tweets that he might take Tesla private or that he is crumbling under an unsustainable 120 hours work week, that isn’t an ordinary comment – the former raises Tesla’s prices to unheard of levels and the latter worries investors about sustainability of Musk, his ventures and more critically, the billions of dollars they have sunk into Tesla. Even though Musk can dismiss his comments as impulsive thoughts or emotional outbursts, that’s not how his audience views them – after all, they are accustomed to Musk's mature vision not his tomfoolery.

Now that begs the question - Why is Musk – otherwise known for his insightful views – making comments in the last few months that are at best avoidable? Why are Musk’s ventures losing value? Has Musk lost his Midas touch?  

Musk and leadership

Musk’s current situation can be best understood with this diagram.

Having a clear vision about solving a problem is a valuable skill but converting that vision– especially a disruptive one – into a reality by building a working model is an altogether different skill – not surprisingly, not every visionary becomes a successful entrepreneur. Once a working model is ready, a third skill is required to convert that working model into a successful venture that scales and makes money. While innovation skills (rapid prototyping, judgment, resilience and raw Intelligence) are necessary while turning a vision to working model, duplication skills of operational excellence (process/systems/tools, financially savviness, Emotional Intelligence) are required to turn a working model into sustainable business– one that makes money for investors.

The skill of innovation is usually complementary to the skill of duplication. Barring a few rare exceptions like Jeff Bezos of Amazon, both skills (innovation and duplication) are rarely found in one person. That’s why entrepreneurs with an innovation mindset tend to quickly partner with someone with operational excellence skills to ensure their vision sees the light of the day. There are plenty of such examples (Mark Zuckerberg with Sheryl Sandberg, Larry Page and Sergei Brin with Eric Schmidt, Steve Jobs with Tim Cook) where a visionary realizes the benefit of this symbiotic partnership and acts well before he is forced to do so as choices run out. Musk missed out on this partnership – and now, time seems to be running out.

The need for such a symbiosis rarely shows up in the early phase of a startup’s life cycle when the working model isn’t ready. As the idea matures, the missing gap shows up in the leader’s inability to monetize a prototype leading to a perpetual value destruction for investors. At its extreme, such delays could turn a disruptive Goliath into a sustaining setup as competition catches up.

Investors are patient upto a point – in Musk’s case, they have been more generous given the grandiosity of his vision. However, a decade of patience is wearing thin and the latest remarks of Musk are adding to the sense of unease.

Musk and Tesla brand

A second part of Musk’s challenge is a self-created one. Musk is a brand unto himself. Like Mark Zuckerberg (Facebook) and Jeff Bezos (Amazon), brands of Musk’s creation (Spacex, Tesla) are intertwined deeply with his own. Musk’s case is even more challenging – with no number 2 leader in sight, Musk’s sneezes are enough for his organizations to catch cold - and his investors to catch pneumonia. Off late, Musk is “sneezing” often sending his investors into an endless-pneumonia cycle.

The way forward

The boards of directors of Musk-founded organizations are already at fault for having allowed the situation to go this far. Like every problem, the first step is to acknowledge the problem – that a grandiose vision is NOT a replacement for business/people leadership and that while Musk excels in the former, he needs help with the latter. Getting an equivalent of Sandberg (or perhaps Sandberg herself) as quickly as possible is the next logical step. There is no doubt the process will be long and painful - Managing Musk’s emotions will be as difficult as managing the problem itself - but quick action will prevent Tesla from going the Uber way. Fortunately for Musk, he hasn’t shot himself in the foot so far like Travis Kalanick did.

As Musk reflects on his personal and his company’s toughest year to date - and worries about losing control over Tesla (and his other creations), he would do well to remember -

A certain giving up of control is good for the soul .... And for Tesla too.

Raja Jamalamadaka is a TEDx and corporate speaker, entrepreneur, mentor to startup founders, "Marshall Goldsmith award for coaching excellence" award winning top 100 coach to senior industry executives and a board director. He also serves on several CEO search panels. His primary area of research is neurosciences - functioning of the brain and its links to leadership attributes like productivity, confidence, positivity, decision making and organization culture. If you liked this article, you might like some of his earlier articles here:

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