How to Lead Like Tesla

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Tesla Motors just beat analysts’ earnings expectations for the second quarter in a row. Its stock has more than quadrupled in the past year and Consumer Reports has said that, “it’s the best car we’ve ever reviewed.”

 

How did Tesla Motors achieve this?

I believe that the single most important factor contributing to Tesla’s success has been superb leadership.

Here’s how it began…

 

A Vision

It is absolutely clear where Tesla is headed and what they are attempting to achieve. Not only that, their vision is exciting and important: nothing less than changing the world.

Here’s their vision statement:

Create the most compelling car company of the 21st century by driving the world’s transition to electric vehicles.

 

A Powerful Story

Tesla has a great story: A tiny startup run by guys who knew nothing about the car industry but who had the courage and conviction to break away from existing paradigms. Everyone doubted they could be successful because car companies are notoriously difficult to start—building a massive supply chain, designing cars from scratch, competing with rival companies that have billions of dollars at their disposal, and trying to get consumers to trust and buy a brand they’ve never heard of before is incredibly challenging. And yet this is what Tesla—the underdog—set out to do and is doing.

 

A Clear Strategy

I like Max McKeown’s definition of strategy, which he claims is the human attempt to attain “desirable ends with available means.” It is “about shaping the future.”

Tesla’s strategy for “driving the world’s transition to electric vehicles” is elegant and convincing:

  1. Build a sports car
  2. Use that money to build an affordable car
  3. Use that money build an even more affordable car
  4. While doing the above, also provide zero emission electric power generation options

So far, Tesla has completed step 1, 2, 4, and is 18 months from completing step 3.

 

A Leader to Believe In

Elon Musk is exactly the kind of leader that Tesla needs at this time in its history. He’s visionary and ambitious (he also runs a company called SpaceX that privatizes space travel) and his background in economics and physics lend credibility to his concepts. A company like Tesla that is challenging the status quo also requires someone who is committed and completely confident. Musk is both. After selling PayPal, he took nearly all of his newly gained fortune and invested it into Tesla for years even as the company saw one quarterly loss after another. Musk also regularly says audacious things like “second place should need a telescope to see us.” Arrogant? Yes. But my point is that his persona and leadership style is congruent with the revolutionary aims of his company.

 

 

A Culture that’s a Catalyst

Tesla Motors doesn’t just talk about its forward-thinking innovative culture; it manifests it.  Take its location in Silicon Valley instead of Detroit, and its open, collaborative office space, which is only a short walk from the manufacturing area, for example. Musk works in a cubical that is indistinguishable from those of his employees so that there are no barriers to communication. The employees come from a variety of both automotive and non-automotive backgrounds and talk excitedly about how fortunate they feel to be a part of something so significant. Tesla spends its money on research and hiring the best of the best, not on advertising campaigns.

 

While other companies are drifting about at the mercy of economic winds and luck, companies like Tesla are navigating their way to success with a true leader at the helm.

 

What’s your vision? What’s your story? What’s your strategy? Will people follow you?

If I ask one of your employees about your company’s culture, what would they tell me?

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