5 lessons from Elon Musk on the do’s (and the don’ts) of effective leadership

5 lessons from Elon Musk on the do's (and don'ts) of effective leadership

While Elon Musk is a polarising figure in the world of business, there are a number of important traits he exhibits which can help HR understand effective leadership and the do’s and don’ts of great leaders, writes Murray Priestman

Few CEOs are as visible as Elon Musk. With this high profile comes a big reputation, and this, like so much else that surrounds the man, is polarised. Depending on your position he might be a charismatic visionary and inspirational leader actively exhibiting the traits of effective leadership; or he could be a loose cannon who can’t control his emotions and is self-destructing before our eyes.

Whether you think he’s good at it or not, he is undeniably a leader. And there are at least five things that you can learn from watching Elon Musk that will make you a better leader.

Effective leadership lesson 1: have a vision
Leadership, at its simplest, is about painting a vision of the future and persuading others to follow you there.

It’s a cliché to say that the pace of change has never been faster, but it’s true. And it’s not just the speed, but the complexity that is challenging for leaders. This creates doubt for investors and fear for employees.

Which means that the leader who can articulate a clear vision of the future for their organisation – and sell it to customers – has never been more important. Shareholders and workers are looking for leaders who can bring clarity and simplicity to their world.

Elon Musk is outstanding at this. He may not have founded Tesla but from the moment he invested he painted a vision of a petrol-free future that has inspired fanatical customers and passionate employees.

A leader with a vision can engage their people, inspire devotion in their customers and belief in investors. It’s a crucial skill.

“When Tesla production fell behind schedule he started sleeping in the office”

Effective leadership lesson 2: Show and build commitment
It’s difficult to persuade your people to give their best for your company if you’re not committed yourself. And if you’re going to influence a whole organisation then that commitment needs to be highly public, regularly communicated and deeply authentic.

Peter Bregman, author of Leading with emotional courage, cites commitment as one of the four critical qualities of great leaders. As he puts it, “you need to show up powerfully and magnetically in a way that attracts people to trust you, follow you, and commit to putting 100% of their effort into a larger purpose”.

Elon Musk creates commitment by demonstrating, “powerfully and magnetically”, his passion for his companies. When Tesla production fell behind schedule he started sleeping in the office. He talks about spending 100 hours a week at work. His tweets show a man obsessed with the success of his companies, and he will get involved in the smallest detail of production to try and make a difference.

This passion can inspire employees to give everything for the company, and it can attract talent from around the world. There’s a separate question about how effectively Musk channels his commitment to get the right results, but no-one can doubt that as a leader he is passionately and authentically committed to his work.

Effective leadership lesson 3: Make yourself dispensable
Jim Collins, who knows a thing or two about great companies, said that “the greatest leaders build organisations that, in the end, don’t need them.”

Few modern CEOs are quite as synonymous with their companies as Musk. As one analyst put it, “why would you invest in Tesla without Elon Musk? It doesn’t make sense.”

Not only is this potentially bad for company performance – research suggests that over-powerful CEOs are associated with more variable results – domineering leaders are neglecting one of the CEO’s primary roles, to develop their successor.

“Be confident, be realistic, above all be consistent in your messaging and you will stand a better chance of bringing people with you”

Developing the talent around you also allows you to delegate more, focus on the bigger picture and, bluntly, keep your sanity. Musk, however, is reputedly a micromanager, taking control of the smallest details.

Sam Abuelsamid of Navigant Research points out the risk: “ If you’re dealing with supply chain, manufacturing, design, validation, retail and the service side of the business – and then, in Tesla’s case, you have all the other business lines they are in – it’s just not possible for any one person to effectively manage all that.”

A key responsibility for you as a leader is to develop your people. This allows you to delegate more – in itself a great development tool – and focus on the few things that really drive results, as well as build the succession pipeline that gives investors confidence and your company more security.

Effective leadership lesson 4: Consistency of message
Effective leaders have a message and stick to it. This creates confidence among investors that you are focused on delivery, and reassures employees that they are working to a clearly defined goal.

Consistency is key. If the strategy or messaging change regularly then confidence is undermined. How can you trust that your leaders know what they are doing if they constantly alter direction or shift your priorities?

Musk is notorious for shifting direction, adjusting targets and missing deadlines. Last week he announced Tesla would close all its showrooms, less than two years after the company trumpeted plans to expanding their retail network. And one week later they have changed their plans. Tesla is infamous for regularly missing its production targets, and customers on the waiting lists are wearily accustomed to frequent delays as they wait for their cars to arrive.

As a leader it’s not enough for you to have a vision; you need to give your stakeholders confidence that you know how to get there otherwise the journey is going to be awfully lonely. Be confident, be realistic, above all be consistent in your messaging and you will stand a better chance of bringing people with you.

“If the strategy or messaging change regularly then confidence is undermined”

Effective leadership lesson 5: Role model the right behaviours
All organisations expect certain standards of behaviour from their employees. The detail of these standards varies but, some things are generally acknowledged to be unacceptable.

Responding to criticism by calling your accuser a paedophile, for example, or humiliating analysts who ask questions about company performance is typically frowned upon, and if an employee triggered a $20 million fine from their industry regulator and was then accused of flouting restrictions placed on them in the aftermath, this would most likely result in dismissal.

Leaders are responsible for enforcing such standards and by far the best way to do so is to lead by example. This is not only self-evident, but it’s also proven to lead to benefits such as reducing risk, lower rates of misconduct and less pressure to break rules.

Whether they like it the example leaders set will be followed by employees. It’s called transference, and it’s the “emotional glue that binds people to a leader“.

If nothing else, positive leadership makes enforcing company policy that much easier; disciplining a production line worker for inadvertently breaching automotive safety regulations is harder, for example, if they can point to your CEO’s track record of consciously ignoring explicit orders from a regulator.

Effective leaders need to be conscious of their position as role models and lead by example, setting the ethical and behavioural standards they expect their employees to maintain.

Elon Musk may not be the perfect leader but that doesn’t matter. There’s plenty that you can learn from watching him that will help you understand and improve your own effectiveness. Thinking about how you perform in these five critical areas will help you become a better leader yourself.