Elon Musk's 3 Laws of Productivity That Make Him A Walking Contradiction
Would you survive working for Elon Musk?
Elon Musk's is dramatic, erratic, and theatric.
He is an aggressive leader with a great vision but lacks social skills. He is loved by many people yet despised by the majority. Despite some opinions about his lack of leadership skills, he leads many companies.
The biggest five companies he leads are Tesla, SpaceX, Neuralink, The Boring Company, and X (Twitter). Elon Musk is a dynamic, busy man, and it's a mystery how he splits time across multiple companies. Since I am discussing an enigmatic and vibrant man, it is only fair to explore his top three management principles.
The world's wealthiest man often bragged about his ability to work 80 to 100 hours a week. It is evident that despite the chaos surrounding him, there is an underlying order in his world. Even though he never articulated his management practices, let me try to extract his top 3 laws based on my observation.
If you've ever wondered, "What Musk is thinking? This is my attempt to answer that question.
Law #1: Musk only invests money in daring visions, expensive solutions, and no competition.
According to the Harvard Business Review, Musk's management strategy can be distinguished by common themes across three areas:
- What fits into his vision for problems to solve?
- How does he design an organization as a solution to those problems?
- Why can he so effectively mobilize resources toward those solutions?
This three-question framework provides us with a lens through Musk's mind. Let's start with the vision; all of Musk's companies have bold visions; for example, "SpaceX aims to enable human colonization of Mars and advance space exploration and technology."
Once he establishes his vision, he looks for a huge problem in the industry. At Telsa, Musk wanted "to accelerate the world's transition to sustainable energy." You may be thinking this is a major problem. Musk is aware of that. Musk only seeks problems that require massive fixed-cost investments and scale to eliminate competition.
To solve the above problem, he built five Tesla Gigafactories that no company could afford. Then, Musk used a strategy concentrated on vertical integration, meaning control over every production and supply chain stage within his companies.
This simple strategy helped him to monopolize the electric car industry long before anyone had realized it.
Law #2: Musk chooses accountability over popularity.
The last thing Musk cares about is being popular.
That's why most of the actions I will discuss below won't be popular. This section will discuss his philosophy on managing employees and encouraging innovation.
If you don't agree with what you are about to hear, ask yourself, "Do you often find yourself reluctant to give negative feedback to your direct reports? Do you water down negative feedback to make it more palatable?" You must keep reading if the answer is yes to either of the above questions.
Musk fires people who don't align with his vision.
It is known that Elon Musk ruthlessly fires any employee who disagrees with him or gets in his way.
In 2006, Elon Musk disagreed with his head of marketing, Jessica Switzer, and a public relations firm over their expenditure on marketing, so he fired them. In his book "Power Play," Tim Higgins explains that Musk believed that his name alone would be enough to generate interest in Tesla vehicles.
The same year, the Tesla plant manager and a paint shop manager were fired for saying it was impossible to hit Tesla's delivery goal of 100,000 during the quarter.
In 2022, Elon Musk took over Twitter and quickly fired CEO Parag Agrawal and two other executives. Later that year, Alan Rosa was also fired by Musk for opposing budget cuts made after the acquisition of Twitter. In 2023, Rosa filed a lawsuit against Musk for wrongful termination and retaliation.
Musk also uses former GE chief Jack Welch's 10% rule, who used to fire the lowest-performing 10% of his workforce each year, a practice many experts have somewhat discredited.
Musk is a master innovator and erratic leader.
According to Walter Isaacson, Elon Musk's behavior can sometimes be erratic and impulsive, which he calls "demon mode."
While this impulsiveness has led to success in some of his ventures, it has also caused him to fail in others. In his book "Elon Musk," Isaacson explains that Musk knows his destructive behavior and has developed a framework to help him work around his weaknesses.
The framework is named The 5 Steps of Musk's Algorithm.
- Make the requirements less dumb. Before making any improvements to any process, create as much clarity about all the requirements that exist today as possible. Musk says, "Requirements from smart people are the most dangerous because people are less likely to question them. Always do so, even if the requirement came from me. Then make the requirements less dumb."
- Delete any part or process you can: If something doesn't make sense, question and eliminate it. Musk adds, "You may have to add [parts or processes] back later. If you do not end up adding at least 10% of them, you didn't delete enough."
- Simplify and optimize the design: Always ask, "What can I do to simplify this process?" But only do this after eliminating what needs to be eliminated; most people make a mistake by simplifying and optimizing a part of a process that should not exist.
- Accelerate cycle time: Find a way to speed up every process. If a human or technology is involved in the process, it means there is a potential to speed up the process.
- Automate: Ensure that a process is required for production before automating it.
Law #3: Musk prioritizes productivity over creating an artificial sense of harmony.
Musk hates meetings.
Football players show their talents when they step on the football field. Artists can show their abilities when they face a white canvas. Leaders show their mastery when they lead their meetings efficiently.
I always ask leaders their opinions on meetings, which helps me understand their leadership style. This is because their approach to meetings can have a powerful impact on the productivity and success of their team.
In 2018, Elon Musk sent a memo outlining his three rules regarding his meeting philosophy to Tesla employees.
- Minimize large meetings: It's best to avoid them unless they are useful for the entire audience.
- Reduce meeting frequency: Minimize regular meetings unless they address extremely critical matters. If there are no urgent issues, cancel all meetings.
- Leave unproductive meetings: It's acceptable to leave a meeting or end a call if it's unproductive. If you are not adding value or receiving value, leave the meeting. Staying in such a meeting is a waste of time for everyone involved.
Musk's primary focus is to add value and increase productivity. If a meeting does not accomplish that, don't hold the meeting or leave the meeting.
Elon Musk's adherence to these three laws created a walking contradiction. Would you survive working for Elon Musk?
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