As Tesla’s Shakespearean drama unfolded last week, one wondered if the Tesla board was using Jim Jones and the Jonestown suicide pact as their strategic plan. Saturday’s dramatic settlement with the SEC doesn’t change that. They are drinking the founder’s Kool-Aid. Charismatic CEOs can be brilliant visionaries, but they can also be their own worst enemy and a great threat to the future of an enterprise. They see the world differently and take bigger risks than most normal people would assume. Thus, most fail. But those who succeed often righteously believe in their own indispensability and immortality.
Musk’s U-turn with regulators, which will leave him as CEO but oust him from being Tesla’s chairman for three years and force Musk and the company to pay $40 million in fines, will not change who he is, or how he leads. Sound founders can become self-destructive as they become rigid in technology biases and their operational leadership, disparaging critics as parallel to the cowardly naysayers who tried to bring them down in their beginnings.
This is what happened with Edwin Land of Polaroid, Ken Olsen of Digital Equipment, William Norris of Control Data, Seymour Cray of Cray Supercomputing and An Wang of Wang Laboraties, among others. I knew these technology titans and they were no less brilliant and courageous than Musk, and no less stubborn. That is what led to the creation—and the self-destruction—of their enterprises.
Here are the issues Tesla’s board must now tackle:
Must have a Musk plan. He should be retained and contained. Musk is key to the company’s elevated value and the board should find him a scientific, industrial and ambassadorial role. Limit his ability to speak for enterprise on financial matters. In situations of distress, Steve Jobs, Martha Stewart and Steve Madden have shown that this is possible. Also, in non-crisis successions, visionaries such as Sam Walton of Walmart, Ray Kroc of McDonald’s and Howard Schultz of Starbucks were able to slide into such ambassadorial roles.
Consider an interm CEO. Mark Fields, the triumphant recent past CEO of Ford, would take this job with the right assurances. He delivered the best profits in Ford’s history, is on the frontier of autonomous driving technology and is revered in the industry. Ensure him support on operating changes, tech updates, distribution improvements, parts, etc. Musk insists that they own their own stores, which could become a problem as that company scales. They may want work with franchisees in certain areas, but Musk would resist. They are behind in Level III technology and missed out on laser-driven LIDAR enhanced sensors, relying strictly on radar and analog cameras.
Fix the board. They need to get out of the bunker. The SEC settlement is a step in this direction. It has Tesla bringing in two new independent directors from outside and establishing a new committee, according to The Wall Street Journal. The board’s current composition is weak, sycophantic and under-equipped.
Financial plan. Tesla’s cash drain must be addressed, as the company currently has only $2 billion cash, $10 billion in debt and huge capital investment needs. There must be a plan for moving forward. Vendors are being squeezed.
Operational plan. Reassure customers and vendors that the unparalleled turnover is about to end. Tesla has lost 30 vital top leaders in just 18 months!
Past struggles with CEOs including Mark Zuckerberg at Facebook, Travis Kalanick at Uber, John Schnatter at Papa John’s and Anthony Mason at Groupon suggest we can save the enterprise from its creators and is cult-like supporters.
Related: Musk, Trump & Twitter: You Are What You Tweet
Chief Executive Group exists to improve the performance of U.S. CEOs, senior executives and public-company directors, helping you grow your companies, build your communities and strengthen society. Learn more at chiefexecutivegroup.com.
0
1:00 - 5:00 pm
Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process
Executives expressed frustration with their current strategic planning process. Issues include:
Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns. They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning. Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process. This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented. If you are ready for a Strategic Planning tune-up, select this workshop in your registration form. The additional fee of $695 will be added to your total.
2:00 - 5:00 pm
Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations.
Limited space available.
10:30 - 5:00 pm
General’s Retreat at Hermitage Golf Course
Sponsored by UBS
General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.
The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.
