Elon Musk Must Learn To Accept Best Practices From Outsiders

A recent article shed light on Elon Musk’s stubbornness and unwillingness to adopt other companies’ successful car production methods, much to the detriment of Tesla.

Tesla CEO Elon Musk

A few weeks ago, we ran a column from the CEO of Sotheby’s International Realty Affiliates, Philip White, which included a brilliant piece of advice:

I have seen the pursuit of uniqueness without consideration for other factors blind executives to other lucrative opportunities. If another company does something well, that doesn’t mean no one else can use the same idea — the most successful companies routinely appropriate best practices from other businesses to maintain an advantage in the market.

In other words— you should absolutely appropriate someone else’s idea/formula in business and put your own touch on it. No one is saying you should blatantly steal, but it’s OK to borrow best practices for the sake of success.

Sure, there are too many remakes in Hollywood, a bunch of apps on your phone that all do the same thing, and far more high-end burger places than will ever be necessary—but that doesn’t mean you can’t take what has worked elsewhere and bring it to your company.

I couldn’t help but think of White’s advice when reading through a long, thorough takedown of Tesla CEO Elon Musk on CNBC.com this week. CNBC’s Lora Kolodny talked with 35 current and former Tesla employees, who in general, have mixed feelings about the controversial Musk. In general, it’s clear this brilliant CEO has inspired many of his employees but alienated and frustrated many others on his team.

Musk—whose propensity for the spotlight makes him somewhat of an easy target—is once again teaching CEOs what not to do. Here are five important takeaways from the article on what you should not be doing.

Don’t let pride get in the way. The article talks about how Musk rejects outside expertise from other carmakers. In particular, employees are seemingly banned from using Toyota’s world-famous Kanban system. Kanban helps employees reduce clutter and create a more efficient production schedule (no small thing when you’ve been tasked with producing 5,000 Tesla Model 3 vehicles in a week).

According to the article, employees have even taken to hiding their Kanban cards when Musk visits the factory. If employees can use someone else’s method to improve operations at your company, why discourage them from doing it? Sadly, I think we all know the answer to that question (hint: ego).

Don’t try and do it all yourself. Former employees told Kolodny that Musk wants Tesla to be completely self-reliant, which means they rarely use outside software. Using your own software isn’t a problem, until it becomes one. Tesla’s homemade purchasing order system doesn’t work well, according to the article, and it makes it hard for employees to track whether or not their projects are over budget. When you are losing more than $700 million per quarter, you should probably try to stick to a budget.

Don’t go for speed over quality. This should be obvious for any carmaker, but the article relays how during Tesla’s initial 5,000 cars per week push, Musk tried to speed up battery production by removing parts that he thought were completely unnecessary. Not only was this an example of Musk’s micromanagement, but employees allege the batteries produced from this new, sped up process were not tested for crash-worthiness.

Don’t just go spending money to differentiate yourself. In the mad rush to make Tesla a unique premier car manufacturer, Musk signed off on expensive high-end projects that went nowhere. For instance, Tesla spent $40 million on a “magic carpet” that was supposed to move parts over to workers on the Model 3 production line. Unfortunately, the magic carpet never got off the ground.

That’s just one example—there’s the overreliance on automation, Tesla’s “vision system,” and more. Not to keep harping on the financials, but when you are losing as much as Tesla, you can’t afford to throw money away.

Don’t stop learning from your failures. The article does give credit where credit is due: Musk learns quickly from his mistakes and has evolved to rely less on automation. “Fail fast and move on” is a Silicon Valley credo. It’s not surprising many people see that as one of Musk’s strengths, according to the article.


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