Contemporary Leadership Perspectives: Elon Musk’s Leadership at Tesla

Contemporary Leadership Perspectives: Elon Musk’s leadership at Tesla
Table of Contents Introduction..................................................................................................................................... 3 The Musk Journey....................................................................................................................... 3 Autocratic Elon Musk.................................................................................................................. 4 Autocratic Leadership..................................................................................................................... 6 Transactional Leadership................................................................................................................ 9 Recommending Transformational Leadership for Tesla............................................................... 10 About transformational leadership............................................................................................ 10 Why Transformational Style for Tesla?........................................................................................ 11 Expected Changes......................................................................................................................... 13 Increased profits........................................................................................................................ 14 Change in the organizational structure...................................................................................... 15 Job satisfaction for employees................................................................................................... 15 The attraction of top talent........................................................................................................ 16 Conclusion..................................................................................................................................... 16
Contemporary Leadership Perspectives: Elon Musk’s leadership at Tesla
Introduction
Leadership is one of the core elements of a successful company, and different leadership styles suit particular situations more than others. Each leadership style has its implications. Companies must choose the style whose implications are most compatible with their business needs and the company's core strategy. The contemporary business world is characterized by exponential evolution in technology and the same has gained unprecedented relevance in almost all aspects of a business. Transformational leadership has been most reliable in the tech age, especially for I.T. companies. In this report, a recommendation is being presented that Elon Musk switches from autocratic leadership in his Tesla Company for transformational leadership that empowers employees to be more creative for innovation. Elon Musk has always opened little room for his employees to contribute to decision-making. Despite the excellent progress with his company, it is believed that he would have reached greater heights had he practiced inclusivity in the company. The report will start with analyzing the current leadership situation at the company before proceeding to give reasons for the recommendation and the expected changes if the change in leadership style is effected.
The Musk Journey
Whatever anyone may conceive him to be, Musk is one of the most brilliant brains in the modern tech age and his achievements in recent years can empirically attest to that. He is in the league of other household names, such as Steve Jobs, Jeff Bezos and Mark Zuckerberg, who have made the most of the technological evolutions that the world has seen in the last three decades (Vance & Sanders, 2015). Before founding Tesla, he had successfully come up with startups such as SpaceX, Neuralink and The Boring Company and the companies are still operating. He is an ambitious and robust character who never sleeps on his laurels, always taking on new opportunities and reaping the highest possible benefits (Musk, 2021). This attitude has paid and currently, Forbes has ranked Musk as the wealthiest person globally, now above Jeff Bezos, who had gotten to the helm in 2021 (Kroll & Dolan, 2022). And given the pace at which his companies are growing, it is believed that Musk will become the first individual to have a net worth of $1 trillion by 2024 (Kroll & Dolan, 2022). But does such success necessarily mean that he is the best leader? Does it mean that there are no better leadership styles he could adopt and have his company operating more efficiently and effectively?
Autocratic Elon Musk
Musk has been variously regarded as one of the most toxic and notorious CEOs of his era and even employees in his companies have complained of his attitude towards work (Yauney, 2018). He deploys a combination of autocratic and transactional leadership styles. Though they achieve the intended financial and growth results, they overly leave the employees demotivated, disloyal and waiting for the next appropriate ship to jump into. Autocrats generally want to make decisions on as many aspects as possible (Kuśmierska, n.d). They rule with iron fists and every activity-taking place for them is a transaction between them and the employees. It must proceed as agreed and close exactly when it is scheduled to be completed. In 2017, an ex-employee at Tesla exposed that every employee in Tesla was having an abusive relationship with the boss and that set ground for debate on why such a boss can afford to keep innovating with such a demoralizing attitude towards his workers (Akter et al., 2021). This triggered The Wallstreet Journal to interview him, and when asked about the expose, he owned up to his style and said that he is a Nano-manager who understood his product-related issues and he always knows what is wrong.
Another Tesla ex-worker responded to the interview outcomes by backing up the claims made by Elon Musk through an article published by Business Insider. He went ahead to claim that Musk's control-freak tendencies are the core reason he left Tesla for another employer (Hamed, 2021). He claimed that at Tesla, Musk was the sole decision-maker and anyone objecting to his decisions could quickly get fired. Not all people have problems working with dictators, though another Tesla ex-employee used the same media to defend that while Musk wanted everything done his way, 90% of his decisions were right (Dignam, 2019). Therefore, it is debatable whether the I.Q. of such bright individuals places them in a position where they can demand their way on everything or if they should give room for others since it is impossible for them to know everything.
Musk is not the first genius of his type and Steve Jobs had to leave Apple, a company he founded when he could not forge a cohesive working relationship with the rest of the management team. Steve wanted everything done his way at Apple, just like Musk, which created an extremely hostile working environment, especially with fellow executives (Elliot, 2012). Apple was founded in 1976, and in 1985, Steve had to leave after losing a boardroom war with colleague John Sculley; he left the company to start another entity, NEXT Inc. He regretted having lured Sculley into Apple and so toxic was the breakup that he poached some of the top talents into his new startup (Steinwart & Ziegler, 2014). Steve would return to Apple in 1996, and in what might discredit Elon Musk's leadership style, Steve came back a reformed CEO who was always willing to onboard everyone in a democratic manner while making decisions (Dubberly, 2012). What followed were years of delightful innovations at Apple and the company has maintained a stable growth path even after Steve passed on in 2011 due to cancer.
Therefore, the scenario with Apple begs the question of where Tesla and other Musk companies would be if he had adopted a more inclusive approach in management whereby all are given a chance to give their ideas on how various functions could be handled (Kroll & Dolan, 2022). Some employees are likely holding great ideas jealously to avoid promoting a man they feel is undeserving of his position. It is also likely that such employees are even counterproductive as they wait for vacancies elsewhere to use Tesla's Internet for job applications too. Since the return of a reformed Steve Jobs, Apple has come up with a new version of the iPhone almost every year (Wu et al., 2018). This is because a think tank was formed and different employees raised ideas on how a current model can be diversified to bring about a better model that will be sold at a higher price and earn more revenues for the company. What if Tesla could come up with an advanced car every year?
Autocratic Leadership
Chukwusa (2018) defines autocratic leadership as one where the person at the top has control over all decision-making and allows minimal input from the rest of the team. Autocrats choose between options based on their judgments, and if they ever accept advice from others, then that will be rare. That is what is being seen from Elon Musk, and it is what the initial Steve Jobs was. And when the style of leadership is most common in small enterprises with few workers, Tesla is establishing itself as a multinational that will have a geographically diversified workforce across the globe (Akter et al., 2021). Such a workforce brings onboard people from different cultures and backgrounds, and it is often a complicated job satisfying all the needs, interests, and emotions of such employees. Musk must therefore change now and practice some inclusivity.
Figure 1: Autocratic leadership
And like other forms of leadership, autocratic leadership has its own advantages and disadvantages. One of the advantages is that it helps deliver fast decisions during emergencies (Kaleem et al., 2013). Operationalization at Tesla is not an emergency at all, even if societies need to act fast to tame the climate crisis. Tesla has all the time to reason together as a team and come up with the best products that will assist them in gaining a better competitive edge against their rivals. Fast decisions from autocrats often help relieve pressure during stressful situations but only during such cases. Not in line with the firm's core strategy (Chukwusa, 2018). Autocratic leadership also helps provide direction for small groups, especially when the group is made of inexperienced members who lack proper organization. There is little need for consultations in such a scenario since knowledge can only go one way. Autocratic leadership offers a transparent command chain that fits in a limited number of scenarios.
One of the downsides of an authoritarian is that he hurts morale among team members. Too much control denies employees the sense of belonging that they need to work diligently and honestly towards helping the organization achieve its objectives (Olayisade & Awolusi, 2021). Workers do better when they are incessantly called to contribute since that makes them feel valued and worthy in the company. This idea is reinforced by the Maslow Hierarchy of Needs Theory, which states that five categories of needs ought to be satisfied, as seen in the pyramid below for employees to be fittest for work (Hopper, 2020). A person can only satisfy the high-level needs after meeting the basic needs located at the bottom (Steinwart & Ziegler, 2014). As seen, belongingness and love needs are 3rd in the hierarchy and an autocratic setting like that in Tesla will not satisfy them. It will hinder the motivation needed by the employees to give their best and move the company to greater heights. Autocrats block inputs from team members and such a breakdown in communication will make it hard for members to contribute creative solutions that can improve products, processes, and the firm's overall image to the market.
Figure 2: Maslow Hierarchy of Needs Theory
Source: (Hopper, 2020)
Transactional Leadership
It was stated earlier that Musk applies a combination of autocratic and transactional leadership. When these forms of leadership have been seen as synonymous with each other, Khan (2017) posits that transactional leaders value order and structure and are best suited for activities such as military operations where there is a need for speed to deliver projected results in time. In such scenarios, the core responsibility of followers is to obey orders and instructions and there are rewards and punishments for what they do. This type of leadership is also called managerial leadership. It entails extensive Management By Walking Around (MBWA) as the leader supervises all the functions taking place within the organization at any given time (McCleskey, 2014). This kind of leadership works for people who have no problems working under strict guidelines and directions. It is unfit for settings where creativity is needed to deliver solutions that will help the firm gain visibility to customers in its industry.
And based on the literary meaning of the word transaction, the leader treats his interaction with those under him as an exchange where both sides give something in exchange for another. The subordinates are expected to provide excellent performances by following instructions strictly and the management offers rewards or punishment for that. According to Antonakis and House (2014), too much on fixed rules, standards, and procedures does not catalyze growth and change for the firm. They often work to help the company maintain the status quo and achieve projected short-term results with little focus on the organization's long-term needs. According to Kaleem (2013), such thinking is incompatible with the business needs of the contemporary business world that are characterized by cut-throat rivalry in an extensively globalized world where all industries have gone massive and technology demands changes in almost all business aspects.
Research outcomes have concluded that transactional leaders are most appropriate for settings where tasks and responsibilities are simple and straightforward for the followers and not in situations where there is a need for creativity that will bring in new solutions (Odumeru and Ogbonna, 2013). Tesla is not such a situation. Tesla wants to innovate and an optimized car from Tesla might need several hundred parts in hardware...