Elon Musk – Leadership Lessons: Fire or Inspire?
Carmen Hughes
Image Credit: Olivier Carré-Delisle
Elon Musk’s acquisition of Twitter has set the social media platform on fire. How the tale unfolds is anyone’s guess. Undoubtedly, Elon Musk’s leadership at Twitter will become a classic case study. We wrote about Elon Musk as a thought leader, and with the recent Twitter saga, we’re revisiting the topic of Musk’s leadership.
Since early Q2 of 2021, the market has seen large-scale layoffs. To date, almost 100,000 people have received pink slips, becoming casualties of an economy teetering on a recession, rocked by record-high inflation and rising interest rates, topped off with the stock market’s across-the-board correction.
While layoffs are always bad news, some CEOs, like Stripe's Patrick Collison and Meta's Mark Zuckerberg, have recently demonstrated exemplary executive leadership in communications. Their layoff announcement letters to employees underscored how these CEOs held themselves accountable for mistakes and layoffs. They addressed detailed answers to anticipated employees' questions clearly and thanked them empathetically for their dedication and service. Compare their leadership to Musk’s handling of the Twitter layoffs; there’s a lot to unpack in how Musk handled the downsizing and some learning lessons.
Over the years, Elon Musk has been a trailblazer with his bold vision of redefining the automotive market with Tesla, reinventing rockets with SpaceX, and reimagining intra-city transit systems with The Boring Company; what's not to love? Musk has become a larger-than-life figure, garnering a massive fanbase along the way with his game-changing vision and entrepreneurial successes. He’s turned off many, however, with his shoot-from-the-hip leadership. His management style and 'hardcore' demands aren't isolated to Twitter either. With his leadership on display to millions via his new megaphone, Musk has quickly become a polarizing figure.
5 Lessons to Learn From Elon Musk’s Leadership at Twitter
Demonstrate Empathy Toward Employees
Before Musk acquired 16-year-old Twitter, the company had 7,500 employees who had worked years or, in some cases, spent their entire careers there. Employees were familiar with Twitter's culture, norms, and policies. Twitter had developed a culture that encouraged open communication. Yet, within days of the acquisition completing, Musk fired 20 employees because he didn't like that they expressed their opinions publicly. Musk then mocked them on Twitter. It's bad enough for Musk to fire these employees but then to mock them publicly on a global platform takes it to another level, unbefitting a CEO of Musk's stature.
As Musk told investors that he planned massive workforce cuts, employees were already highly stressed. What if, instead, he exhibited more transparency and empathy toward employees? He could have underscored that, even if he hadn't acquired Twitter, significant workforce cuts were inevitable under the previous management team. He could have taken the opportunity to acknowledge and thank employees for their dedication and efforts. He could have explained the company's challenges but also painted his vision of Twitter 2.0 with them.
There are several things Musk could have done differently to recognize employees’ efforts with more grace. Instead, less than one week into the acquisition closing, Musk’s handling of the layoffs was impersonal. Employees received an initial email, not from Musk – or anyone in particular – but from "Twitter," informing them that if they received a message in their personal email address, they were essentially out of a job. Employees laid off received a subsequent letter with details about the severance package, also signed "from Twitter."
Using Social Media When Millions Follow
Elon Musk’s takeover of Twitter has dinged his leadership and image. As the new CEO of Twitter, instead of walking a fine line to win over advertisers, Musk engages in bizarre ways. As Twitter’s CEO, he's shared false conspiracy theories, fabricated news and openly chats with conspiracy theorists, election fraud deniers and other alt-right channels and trolls. Musk creates and shares offensive memes, sprinkles sexual emojis into his tweets and flaunts symbolic cartoons associated with the white supremacist movement. His casual indifference to laid-off employees and continued antics on Twitter are repelling advertisers and other stakeholders. As CEO of several respected companies, his conduct isn’t amusing or acceptable. Musk can do better.
Do What you Say
To calm nervous advertisers, Musk preemptively gave assurances that Twitter would develop a "content moderation council" before making any "major content decisions or account reinstatements," including Donald Trump’s banned account. Musk’s stance as a free speech absolutist worried advertisers and users that reinstating Trump's account would reintroduce a level of abuse that Twitter's former content moderation team had kept in check. Yet, despite Musk being one of the most vocal critics of Twitter's spam bot problem, he ran a 24-hour poll on Twitter about reinstating Trump. Bots aside, after the survey, Musk promptly reinstated Trump's account. Within hours after Musk took the helm, several organizations tracking the platform shared that hate speech and racist and anti-semitic content spiked. Musk also recently fired more employees just before Thanksgiving. These were employees who agreed to work hardcore hours. Musk's leadership style of saying one thing and then doing another is damaging Twitter’s reputation, eroding trust in Twitter and Musk, and making it challenging to attract and retain talent.
Know Your Customers
Elon Musk's personal brand is intertwined with Tesla and SpaceX's brands. Some customers purchase Tesla cars and Tesla products, while others buy Tesla stock. As Twitter’s new owner, Musk is now broadcasting his political leanings on the platform (i.e., "I recommend you vote Republican."). Proclaiming his politics will inevitably clash with many pro-environmentalists and climate change supporters, who are generally the target customers purchasing Tesla's products and also investing in Tesla's stock. By extension, the Musk backlash extends to Tesla's product line of solar roofs, solar panels and power walls. And Tesla's stock is getting hammered, hitting a two-year low in late November. With Musk continuing to share his creative memes and flippant tweets, his behavior on the platform is turning off current advertisers and other stakeholders. Contrast Musk's current leadership with other tech CEOs who recognize their leadership role to grow their company's value, maintain goodwill and inspire confidence in all stakeholders.
Inspire Instead of Fire
Elon Musk's infamous 'ultimatum' was a clear threat to Twitter employees that they either agree to commit to 'hardcore' long hours or be laid off. Musk layered onto his threat that "only exceptional performance will constitute a passing grade." His added statement left employees to interpret this vague comment. What defines exceptional performance anyway? What’s the upside if they stayed and worked hardcore, long hours? Would employees receive more pay or new equity in Twitter? What happens if they don’t get a passing grade? Musk’s ultimatum resulted in approximately 1,200 employees resigning.
Again let’s imagine if Musk had exhibited an entirely different leadership approach. Musk is among the few executives with a track record and personal brand able to attract swarms of tech talent. Musk could have elaborated on his vision of the new Twitter 2.0. Would it be like WeChat on steroids? Whatever his vision of Twitter 2.0, no one knows because he still hasn't communicated it. He could have taken the time to meet with Twitter's core teams to hear their concerns about the platform and ideas to improve it.
Here’s a man who can build and launch rockets (and a Tesla roadster) into space and reinvigorate the public's and government’s interest in missions to the moon. He is a pioneer who lit a fire under the auto industry executives to get going with electric vehicles. Musk missed the opportunity to inspire employees about his new Twitter 2.0 moonshot. Many would have gladly signed up, slept under their desks, and worked hardcore hours without additional monetary incentives. Many people hope Musk will tap experienced talent to help him navigate, move mountains and succeed in creating Twitter 2.0.
Can Musk regain the trust he’s lost and rebuild his reputation? Repairing a tarnished reputation is possible but requires work, dedication, and a commitment to learning from one’s mistakes. Until Musk is ready to do a significant reset, take responsibility for his actions, apologize to those affected, and make amends where possible, over time, he can rebound. The Twitter acquisition is much more than the $44 billion+ currently riding on the table. The question is, does Musk care enough to do a course correction?
“Vincit qui se vincit” - He conquers who conquers himself.
