Elon Musk by Walter Isaacson: An Uncomfortable Sense of Urgency

A complex human leading the world into a complex future

Sometimes you read about someone, and you wonder if they are human. Having just read Walter Isaacson’s latest work, Elon Musk tends to fit that description. This book made me grapple with some challenging philosophical questions whilst providing some exceptional lessons in how to run the operations of a complex machine.

Inertia

Newton’s First Law of motion, which describes inertia, reads as follows: A body remains at rest, or in motion at a constant speed in a straight line, unless acted upon by a force. Change is an uncomfortable process and is typically avoided at all costs. This resistance typically gives rise to suboptimal outcomes because there is often not enough free energy in a system to adapt (for more on this topic, check out Inadequate Equilibria).

When tackling challenges of climate change, artificial intelligence, free speech, and planetary dependence, how do you overcome inertia on the appropriate scale? The answer is you rock the boat. You rock it so aggressively that people despise you and you nearly sink the boat (see sections on Twitter in the book - scary stuff). Elon Musk – love him, hate him, respect him, disregard him – is a force of nature acting upon many objects to overcome inertia. Sometimes you need some crazies to break things.

“The people who are crazy enough to think that they can change the world are the ones who do” – Steve Jobs

Balance and Duality

But there’s an important question to be answered. Can you change the world and not be an asshole doing it? The same thought occupied my mind whilst reading Isaacson’s biography of Steve Jobs a few years ago.

To be honest, I don’t know the answer, but I’m probably leaning in the direction of no. Meaningful change occurs when someone is non-consensus right. If you’re consensus right, you’re achieving nothing more than market returns. For tackling world-scale problems, that doesn’t cut it. When going against the grain, some people are going to hate you, and in Musk’s case, probably more than some. In his world, feelings get in the way of progress and political correctness does not feature.

Is this wrong? To some extent, you almost want to give some people the license to move very quickly, break things, offend people, learn, and then course correct. But what about the adverse impact on other people’s lives?

How do we deal with the duality of beings, those with parts light and dark, tightly coupled? You cannot deny Voldemort his immortality without killing Harry Potter. Can we reasonably expect someone like Musk to temper his obsession with progress to protect the feelings of others? I’ll let you decide.

What type of employer do you want to be?

Contracts of employment typically represent a mutually beneficial value exchange. They won’t always be equitable, but they’ll be good enough for both sides. When that dynamic is imbalanced, either the employee or the employer will initiate a separation. Working for Musk requires significant personal sacrifice. He regularly required his engineers to work ungodly hours and was not shy to be publicly brutal in his feedback and firing practices. You cannot not take that home with you.

Great leaders can make people go beyond what they thought possible. Channel that influence towards a meaningful cause or mission, and you can move mountains. That power gives you a degree of implicit agency over others. With great power comes great responsibility. I won’t comment on people’s choices to work for him, but it made me think of some questions worth reflecting on as an employer:

• Are you comfortable keeping people away from their families in pursuit of a “mission”?

• In a professional setting, what is a “mission”?

• Do your employees have full agency over their decisions to pursue or not pursue this “mission”? This could be a function of incomplete information or financial burden.

• If you knew they didn’t have full agency, would it impact your decisions?

The Price of Success

You will see this lesson from Jack Ma repeated in my writings. Know where you are, know where you want to be, and know what you’re willing to give up to get there. This book was equal parts inspiring and off-putting. We’re quick to idolize public success without knowing the related private sacrifice. Everything in life is a trade-off and it’s important to know what trade-offs you’re willing to make.

Optimizing the Flow of Information

Customers have siloed experiences when engaging with siloed organizations. Although decoupling functions has its benefits, you typically pay for it in user experience. Musk obsessed over breaking down siloes to force his product designers and engineers to work together as closely as possible. He also made people experience the consequences of decisions. At Solar City, for instance, he made designers install roof tiles, so they understood the operational consequences of their decisions further down the supply chain.

This made me think of the dynamic equilibrium notion from Loonshots. To foster innovation and be economically viable, firms should comprise executors (soldiers) and creators (artists). Importantly, ideas and feedback need to flow quickly and freely between these groups, termed “dynamic equilibrium”. With tighter coupling, Musk achieved rapid feedback loops, greatly expediting progress, surfacing issues, and spurring innovation.

Run Fast, But in the Right Direction

Musk admits to making many mistakes in building Telsa and SpaceX. In particular, he obsessed over creating production lines that were fully automated. He soon realized, however, that optimizing an incorrect process can be counterproductive. To institutionalize this approach, he came up his five-step Algorithm, to improve processes and operations throughout his businesses:

1.     Question every requirement (in his words, the only rules are the laws of physics, everything else is a recommendation.)

2.     Delete any part of the process you can

3.     Simplify and optimize

4.     Accelerate cycle time

5.     Automate

We’ve all made the mistake of going straight to number five. Automation is a dangerous buzzword.

A Maniacal Sense of Urgency

Great leaders “never let a good crisis go to waste”, but sometimes crises are few and far between. Great leaders also know how and when to manufacture a crisis. Musk did this whenever he was unhappy with the pace of progress, triggering one of his infamous “surges”. If you’re not familiar with Parkinson’s Law, it’s very closely aligned – “work expands so as to fill the time available for its completion”. Tight deadlines are powerful things.

Build the Machine that Builds the Machine

Other car companies can build electric vehicles, but they can’t do it like Tesla. Conventional start-up wisdom is to rapidly iterate until you have a product that people want. Thereafter, it’s about building the machine that builds the machine. Without scale, Tesla was a great product without a sustainable business model. The team had to build out and optimize its production function to transition from a great product to a great business.

Product-led Growth

At the time of writing, Tesla had not spent a cent on advertising. This is wild. If your product is great enough (orders of magnitude better than existing), it will grow on its own. I back this notion for revolutionary products, but it’s perhaps worthless advice for incrementally better products that are more traditional in nature.

KPIs, Culture, and Making Work Visible

Rockets and electric cars have countless, highly customized parts with complex supply chain. Musk uses an “idiot index” which measures how much something costs in raw format versus the end product. The higher the differential, the higher the part ranks on the index. This simple metric allowed his teams to focus on areas in the production line that would move the needle financially.

To remedy Telsa’s underperforming production lines, Musk created KPIs for each stage of the production line and then installed red lights above the station. During that period, he would painstakingly stalk the floors of the factory. Whenever a KPI was not met, the red light would flash above the station. He’d immediately approach the station and investigate the issue in what became known as “walk to the red”. This highly effective approach is very much in line with the famous Toyota Production System (TPS).

Hiring and Staffing: How to Be Less Wrong and Lean

The magnitude of the layoffs and disruption when Musk took over Twitter was horrifying. To guide their firing, his team focused on three key criteria:

1)     Competence

2)     Trustworthiness

3)     Work Ethic

This is very similar to a list someone told me a year or so ago:

1)     Intelligence

2)     Ethics

3)     Energy

Having a final checklist or North Star when hiring is critical. It’s important to remember that hiring decisions are subjected to high degrees of information asymmetry. Hiring processes should be less about finding the right person and more about reducing the probability of hiring the wrong person.

I mentioned Parkinson’s Law earlier. I believe this applies to staffing, too. When poorly managed, headcount will expand to fill the allowable budget. At Twitter, Musk culled aggressively to the point of falling over. A small team of highly motivated and competent people will always prevail. I agree wholeheartedly with this sentiment.

“Never doubt that a small group of thoughtful, committed, citizens can change the world. Indeed, it is the only thing that ever has.”

― Margaret Mead

Book Recommendation

I much preferred Isaacson’s biography of Steve Jobs, but this book forced me to think. People and situations on the extremes often make you do so. If you’re looking for an uncomfortable window into the world of a non-consensus genius, give this book a read.