If Tesla doesn't make some changes, starting with the board, it could spell the end for the company. We believe in Tesla and its mission. We want the company to be successful, but Elon Musk's increasingly disturbing actions have brought the company to a crossroads.
Musk's behavior is costing Tesla in ways that may not manifest in the next quarter or two but will if the board and others in his circle can't rein him in.
There are three ways Musk is hurting Tesla today:
- There's been a clear drain on talent with 13 key executives leaving over the past year. The narrative about being tough to work with as a demanding manager may or may not be true. What seems more likely is that Musk is difficult to work with because of his personality. Furthermore, these executives are largely leaving Tesla to work at competitors, eroding Tesla's competitive advantage in autonomy and electric vehicles.
- The impact on talent isn't just affecting the existing employee base but prospective employees, too. It's likely that prospective executive-level employees are exposed to Musk's personality in the interview process, and the publicity around Musk's actions is likely shrinking the funnel of high-level employees even willing to explore a job at Tesla in the first place. Without talent, Tesla cannot compete, no matter how hard Musk works.
- Musk has built an aura of being a bad-ass billionaire who does what he wants. For the last several years, that's been great for Tesla. More recently, Musk's aura has seemed part jerk, part bully and part liar. He surely isn't winning new fans with how he's been acting. It's more likely he's losing supporters and, since he's the face of Tesla, that means Tesla is losing supporters.
While some may think Musk needs to be fired or resign, Musk is still Tesla. Tesla needs Musk because, to his point a few quarters ago, the company's sustainable advantage is its ability to innovate faster than anyone else. Musk is the spirit of innovation at the company and, in the face of multiple new entries into the EV space, now is the time Tesla can least afford to lose its spirit of innovation.