The business world, and its observers, have been awed by Elon Musk’s wild success in business. As you probably know, he recently rose to the rank of second wealthiest man in the world. This is largely due to the increase in market value of Tesla’s stock.
Of course, the meteoric rise in Tesla’s stock price has been, at least in part, due to Musk’s visionary leadership of his team. If we look deep enough in any high-performing company, we nearly always find good leadership.
Recently I came across an article showing an example of Musk’s leadership style. Here’s Minda Zetlin, one of my favorite Inc. contriubutors, describing his recent superb communication with his team.
At Tesla, Inc., every employee has the opportunity to share in the company ownership through stock options. This is important to note in seeing the value of the email Minda describes in her article.
His email says, in essence, “We must not rest on our laurels and get loose with our wealth. We got where we are by producing and selling good electric cars cost-effectively. Our stockholders are betting on our ability to improve that capability. We must not disappoint them.”
He continues, “To maintain and increase our value to investors, including you, we must find ways to improve our cost-effectiveness while maintaining quality. Saving $0.20 or 0.50 per car is significant. Saving $5.00 per car is a home run”.
It mystifies me why so many companies fail to cut their employees in on a piece of the action. They can do that by means of an ownership stake, or a meaningful profit-sharing scheme. What better way to incent them to operate efficiently, and cooperate with their colleagues in that effort?
Businesses succeed long term by producing more value in their customers’ eyes than the prices they charge. They do that through the efforts of team members who produce more value than their wages. That’s how everyone wins in business!
