On Aug. 7, Tesla founder and CEO Elon Musk tweeted that he’d secured funding to take his company private at $420 a share. This statement was untrue, and illegal. Within days, he faced an SEC lawsuit, which he settled by stepping down from company chairmanship and paying a $20 million fine. Tesla paid a separate $20 million fine for failing to police Musk’s tweets, and their share price hit at an all-time low.
I haven’t met Elon Musk. I don’t know him personally and haven’t worked with him professionally. I haven’t offered Musk any executive coaching or leadership advice for running his many companies, but that hasn’t prevented me from learning a lot about him.
His persona dominates news reports and social media. We know about Musk’s humanitarian programs. We know who he’s dating. We know when he smoked marijuana on Joe Rogan’s podcast. We know that Musk tried to design a submarine to rescue a Thai youth soccer team trapped in a mine–and that he reacted poorly when his plan was turned down.
I’ve been an executive coach for almost two decades. I’ve helped leaders from Fortune 100 companies and venture-backed growth businesses develop the necessary skills to manage fast-paced environments. But if Elon Musk tried to hire me, I’d be concerned. Executives who adopt his leadership style rarely want to change–they often believe their behavior–no matter how erratic or unconventional–is what made them successful in the first place.
All the same, if Musk or any CEO in his position showed a willingness to change, I’d have the following advice for them:
Self-management and verbal discipline are crucial.
In the context of leadership, self-management refers to how your public image is tied to a brand, for better or worse. It requires a degree of verbal discipline where you speak in measured ways that can’t be misinterpreted or misconstrued. It’s the ability to avoid saying the first thing that pops into your head. Especially when it’s an emotional response to criticism.
When you’re running a major company–let alone three–everything you say is put under a microscope. It doesn’t matter whether you’re speaking to the press, chatting at work, or cutting loose with friends. You are a leader. Someone is always watching and listening. Your words and actions are amplified, which has consequences for your brand and employees.
Ignoring self-management has benefits, but it’s also dangerous.
Second, I’d strongly advise leaders to resist any urge to throw caution to the wind. For some, this approach is attractive and rewarding. But it’s also a double-edged sword that can harm your company.
There are certainly benefits to abstaining from self-management. Leaders who lack this skill aren’t constrained by social norms, freeing them to think outside the box. In limited situations, it can lead to major innovations and breakthroughs everyone else considered impossible.
The problem comes when self-management is applied selectively. When a leader lacks verbal discipline at work, they probably aren’t using it elsewhere. All social norms start looking like a barrier to break, until someone else finally remembers why those norms exist in the first place. That’s usually when an offending leader is forced to step down, and Musk is no exception.
Leaders who lack self-management aren’t unique. Uber CEO Travis Kalanick left the company amidst a wave of scandal. Steve Jobs had a reputation as a terror among Apple employees, and fellow executives briefly forced him into a position without authority before he resigned in 1985. Such personality traits also apply to politics–you might even say they’re presidential.
In Musk’s case, it’s entirely possible his behavior is strategic. His antics often aren’t highlighted in relation to SpaceX–which is an enterprise business–but on the consumer-focused Tesla. His controversial acts have allowed him to cultivate a loyal fanbase on Twitter. For the vast majority of people who aren’t corporate executives, it helped him seem relatable, and perhaps even made them consider buying a Tesla.
If Musk doesn’t change course, his $20 million fine will seem mild.
Receiving a $20 million fine and losing his role as Tesla’s chairman may seem like a major consequence, but he’s lucky it wasn’t worse. There are worrying signs that Musk hasn’t learned his lesson: He continued to mock the SEC via Twitter after paying his fine.
Musk still maintains his CEO position at SpaceX and remains one of the wealthiest men in the world. The SEC settlement may just be a minor setback in his eyes. He certainly wouldn’t be the first leader who believed his personal brand insulated him from long-term consequences.
Historically, this doesn’t last. Similar leaders can see great success for an extended period of time, as setbacks miraculously give way to new opportunities. But such behavior also leads to falling share value, which can be difficult to overcome when such conditions persist. Eventually customers start to realize that the relatable persona you’ve cultivated is actually an illusion. When that happens, the leader often experiences a spectacular fall from grace, usually in the public eye.
Self-management is the best way for Musk to fix his public image.
Finally, I’d tell Musk that it’s not too late to turn everything around. He wouldn’t be the first executive to be ousted from his position and make a comeback. Steve Jobs accomplished this when he was re-named Apple CEO in 1997.
Despite his initial outbursts and resignation, Jobs clearly learned from his mistakes. He managed to cultivate a new personal image that mirrored Apple’s products and restrain his outbursts. His reward was a triumphant return to Apple just as a new generation of tech-savvy customers were ready to embrace the iPhone. That image is now a significant part of his legacy, despite public knowledge of his past behavior.
This is also possible for Musk but achieving it will require self-management and verbal discipline. Will he adopt this approach? I have no idea.
After all, I don’t know the man.