Elon Musk is the successful CEO of multiple industry-changing companies. This is not only because of his ambitious drive for entrepreneurship, or his strong background in physics and engineering. Nor is it due only to his management style or ability to draw passionate and highly skilled talent from around the world. While these attributes are important–and are in fact true of Musk–what is especially crucial is that he is highly accountable to his companies’ mission as well as to the investors.
In a Tesla-wide email recently obtained by Tesmanian, for example, Musk perfectly demonstrates his staunch accountability to the company’s mission and its stakeholders:
“At a time like this, when our stock is reaching new highs, it may seem as though spending carefully is not as important. This is definitely not true.
When looking at our actual profitability, it is very low at around 1% for the past year. Investors are giving us a lot of credit for future profits, but if, at any point, they conclude that’s not going to happen, our stock will immediately get crushed like a soufflé under a sledgehammer!
Much more important, in order to make our cars affordable, we have to get smarter about how we spend money. This a tough Game of Pennies – requiring thousands of good ideas to improve part cost, a factory process or simply the design, while increasing quality and capabilities. A great idea would be one that saves $5, but the vast majority are 50 cents here or 20 cents there.
In order to make the electric revolution happen we must make electric cars, stationary batteries and solar affordable to all.
Thanks and great working with you as always,
Tesla’s mission is to accelerate the world’s transition to sustainable energy. Thus far, the company has been tremendously successful in jumpstarting this shift. The company’s electric vehicles have been setting impressive sales and performance records, its autonomous driving and active safety software is becoming incredibly advanced and has been shown to significantly reduce the number of accidents, and its solar and stationary battery business has been quickly ramping up, as the products are now more affordable than ever.
And just recently, Tesla’s stock has been on its latest tear, as it was announced that the California-based company would indeed be added to the S&P 500. In this company-wide note, Musk is clear that he greatly values the company’s investors, while underlining the vital importance of assuring the affordability of its cars, solar, and stationary battery products. If Tesla fails to make these products more affordable, the mission cannot be successful, and its investors–and all of us, really–lose. The stakes are simply too great.
As such, Musk, in a move of great leadership, outwardly acknowledges to Tesla’s employees that investors have placed great confidence in the company. And perhaps rightfully so. Yet, despite the company’s success thus far, wisely, he tempers his message, to remind staff that the pursuit of profit must remain a top priority. Essentially, the company and its staff shouldn’t let the accolades or stock price get to their heads; be as smart as possible with spending. This should be true of any good leader, and certainly is the case with Musk.
Indeed, the California-based company cannot afford to be careless or complacent, as the fight to accelerate the world’s transition to sustainable energy remains real and crucial as ever. And in fact, it may only be just beginning. Fortunately, Tesla has an impressive head start–and in its driver’s seat, a CEO who has what it takes to rocket through the finish line.