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Elon Musk - Failure is an Option

Presentation · March 2017

DOI: 10.13140/RG.2.2.33624.70407

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Patti Gilbert-Bonner
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Source(s): Lauren N. Padgett, "Elon Musk: Transformational Leadership in Action." Blog on
Leadership. (March 26, 2015).
Introduction

While most corporate governance focuses on minimizing risk, Elon Musk remains quite

successful because he is a venturesome visionary who welcomes risk, and even failure, as the

conduit to successful invention. To be effective in the leading technology industries of the

21st Century, Musk has continually grown and utilized his leadership and communication skills

to “actively and devotedly work on finding solutions” to major global problems.

In the past decades, achieving sustainability as quickly as possible has become paramount

in today’s society. The term sustainability is concerned with how biological systems embrace

diversity within the ecosystem and indefinite productivity, in a specific sense. The ingenuity of

Elon Musk has encompassed the broader meaning of sustainability, by incorporating the

endurance of systems and processes into the foundation of his ventures.

 Gilbert-Bonner 2

Background and Education

Elon Musk was born and raised in South Africa. As a youth, Musk longed to obtain

citizenship in the United States. As a young adult, Elon Musk immigrated to Canada where he

became a citizen through his mother’s lineage. A Canadian citizen, Musk performed manual

labor in several jobs and positions to make a living.

The educational background of Musk tells of his determination to succeed. Most sources

pick up with his initial attendance at the Queens College in Canada. After a short time passed,

reports say, “Before completing his degree [Musk] came to the United States as an international

student.” 1 A continued pursuit of business knowledge and applied science led Musk to complete

undergraduate studies through a Bachelor of Science in Business from the Wharton School

(University of Pennsylvania) and, later, a Bachelor of Arts in Economics and Physics from the

University of Pennsylvania, proper. 2

Career

Once Elon Musk’s childhood dream of reaching the United States was accomplished, he

“made his way out to Silicon Valley, gained legal authorization to work” through a visa and,

with the aid of his brother, began his first business venture called Zip2. Shortly, thereafter, Musk

became a United States citizen in 2002, sold Zip2 to Compaq, and cofounded X.com as a

pioneering company facilitates payments through cyberspace. 3 Musk’s transferred his ingenuity

to PayPal, who bought the X.com website as a template to become an exemplary online financial

services provider.

1. Stuart Anderson, "International Students Who Started Billion-Dollar Companies."

International Educator 25, no. 4 (2016): 6,
https://www.nafsa.org/_/File/_/ie_julaug16_frontlines.pdf.
2. Ibid., 5.
3. Ibid., 6.
 Gilbert-Bonner 3

From this entrepreneurial launch pad (no pun intended), Elon Musk became the founder

and CEO of Tesla Motors, SolarCity, and SpaceX. 4 The latter subject has become the foremost

subject involving Musk in today’s media. As the 2002-founder and CEO of SpaceX, Musk has

imposed an important landmark in recent history for the SpaceX company. On December 22,

2015, “the company “successfully landed an unmanned rocket upright, after sending 11 satellites

into orbit.” 5

Elon Musk released a whitepaper titled Hyperloop Alpha Paper to generate conversation

about a “fifth mode of transportation faster than commercial air travel, more energy efficient

than train travel, and as accessible as a personal automobile.” 6 Musk prompts discussion on this

topic because he feels the “bullet-train initiative” in California will be one of the most expensive

ventures of its type – and one of the slowest in the world. 7 These examples of recycling and

conservation propose innovation - on a universal scale, if you will – and they serve as only the

beginning sustainability enterprises which are Elon Musk’s hallmark.

Goals

Musk’s ultimate goal spans a lifetime and has always been entrepreneurship. From the

beginning, he believed the United States would be the best platform to provide such an

4. Joan Marques, "A Mindful Moral Compass for Twenty-First Century Leadership: The
Noble Eightfold Path." The Journal of Values-Based Leadership 10, no. 1 (2017): 6,
http://scholar.valpo.edu/cgi/viewcontent.cgi?article=1177&context=jvbl.
5. Anderson, "International Students Who Started Billion-Dollar Companies." 6.
6. Max Werner, Klaus Eißing, and Sebastian Langton. "Shared value potential of
transporting cargo via hyperloop." Frontiers in built environment 2 (2016): 17,
http://journal.frontiersin.org/article/10.3389/fbuil.2016.00017 from Musk, E., Hyperloop Alpha.
(2013). http://www.spacex.com/sites/spacex/files/hyperloop_alpha.pdf.
7. J. Yarrow, Elon Musk Has Plans for a New, Magical Form of Transportation Called
the Hyperloop. Business Insider [online]. (2013). http://www.seattlepi.com/tech-
nology/businessinsider/article/Elon-Musk-Has-Plans-For-A-New-Magical- Form-Of-
4561606.php.
 Gilbert-Bonner 4

opportunity, and Musk pursued his dream until reaching that target. After becoming a United

States citizen, Musk’s business ventures provided many challenges and risks.

As a leader, Elon Musk has obtained his childhood dream, and is currently compounding

his aspiration – he continues to fashion new goals and dreams and set about achieving them. His

pioneering spirit foresaw hurdles and his intellect found solutions to many of them before they

could become obstacles. In looking and acting beforehand, “he met his goal of bringing about a

huge jump in the popularity and prestige” of more than just electric vehicles – Elon Musk

continues to break through established barriers and think outside of many traditional boxes. 8

The success of Elon Musk is largely attributable to leverage provided by his enhanced

communication skills allowing him to inform, persuade, solicit, and direct inspiration to enlist

“an entire legion of workers to help him realize this vision.” 9

Inspiring Individuals

When asked about his connection to Nikola Tesla, Musk admires the genius of Tesla, but

admits to being a “bigger fan of Edison than Tesla, because Edison brought his products to

market and made those inventions accessible to the world.” 10

8. Amanda Setili, "Does Your Leadership Style Destroy Agility... or Supercharge It?."
Leader to Leader 2015, no. 78 (2015): 58,
http://www.leetsconsortium.com/articles/Does%20Your%20Leadership%20Style%20Destroy%2
0Agility%20or%20Supercharge%20it.pdf.
9. Marques, "A Mindful Moral Compass," 6.
10. Edward Peter Stringham, Jennifer Kelly Miller, and Jonathan R. Clark. "Overcoming
Barriers to Entry in an Established Industry." California Management Review 57, no. 4 (2015):
88-89,
https://www.researchgate.net/profile/Edward_Stringham/publication/283001846_Overcoming_B
arriers_to_Entry_in_an_Established_Industry_Tesla_Motors/links/567ac38a08ae051f9adde88a.p
df
 Gilbert-Bonner 5

Communication Style

Source(s): Asa Mathat, “All Things Digital.”

Pictures are always worth countless words, and those contained in this position paper are

meant to convey the inspiration of the body language conveyed by Elon Musk (i.e., hand

gestures, facial expressions, expectant posture). In addition to body language, Musk’s

communication style is indicative of servant leadership, supportively using conversational and

inspirational tone, very effective in persuasion.

Through effective communication, Musk strives to bring his dreams of “a better future

for humanity” to fruition by achieving and sharing his sustainable ideals. He uses finely honed

skills to communicate through “failures” and lead sustainable innovation, all while learning from

the adventure.

Leadership Characteristics

Elon Musk effectively leads by a complex leadership style incorporating the highlights of

authoritative tactics, though a true servant leader. Using democracy, Musk solicits feedback and
 Gilbert-Bonner 6

participation, but is coercive in achieving compliance, handling crisis, nurturing, and compelling

affiliations and forging emotional bonding within each organization.

Elon Musk has entered the high-end of the markets with many of his ventures, making

quick and rational decisions, all while using real-life operations as educators. 11 Many attribute

Elon Musk’s total business success to tenacity, in the face of continual threats, tempered with a

“reliance on ethical standards.” 12 Others add an attribute of “designing the company’s strategy

to maximize the rate of learning” to Musk’s leadership toolbox.13

A team of Penn State students, collaborating through a Leadership blog as a part of their

Psychology education, provided a realistic analysis of Elon Musk’s leadership style. In a

consensus, Musk’s “leadership behaviors coincide with each of Bennis and Nanus’ four

strategies typically used by transformational leaders.” Vision is inherent in everything “Musk”;

he has always inspired his employees as a social architect; he builds trust with all stakeholders,

even when it hurts; and his creativity is self-evident. 14

In empirical studies concerning other industry innovators, Elon Musk (2013) is proven to

manage objections without breaking stride. Musk is at the front of leaders who “overcome

personal or environmental constraints” which are evidence of “the difficulty of the challenge and

extent of change necessary to achieve their aspirations, as well as the courage needed to face

11. Setili, "Does Your Leadership Style Destroy Agility... or Supercharge It?," 57.
12. Lauren N. Padgett, "Elon Musk: Transformational Leadership in Action." Blog on
Leadership. (March 26, 2015): (last paragraph), https://sites.psu.edu/leadership/2015/03/26/elon-
musk-transformational-leadership-in-action/.
13. Setili, "Does Your Leadership Style Destroy Agility... or Supercharge It?," 57.
14. Padgett, "Elon Musk: Transformational Leadership in Action," (first and second
paragraphs), https://sites.psu.edu/leadership/2015/03/26/elon-musk-transformational-leadership-
in-action/. In Warren Bennis and Burt Nanus. "The strategies for taking charge." Leaders, New
York: Harper. Row (1985); and Northouse, Peter G. Leadership: Theory and practice. Sage,
2012.
 Gilbert-Bonner 7

risks and obstacles in pursuit of their goals” (i.e., constraints included by a coercive

government). 15

Source(s): Lauren N. Padgett, "Elon Musk: Transformational Leadership in Action." Blog on

Leadership. (March 26, 2015).

When Musk is asked what he believes is the most effective leadership trait, his reply is:

I think it’s very important to have a feedback loop, where you’re constantly
thinking about what you’ve done and how you could be doing it better. I think
that’s the single best piece of advice: constantly think about how you could be
doing things better and questioning yourself – Elon Musk 16

Elon Musk is a tenacious, yet sensitive, innovator and leader. An objective look at his

leadership characteristics will produce many specific examples – many sources have noted that

his employees at SpaceX “would follow their CEO into the sun.” He is obviously a very

conscientious visionary, yet he embraces his counterintuitive side when it really counts.

15. Kiko Thiel, "Deviating from Norms to Create Extraordinary Change: Introducing the
Concept of Transcendent Deviance." (2015): 6,
https://weatherhead.case.edu/departments/organizational-behavior/workingPapers/WP-15-
01.pdf. In Elon Musk the mind behind Tesla, Spacex, Solarcity, Tedx interview video,
https://www.ted.com/talks/elon_musk_the_mind_behind_tesla_spacex_solarcity#t-1160586;
quotation from minutes 19:35-20:22.
16. Subha Ramani, "Reflections on feedback: Closing the loop." Medical teacher 38, no.
2 (2016): 206-207,
https://www.researchgate.net/profile/Subha_Ramani/publication/277601928_Reflections_on_fee
dback_Closing_the_loop/links/5601b30208aed9851827ca6b.pdf.
 Gilbert-Bonner 8

Modern leaders are still learning lessons of humility from Musk’s acceptance – and

welcoming - of failures as opportunities to learn, change, and grow. These lessons are crucial for

effective leadership in the ever-changing, ever-evolving, complex reality of the 21st Century.

Source(s): Lauren N. Padgett, "Elon Musk: Transformational Leadership in Action." Blog on

Leadership. (March 26, 2015).

When asked how he is able to innovate at such a grand scale, he talks of the importance

of first-principles reasoning – “boil things down to their fundamental truths and reason up from

there as opposed to reasoning by analogy… which essentially means copying what other people

do with slight variations.” 17

Conclusion

In 2014, “Elon Musk, CEO of Tesla, the electric car company, announced Tesla would

make its patents freely available to competitors,” via the public domain. “Conventional wisdom

holds that patents are essential to keep competitors from imitating innovations,” which is

especially true for smaller startup companies such as Tesla. Historically, conventional wisdom

has been wrong in some cases, altlhough Musk’s unconventional – some would say ingenious -

17. Thiel, "Deviating from Norms," 28.

 Gilbert-Bonner 9

undertakings are quite timely, since the “conditions that make knowledge sharing advantageous

today won’t last forever.” 18

For the Tesla scenario, Musk must operate in the “sandbox” of the American automotive

industry’s “Big Three.” The question arises of why a CEO on the leading edge of innovation

would risk Tesla’s trade secrets and return on investment (ROI)? 19 In answer, Elon Musk’s

historic motivation is to inspire others – carmakers, in Tesla’s case - to stretch and improve the

competition. Using Tesla, Musk’s ultimate goal in making viable electric vehicles is to reduce

the human footprint on Earth. 20 By making the patents for Tesla readily accessible to

competitors, he is facilitating the speed and achievement of that goal.

A man who shows many “examples of transcendent deviance and the extraordinary” is an

inspiration to many. The leadership style of Elon Musk is reflective of that very description, and

he promises “to redefine what is possible, and potentially change the way we view the world.” 21

TIME Magazine says of Musk, “It’s a paradox that Elon is working to improve our planet

at the same time he’s building spacecraft to help us leave it.” But it is true that genuine “vision is

binocular – and Elon Musk is clearly a man who can see many things at once.” 22

18. James Bessen, "History backs up Tesla’s patent sharing." Harvard Business Review
Blog 13 (2014): last paragraph, http://www.hbs.edu/faculty/conferences/2014-strategy-
research/Documents/History%20Backs%20Up%20Teslas%20Patent%20Sharing.pdf.
19. Ibid.
20. Stringham, Miller, and Clark. "Overcoming Barriers to Entry in an Established
Industry," 95.
21. Thiel, "Deviating from Norms," 40.
22. Richard Branson, “The 2013 Time 100: TIME presents its annual list of the 100 most
influential people in the world, from artists and leaders to pioneers, titans and icons,” TIME
webpage, (April 18, 2013): , http://time100.time.com/2013/04/18/time-100/slide/elon-musk/.
 Gilbert-Bonner 10

Bibliography

Anderson, Stuart. "International Students Who Started Billion-Dollar Companies." International

Educator 25, no. 4 (2016): 4.
Bessen, James. "History backs up Tesla’s patent sharing." Harvard Business Review Blog 13
(2014).
Branson, Richard, “The 2013 Time 100: TIME presents its annual list of the 100 most influential
people in the world, from artists and leaders to pioneers, titans and icons,” TIME
webpage, (April 18, 2013).
Marques, Joan. "A Mindful Moral Compass for Twenty-First Century Leadership: The Noble
Eightfold Path." The Journal of Values-Based Leadership 10, no. 1 (2017): 7.
Ramani, Subha. "Reflections on feedback: Closing the loop." Medical teacher 38, no. 2 (2016):
206-07.
Setili, Amanda. "Does Your Leadership Style Destroy Agility... or Supercharge It?." Leader to
Leader 2015, no. 78 (2015): 56-61.
Stringham, Edward Peter, Jennifer Kelly Miller, and Jonathan R. Clark. "Overcoming Barriers to
Entry in an Established Industry." California Management Review 57, no. 4 (2015): 85-
103.
Thiel, Kiko. "Deviating from Norms to Create Extraordinary Change: Introducing the Concept of
Transcendent Deviance." (2015).
Werner, Max, Klaus Eißing, and Sebastian Langton. "Shared value potential of transporting
cargo via hyperloop." Frontiers in built environment 2 (2016): 17.
Yarrow, J. Elon Musk Has Plans for a New, Magical Form of Transportation Called the
Hyperloop. TSLA. (2013).

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