Book Excerpt: Why Elon Musk’s Outlandish Stunts Work
Excerpted from ‘Innovation Capital, How To Compete And Win Like The World’s Most Innovative Leaders’, with permission from Penguin Random House India.
Whatever your view of Elon Musk, one thing he did when he helped launch Tesla was articulate a lofty vision for the company. “Our goal [is] . . . to accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible,” he wrote. “In order to get to that end goal, big leaps in technology are required.” Musk then laid out his “master plan”—a strategy for launching desirable electric vehicles at the high end of the market followed by affordable electric vehicles for the mainstream market.
Sterling Anderson, former head of Tesla Model X and Tesla Autopilot and cofounder of Aurora Innovation (a startup that is successfully providing a full-stack self-driving solution for major automakers like Volkswagen and Hyundai), says that Musk’s success as an innovative leader stems largely from a reinforcing cycle of success triggered by an exciting and inspirational vision:
Elon understands people. He understands that a lofty vision, an inspirational vision, attracts world-class people, particularly world-class engineers. With those world-class engineers, he’s able to build a better product.
That better product attracts customers and attracts investors, and it’s self-reinforcing. As this feeds on itself, engineers are increasingly inspired to join, not only because of the lofty vision but also because of the increasingly strong brand behind it. These conditions attract increasingly strong talent; it feels good to work there and to be viewed as someone who is helping drive innovation toward that lofty goal.
Without prompting, Anderson independently has described the same virtuous cycle that we have seen many leaders utilize with positive results. This cycle includes the following steps:
1. Identify an exciting, lofty, even inspirational vision. The vision needs to solve an important problem, pursue a big opportunity, or just be exciting.
2. The lofty vision attracts talented human capital (e.g., better engineers and scientists) who want to work on something exciting. It also attracts investors and/or resources from organization leaders who provide the resources and senior sponsorship needed to launch a successful innovation project.
3. The talented human capital increases the odds of developing a better product and customer experience. Put simply, talented people going after a lofty vision produces better results for the customer.
4. The better product or customer experience attracts customers. The increase in happy customers leads to the creation of a valuable, hopefully innovative, reputation. Customers of companies or brands with an innovative reputation experience “identifcation”—which means their personal identity gets tied up with the products and brand which makes them much more loyal and valuable customers.
Going back to step number two: talented human capital and investors are attracted to companies and projects with a valuable brand and loyal customers. Thus, the cycle repeats.
Musk’s history of launching new ventures reveals that he has purposely ignited this cycle in many of them. For example, when founding SpaceX, he established a mission for the company, which was “to revolutionize space technology with the ultimate goal of enabling people to live on other planets.” When Tesla pursued the Powerwall—a product that uses Tesla batteries to power homes and utilities (and, of course, to charge your Tesla vehicle)—Musk announced that “our goal here is to fundamentally change the way the world uses energy.” When he announced his idea for Boring (a transportation infrastructure company), he articulated a vision of creating a “3D transportation network of tunnel infrastructure for cars and high speed trains” to relieve congestion problems in big cities (see www.boringcompany.com for a cool video on how it works). Pursuing big and important problems has been the starting mechanism for a cycle of success that Musk has deftly deployed multiple times. Musk acknowledges that “I like to be involved in things that change the world.”
But the cycle isn’t unique to Musk. We saw a similar pattern in other innovative leaders we examined. As Jeff Bezos launched Amazon, he said, “What we want to be is something completely new. There is no physical analog for what Amazon.com is becoming.” When Marc Benioff launched Salesforce—one of the first enterprises of ware systems born in the cloud—he boldly proclaimed “The End of Software” as a tagline. Jeff Weiner of LinkedIn talks about the company’s mission to connect everyone on the planet and to “create economic opportunity for the global workforce of three billion people.” But it wasn’t just founders of new companies. We also saw less well-known leaders deploy this strategy effectively.
Painting an exciting vision for a venture was an important first step to innovation leadership for the people we studied; the vision triggered the virtuous cycle of innovation leadership shown in figure 7-1. The leaders weren’t always conscious of the cycle but seemed to intuitively understand the wide-ranging benefits of painting a vision for projects that made the ventures seem exciting and important. Of course, some of the painting involves telling stories to make an emotional connection, as described in chapter 5. Paul Polman, former CEO of food products company Unilever, talks about how one in ten people in the world lack clean water, and he describes Unilever’s vision of using clean- water technologies to solve this problem. Nike’s founders and current CEO Mark Parker have discovered that they can create an exciting vision out of “serving the athlete” (Nike defines every one as an athlete) to inspire athletes to “just do it” and achieve better athletic performance.
In this chapter, we examine effective innovation leadership at the team or project level and, more specifically, the elements of the virtuous cycle of innovation leadership. (In chapter 8, we will address innovation capability and innovation capital at the organization level). We’ll start by examining visionary leadership, a term that you have probably heard many times before. What does it mean to provide visionary leadership? How do you avoid common mistakes that can terrify, rather than inspire, those you lead? We’ll then discuss recruiting the human and financial resources you need to pursue the vision and how great leaders design the problem-solving process and culture within the team to build innovative solutions. But it all starts with “the vision thing.
Jeff Dyer is the Horace Beesley Professor of Strategy at Brigham Young University, Nathan Furr is an Assistant Professor of Strategy at INSEAD, and Curtis Lefrandt is CEO and Co-Founder of Innovator’s DNA.
The views expressed here are those of the authors and do not necessarily represent the views of BloombergQuint or its editorial team.