Musk’s Crisis-Driven Management: Repeating Tesla’s Approach at Twitter?

What Musk is doing at Twitter now is what he previously did at Tesla and SpaceX. Robin: ‘Elon Musk’s management techniques may be an excellent entrepreneurship and growth strategy for a fast-growing startup. Whether they also suit a stable, mature industry and company such as Twitter remains to be seen. Alternatively, he may have deliberately created the current chaos to force a massive transformation of a mature, stable, slow-growing, lifeless company.’ --- Editor’s note: Mass layoffs, sleeping at the office, harsh rhetoric, warnings of imminent bankruptcy—Musk has his own management strategy. Former Tesla senior engineering manager David Deak says Musk creates these situations to make people nervous and spur action. Santa Clara University management professor Tammy Madsen sees clear similarities to Tesla and SpaceX. But will those methods work at Twitter? That remains unknown: the others were early-stage businesses, while Twitter is mature. Musk nevertheless appears confident, saying that after restructuring he will spend less time at the social-media company. --- Elon Musk slept at the office, fired employees and executives at will, and lamented imminent bankruptcy. It was 2018, and the company was Tesla, struggling to build its mass-market Model 3. ‘It was excruciating,’ he told The New York Times. ‘Sometimes I did not leave the factory for three or four days.’ After Musk’s US$44 billion acquisition of Twitter, that experience appears poised to recur. He developed a playbook to get Tesla and rocket maker SpaceX through difficult periods: alarming rhetoric urging employees to set aside family and friends and devote everything to the mission. He has used many of the same tactics at Twitter, upending it within weeks. The 51-year-old CEO has cut 50% of Twitter’s 7,500 employees and accepted at least 1,200 resignations. Two people familiar with the matter say another layoff round began Monday. He says he sleeps at the San Francisco office and has told staff bankruptcy is possible if he cannot turn things around. Anyone wanting to work at ‘Twitter 2.0’ must commit in writing to his ‘hardcore’ vision. David Deak, responsible for Tesla’s battery-materials supply chain as a senior engineering manager from 2014 to 2016, says Musk is clearly good at handling the present survival environment. ‘He creates these things to get people nervous and moving.’ Tammy Madsen of Santa Clara University likewise sees similarities to Tesla and SpaceX. But it is unclear whether he can inspire social-media employees as he inspired those replacing gasoline cars or sending humans into space. ‘Tesla and SpaceX have always been high-risk, high-reward,’ she says. ‘Twitter’s risks have always been high, but what is its reward?’ Musk did not respond to requests for comment. Two people familiar with events say he met Twitter sales staff Sunday, then fired sales employees Monday. They add that sales executive Robin Wheeler was dismissed late the previous week. Bloomberg had earlier reported possible further layoffs. Twitter is also contacting departed engineers about returning, people familiar with the matter say. One attendee says Musk told employees Monday that no further layoffs were planned. Claims of imminent bankruptcy recur at Musk’s companies. In December 2008, at the financial crisis’s worst point, he completed a US$50 million Daimler investment in Tesla, saying the company was about to go bankrupt. He has said similar things about SpaceX, suggesting both companies originally had more than a 90% chance of being worth nothing. A former SpaceX executive recalls Musk saying in 2017 that the company needed a rocket launch every two weeks or risk bankruptcy. Speaking anonymously for fear of retaliation, the executive said bankruptcy threats motivated a company pursuing multiplanetary life. SpaceX has since launched many rockets and landed them safely. Yet Musk returned to a familiar position last year, tweeting that bankruptcy was ‘not impossible’ if a severe global recession dried up funding. ‘Only the paranoid survive,’ he wrote, quoting former Intel CEO Andy Grove. Two former Tesla executives say the crisis atmosphere and self-imposed pressure give Musk a rationale for sweeping changes, senior dismissals, or mass layoffs. They also prepare survivors to work in extreme conditions to meet his wishes. Twitter has dismissed thousands. Deak calls Musk’s behavior there ‘classic Musk.’ The chaos is familiar to former Tesla workers during the Model 3 production ramp. The car went on sale in 2017. That May, Musk emailed staff language much like his current messages to Twitter employees. ‘Tesla must be hardcore and demanding,’ he wrote. ‘Tesla’s passing grade is excellence, because it has to be.’ The next year, he slept on a factory conference-room floor, dismissed the engineering vice president, and worked 120-hour weeks to address production delays. Board members worried about his workload and use of Ambien to sleep. In 2018, his activity on the social-media service antagonized lawmakers and regulators, including the U.S. Securities and Exchange Commission, foreshadowing Twitter’s turmoil. The SEC later sued him over tweeting that funding was secured to take Tesla private, although he had never finalized it. Beginning this summer, completing the Twitter purchase required months and millions of dollars in legal fees. Testifying last week in Delaware over Tesla compensation, he acknowledged unilateral decisions could cause trouble: ‘Decisions I make without consulting people are more likely to be wrong.’ In Delaware, he also downplayed comparisons with the Model 3 period, saying on his way into court that Twitter’s situation was easier. Some former employees question whether the tactics will ultimately work. Tesla and SpaceX were in early growth stages when sudden harsh demands required full speed ahead. Twitter is more mature, with years of uneven performance. Deak calls the techniques ‘a great startup and growth strategy, but not conducive to building a stable company.’ Three former Tesla and SpaceX managers say Musk’s total commitment can inspire, but also damage a company through fear and scapegoating. Remaking Twitter is only a part-time job for Musk. He remains CEO of Tesla and SpaceX and told the court he would continue leading Tesla. At SpaceX, he says he focuses on rocket design rather than management. He also runs tunneling startup Boring Co. and brain–computer interface company Neuralink. His stated long-term goal is to save humanity through space travel, or, in his words, ‘make life multiplanetary to ensure the survival of consciousness.’ His multitasking is an issue in a Tesla shareholder suit opposing the compensation package that made him the world’s richest person. Under questioning last week in Delaware by a shareholder lawyer alleging neglect of Tesla, he said his intensive Twitter involvement was temporary. ‘There is more restructuring activity at the beginning,’ he said last Wednesday, ‘and afterward I expect to reduce my time at Twitter.’ Chinese translator: Jane 36Kr’s translation desk