December 7, 2024

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What Musk’s Leadership Style Really Costs

What Musk’s Leadership Style Really Costs

“He who fights with monsters should look to it that he himself does not become a monster.” FrederichNietzsche

When both Tesla and SpaceX teetered on the brink of collapse in 2009, Elon Musk went all in. He poured millions from his personal accounts into the companies and convinced investors to do the same. Looking back, he described the experience vividly: “It felt like I had been taken out to the firing squad and been blindfolded, then they fired the guns, which went click. No bullets came out. And then they let you free.”

The bet paid off spectacularly. Tesla’s market value now exceeds $700 billion – more than Daimler, GM, Toyota, Ford and VW combined. SpaceX has revolutionized space travel.

Aristotle noted, “Excellence is never an accident. It is always the result of high intention, sincere effort, and intelligent execution.” By conventional metrics, Musk’s leadership style works. After all, isn’t the scoreboard the ultimate judgment?

But this view misses something fundamental about human nature and organizational success. The question isn’t whether Musk’s companies succeed – they clearly do – but rather at what cost, and whether they could achieve even more with a different approach.

Consider the human toll of Musk’s leadership style.

Engineers at Tesla report being told by the boss that their work is “complete shit” in front of colleagues. Stories abound of rage firings and arbitrary decisions, with Musk sometimes declaring “I’ve got to fire someone today, I just do.” The irony is that Musk promotes Professor Robert Sutton’s “No asshole rule” at SpaceX while embodying its antithesis.

Although toxic behavior can be dramatic it is often much more mundane — a daily serving of inconsiderate behaviour. It’s leaving staff hanging for a decision and then blaming them for inaction or for things out of their control. It’s the expectation that you will reschedule your day to make an urgent meeting with the boss but then being blown off because ‘something came up’. It’s being told that you are dumb, worthless or incompetent in front of others. Bosses really matter.

Contrast this with Mark Cuban’s approach at his companies.

Cuban, worth north of $5.5 billion, has built his empire on a different philosophy. “The key is to treat your employees like they’re part of the solution, not part of the problem,” he’s noted. At the Dallas Mavericks football club and his other ventures, Cuban is known for creating psychologically safe environments where employees can speak up, challenge ideas, and innovate without fear.

The science is clear .

The science on which approach yields better results is unequivocal. Research from Google’s Project Aristotle found that psychological safety – the ability to take risks without fear of punishment – was the single biggest predictor of team success. Research shows that teams with supportive leaders experience both higher productivity and higher innovation rates than those under authoritarian management.

“The economic cost of avoiding a toxic worker is actually twice as large as the benefit of hiring a superstar,” notes Harvard Business School professor Dylan Minor. His research demonstrates that while brilliant jerks might drive short-term results, they create lasting organizational damage through increased turnover, reduced collaboration, and suppressed innovation.

Some defend Musk’s style as necessary for pushing boundaries and achieving the impossible. But this argument falters when we examine other revolutionary companies. Microsoft under Satya Nadella has thrived by explicitly rejecting the confrontational style of its earlier years. “The C in CEO stands for Culture,” Nadella often says, emphasizing empathy and growth mindset over fear and perfectionism.

This makes sense – there is both an immediate cost of toxic leadership:

– higher rates of stress-related health issues

– lower job satisfaction

– lower engagement levels

– much higher likelihood of seeking new employment

These impacts cascade through organizations, exacting a spiraling cost of fear. When employees are afraid to speak up, problems go unreported, innovations die in silence, and opportunities vanish before they’re even recognized. There is also an opportunity cost, as talented people avoid horrible bosses with outsized egos.

“Leadership is not about being in charge,” argues Simon Sinek. “Leadership is about taking care of those in your charge.” This philosophy anchors Mark Cuban’s approach. During the COVID-19 pandemic, while other NBA owners laid off staff, Cuban continued paying arena workers their full salaries. “I’m just trying to be a good citizen,” he explained. “It’s the right thing to do.”

The results speak for themselves. The Dallas Mavericks consistently rank among the NBA’s best places to work, with employee tenure averaging 12 years – triple the industry standard. The team’s value has increased seven-fold under Cuban’s ownership while maintaining one of the highest employee satisfaction rates in professional sports.

What If?

None of this diminishes Musk’s achievements. His companies have genuinely changed the world. But imagine what they might accomplish if they harnessed both his brilliant vision and the full potential of their workforce. 130 years ago psychologist William James observed, “The deepest principle in human nature is the craving to be appreciated.”

The future of leadership isn’t about choosing between results and relationships. It’s about understanding people at a deep level and building results through relationships and teamwork. While Musk’s command-and-control style might drive wins, he and his firms are outliers. The evidence overwhelmingly suggests that compassionate leadership creates more sustainable, innovative, and ultimately more successful organizations.

In the end, perhaps Nietzsche’s warning is apt: “He who fights with monsters should look to it that he himself does not become a monster.” In our pursuit of excellence, we must not sacrifice the very humanity that makes excellence worth pursuing.

The question isn’t whether Musk could be more successful – he’s already the world’s richest person. The question is whether his companies could be more successful if they created environments where people felt safe to contribute their best ideas, take calculated risks, and innovate without fear. The evidence suggests they could.

As we shape the future of work and leadership, we would do well to remember that sustainable success comes not from driving people through fear, but from inspiring them through purpose, supporting them through challenges, and celebrating them through victories. That’s not just good psychology – it’s good business.

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