3 of Elon Musk's highly unusual leadership principles

Fortune

The Tesla CEO has a reputation for being unconventional and unpredictable, but his accomplishments are undeniable. These are the leadership tactics he deploys when building and running companies.

Transcript

00:00 Elon Musk is one of the most fascinating business people in the world.

00:03 His approach is so unconventional.

00:06 The guy has a very belligerent management style.

00:09 He's very hard to work for.

00:11 Were he not the owner, or the lead shareholder, or the controlling shareholder,

00:15 all of these companies, some of which don't even have boards of directors,

00:18 any conventional board of directors, were he a hired hand, would have fired him a long time ago.

00:23 But look what he's accomplished.

00:25 Everyone wants to know how he does it, right?

00:27 What are his daily management principles?

00:29 It really made it worthwhile to dig in and look at kind of the tools that he uses

00:35 that have built him an empire, but also an empire that many question may be built on sand.

00:41 One of the principles, I learned about it from one of his engineers

00:45 who spent 10 years with him at SpaceX, is that he loves to keep turning over the workforce.

00:52 There were a lot of people doing things that didn't seem to have a lot of value.

00:56 And I think that's true probably of most Silicon Valley companies.

01:00 Maybe not to the degree to which it was at Twitter, but yeah.

01:04 There's a potential for significant cuts, I think, at other companies

01:08 without affecting their productivity, in fact, increasing their productivity.

01:12 His personnel policy is extremely demanding and extremely belligerent.

01:17 This engineer was telling me, "If I made a mistake in February,

01:22 I'd spend the next 11 months worrying about making a second mistake

01:26 because if you make two mistakes a year, you're out."

01:29 At this point, I think I know more about manufacturing than anyone currently alive on Earth.

01:34 I can tell you how every damn part in that car is made.

01:37 He demands that everyone know everything there is to know about what he calls the "idiot index."

01:42 And the idiot index is knowing what the raw materials are that go into every part,

01:47 what their cost of each of them is, adding them up,

01:51 and then knowing what that finished part costs.

01:54 And if you don't know that number, twice you're out.

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