Elon Musk’s Latest Leadership Blunder

Tesla CEO Asks Employees to Prove Themselves or They’re Out

For months, Tesla’s CEO Elon Musk has been in the news following a number of leadership mishaps, these actions led to him being asked to step down as Chairman of the Board. 

He recently emailed staff at 1am to inform them of job cuts and now he’s back at it. He took to his emails again to notify all employees about the company’s plans to shut many of its retail stores going forward.

The email sent to employees hoped to ‘clear things up’. Despite the email shedding some light on the future plans and priorities of the business, staff reported feeling taken by surprise and noticed a significant drop in morale.

Read on to see the full email.

From: Elon Musk

To: Everybody

Subject: Tesla Stores & Sales

There still some uncertainty around Tesla stores and the sales team. Hopefully, this note clears things up. Please let me know if there is anything I’ve forgotten to address. Stores with a high visitation rate and that lead to significant sales will absolutely not be closed down. It would not make any sense to do so, except in rare cases where the rent is absurdly high. Moreover, Tesla will continue to open stores throughout the world that meet the above criteria. Stores that are in a location with low visitation rates (i.e. empty most of their opening hours) and lead to low sales will gradually be closed down. This is analogous to seeds on barren ground. There is no reasonable way to justify keeping such stores open. Stores that are somewhere in the middle will be evaluated over time to see there is some way to allow them to cover their costs. If there is, they will remain open, otherwise not. However, these stores will be given a fair opportunity to prove their case.

The above principles also apply to the sales team. No one who is a major contributor to demand generation will be let go. That would make no sense. However, sometimes, in a company with 45,000 people, things happen that make no sense. I will do my best to remedy issues when brought to my attention directly or through [redacted email address].

What is meant by “all sales will be online” is just that the act of purchasing a Tesla will always be done via the potential new owner’s phone or computer. This is true whether they are at home or in a store. Unlike buying from other carmakers, ordering a Tesla doesn’t require any *physical paperwork*.

This is very different from normal expectations for buying from other carmakers and is simply meant to emphasize that ordering a Tesla is super easy and can be done in 2 minutes from your phone or laptop at Tesla.com. Ordering a Tesla is not much harder than ordering an Uber, but hardly anyone knows this!

However, many potential Tesla owners will still want to talk to a Tesla representative in person or want a test drive from a Tesla representative. Stores also have a small number of Tesla vehicles available to drive away immediately for customers that want a car right then and there.

This is why stores and Tesla product specialists and owner advisors will always be of critical importance to our long-term success.

Thanks,

Elon

How to communicate with staff during change

Many have argued that Musk’s brief and informal email was to notify employees that their jobs may be at risk. However, on the flip side Musk is revealing a good level of transparency about the current state of the company’s performance and what is needed to turn things around. If employees are aware of changes coming, internal politics and gossip will be destroying morale. This is often argued to be a far better way of handling negative change within a business. 

It’s now up to the line managers to support employees through the change process to ensure they feel supported, despite what might happen to their role further down the line. We just hope the right people were briefed before the email was sent so there is a concrete plan in place to carry these actions through. 

If you’re currently undergoing a change process, contact us for support with changing mindsets and developing your employees in the skills they need to thrive during turbulent times. 

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