- Tesla CEO Elon Musk is the third-richest man — but he's still prone to make some poor leadership decisions.
- Musk is notorious for being a micromanager, and he told The New York Times on Monday that he "can't find people to delegate to."
- Micromanagement in general is bad for business and can lead to wasted time, money, and high executive-turnover rates.
- Visit Business Insider's homepage for more stories.
To say that Elon Musk has a lot on his plate would be an understatement. But he's not planning on changing that anytime soon.
In a New York Times podcast released Monday, the Tesla CEO said he delegates tasks on a limited basis and does most of the major work he needs himself.
"If investors in Tesla knew the full scope of all the things I do at Tesla, they would be quite concerned," Musk told the journalist Kara Swisher. "Not because I want to, but I need to get things done."
There are a lot of things Musk needs done. Not only is the billionaire entrepreneur responsible for pioneering electric cars at Tesla, but he also leads the aerospace manufacturer SpaceX and the neurotechnology company Neuralink, which develops implantable microchips designed to enhance human brain function.
Musk's controversial leadership has led him to become the third-richest man, with a net worth of $102 billion. Forbes named Musk the most innovative leader of 2019, and he continues to push ahead with ideas to revolutionize transportation on earth and in space.
But Musk has long been criticized for his micromanaging leadership style. In 2015, he told The Wall Street Journal that he self-identified as a "nano-manager" and worked 100 hours a week. In 2018, current and former Tesla employees told CNBC that Musk's extreme unwillingness to delegate tasks had been detrimental to the company.
Telsa did not immediately respond to a request for comment on Musk's leadership style.
Business Insider examined Musk's leadership and how it's had an effect on his business ventures.
Musk's leadership style could be a reason for high employee turnover
Musk is never really satisfied with his team's work. That's a telltale sign of a micromanager.
When asked why he doesn't share more work with his team, Musk told The New York Times, "The practical reality is that I cannot delegate because I can't find people to delegate to."
In 2018, reporting from The Information indicated that Musk has had 29 direct reports working under him at Tesla at the same time, from high-level executives to managers whose respective bosses left the company. (It's generally recommended that a manager have no more than eight to 10 reports so that they can devote enough attention to their workers.) But even with so many direct reports to delegate to, Musk hasn't seemed to share major responsibility or decision-making power with any of them.
That could be a reason that Tesla has such a high executive-turnover rate. According to AllianceBernstein analyst Toni Sacconaghi, the company had an annualized turnover rate of 44% for executives reporting to Musk over a nine-month period in 2019.
"We worry that such turnover not only causes instability (at the current rate, the entire executive team of 150+ people would be gone in <4 years!) but could also reflect more significant concerns among senior leaders about the company's direction or workplace practices," Sacconaghi wrote in a memo.
Sacconaghui had reason to worry – according to a 2018 report from employee engagement firm TINYpulse, people who were micromanaged to the point that they don't have freedom over their decisions at work were 28% more likely to leave their jobs.
He doesn't listen to suggestions from his team
In 2016, Musk ordered a team of engineers to automate assembly for the Model 3 Tesla car.
The team warned him that it would be difficult to install certain parts of the car, like the door seals, and that they would need more engineers to manage extensive automation.
Musk ignored their suggestion – another trademark trait of micromanagers – and insisted that the process be automated anyways. It didn't work. Musk himself admitted in a 2018 tweet that "excessive automation at Tesla was a mistake. To be precise, my mistake."
It could have been avoided if Musk had placed more trust in his team.
Micromanagers like Musk tend to take on a "my-way-or-the-highway" mentality and see it as a sign of disrespect if employees diverge from the specific way they would handle a project. That means that when employees have valuable ideas that could be beneficial for the company, those ideas get swept under the rug – and the company loses out.
He's a perfectionist
Micromanaging, in general, makes employees feel undervalued at work. Reporting from multiple sources indicates that Musk's particular brand of micromanaging means that he often sets expectations unrealistically high, refuses to consult others when making decisions, and in turn frustrates his team.
"The worst part is the toxicity that Elon creates — unrealistic stretch targets without a realistic plan in order to achieve them," a former manager who worked directly with Musk told Business Insider.
It's even taken a toll on Musk.
"When I see a car or a rocket or spacecraft, I only see what's wrong," Musk told the Wall Street Journal in 2015. "I never see what's right. It's not a recipe for happiness."
"Elon basically does what he wants, whenever he wants," one Tesla factory worker, who has been in contact with Musk, told Business Insider.
When people feel like they have less control over their decisions, their brains react like they're being threatened – and, in turn, experience higher levels of stress, according to researchers at the Center for Neuroeconomics Studies.
"Feeling in control, even if it's an illusion, is key to … cognitive ability staying intact," Yale neurobiology and psychology professor Amy Arnsten said. So when employees feel as if they can't take ownership of their work, it leads to worsened mental health and lower productivity.
"I'm trying to allocate my time according to what is likely to maximize the probability that the future is happy," Musk told the New York Times.
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