This article originally appeared in General manager.
As Tesla’s Shakespearean drama unfolded last week, questions were raised as to whether Tesla’s board of directors was using Jim Jones’ Jonestown suicide pact as a strategic plan. Saturday’s dramatic settlement with the SEC doesn’t change that. They drink the founder’s Kool-Aid. Charismatic CEOs can be brilliant visionaries, but they can also be their own worst enemy and a great threat to a company’s future. They see the world differently and take greater risks than most normal people would realize. So most fail. But those who are successful often rightly believe in their own indispensable character and immortality.
Musk’s turnaround with regulators, which will leave him as CEO but oust him from being Tesla’s chairman for three years and force Musk and the company to pay a $ 40 million fine, won’t change who he does. is, nor how he runs. Some founders can become self-destructive by becoming rigid in their technological biases and operational leadership, denigrating the critics as parallel to the cowardly naysayers who tried to bring them down in their early days.
That’s what happened with Edwin Land of Polaroid, Ken Olsen of Digital Equipment, William Norris of Control Data, Seymour Cray of Cray Supercomputing and An Wang of Wang Laboraties, among others. I knew these tech titans and they were no less brilliant and courageous than Musk, and no less stubborn. This is what led to the creation – and self-destruction – of their businesses.
Here are the issues that Tesla’s board now needs to tackle:
Must have a Musk plan. It must be remembered and contained. Musk is the key to the company’s high value and the board should find him a scientific, industrial and ambassadorial role. Limit his ability to speak for the company on financial matters. In times of distress, Steve Jobs, Martha Stewart and Steve Madden have shown it is possible. Additionally, in crisis-free estates, visionaries such as Sam Walton of Walmart, Ray Kroc of McDonald’s, and Howard Schultz of Starbucks have been able to slip into such ambassadorial roles.
Consider an interim CEO. Ford’s triumphant former CEO Mark Fields would take the job with the right assurances. He has made the best profits in Ford history, is at the frontier of autonomous driving technology and is revered in the industry. Assure him of help with operational changes, technology updates, distribution improvements, parts, etc. Musk insists Tesla has its own stores, which could become an issue as this business matures. The company might want to work with franchisees in some areas, but Musk would resist. Tesla lags behind in Level III technology and missed out on improved laser LIDAR sensors, relying strictly on radar and analog cameras.
Secure the board. They have to get out of the bunker. The SEC regulations are a step in this direction. He asked Tesla to bring in two new independent directors from outside and establish a new committee, according to the the Wall Street newspaper. The current composition of the board is weak, sycophantic and under-equipped.
Financial plan. Tesla’s cash drain needs to be addressed, as the company currently only has $ 2 billion in cash, $ 10 billion in debt, and huge capital investment needs. There must be a plan to move forward. The sellers are in a hurry.
Operational plan. Reassure customers and suppliers that the unprecedented revenue is about to end. Tesla has lost 30 key vital leaders in just 18 months!
Past struggles with CEOs, including Mark Zuckerberg at Facebook, Travis Kalanick at Uber, John Schnatter at Papa John’s, and Andrew Mason at Groupon, suggest we can save the company from its founders and cult supporters.
