To Elon Musk’s credit, he has built phenomenal businesses — even if his stakeholders lived on the edge for too long until those businesses succeeded. Few have even risked bankruptcy.
His ability to think much ahead of the rest of humanity and to dare to experiment with innovation is breathtaking. Media and social media alike love his blunt and provocative speech. He is as he is. They either love him or hate him.
That’s the trouble too.
He bought himself a very expensive toy (a company with a CEO tag). And he threw out the batteries (the leadership team) as soon as he got the toy in his hand. The company is now without a core leadership team. And his employees are watching. Without the batteries, the toy will be an expensive showpiece.
Will his employees trust him? And why should they?
What he brings to the table
Throughout his career, Musk has chased bold objectives. He single handed catalysed the global car industry. Sending rockets into space was considered a role of governments. Musk changed that by doing so as a private enterprise.
Musk is popularly known as the co-founder of Tesla, which he helped start in 2003. People forget that it was SpaceX, the aerospace company, that he founded first in 2002.
Musk is also a co-founder of a San Francisco-based startup called Neuralink, which aims to connect the human brain to computers. And he is the founder of The Boring Company, a tunnel construction startup based in Texas.
Musk has said that he doesn't "care about the economics at all" and bought Twitter for $44 billion because he believes it's "important to the function of democracy". Twitter currently has over 7,000 employees and a market cap of around $37 billion.
This is the first time he has made a hostile purchase after a rethink of his original plans. He fired the core leadership within hours of the deal's closure. Employees are bound to worry about the company's and their careers' future. Musk is seen as an unruly, unpredictable loud leader and called ‘Musk, the brusque’. He hurt the pride of Twitter employees when he told Tesla investors last week that he was overpaying for Twitter.
Twitter employees will have another concern — does Musk really care about them? They can see that Tesla is fighting a racial discrimination and harassment lawsuit that a California agency has filed on behalf of 4,000 Black Tesla employees. Many more lawsuits are pending against Tesla that says the firm has allowed a culture of sexual harassment at its Fremont plant, amongst other locations.
With much disdain, the Tesla factory did not follow public health orders to shut its plant during COVID. In today’s world, where respect for every human being is seen as responsible corporate behaviour, Musk has not stood tall.
Lofty plans need people
Musk has said he wants to "defeat" spam bots on Twitter and make public the algorithms that determine how content is presented to users. He wants to stop Twitter from becoming an echo chamber for hate and divisive voices while simultaneously attempting to limit the current censorship.
Already Twitter has been/is at loggerheads with many governments and regulators globally. An aggressive owner-CEO could make it worse with stand-offs that won’t serve any purpose.
Musk has attempted to calm the employee jitters by saying that he does not plan to
retrench 75 percent of the total headcount. But that denial would not stop him from retrenching 50 percent of the staff!
He has a serious business problem: Having advertisers stay with the platform and make it relevant and appealing to them. Twitter has been struggling to engage its active users.
The heavy tweeters account for less than 10 percent of monthly overall users but generate 90 percent of all tweets and half of global revenues for Twitter. So, Musk has to ensure that he does not push away his advertisers or Twitter users with his words and actions.
For Musk’s stated plans to quintuple Twitter’s annual revenue to $26.4 billion by 2028, he needs his team to believe in its possibility. More importantly, the team has to work on the roadmap to deliver it.
For a team that has almost believed in free speech, he needs to sell his business ideas to his team. He cannot play the ‘my way or the highway’ card for too long.
Some of the differentiated revenue streams he has ideated include: Scaling up Twitter’s payments business, charging commercial and government users, increasing the popularity of Twitter’s premium subscription service by making it ad-free, and potentially charging for tweets that go viral, etc.
The tallest objective is his wish to create a “super app” using Twitter as the base. He wants to offer ride-hailing, shopping, and money transfers. These will hit the roadblock at the app stores of Google & Apple, which see themselves as super apps.
Also, in almost every global jurisdiction, ‘payments’ is a highly regulated financial activity. This would need identity verification, which might push away Twitter users who have enjoyed the anonymity that Twitter has offered so far.
Coaching Musk
Taking people along: He would need to take his teams along to execute these lofty ideas. Musk has not had experience in managing organisational change, especially in a hostile takeover. There would be an embedded culture at Twitter, which he needs to understand much before attempting to change it. He is the last person to board the bus.
Any culture transformation takes time and would need hand-holding people within the organisation to start with. The question is if he has the patience and the humility for it.
Lonely at the top: Musk is a loner-leader, an unhappy loner than most business leaders. While he might have few staunchly loyal senior executives in his other enterprise, Twitter has a much younger employee demographics.
Now that he wants to be the CEO of this entity, one would wonder how much time he would be able to offer his team at Twitter when he has other equally demanding executive roles across multiple entities he is a shareholder of. He has to build a core team of senior executives with whom he can share mutual respect and vision to grow.
Building trust: As much as Musk would expect his employees to be loyal and trustworthy, in this case, he has to first demonstrate that he can be trusted. He has to be transparent with his plans for the company and its people. He has to learn to be vocal, with the right tone, not just bordering on bombastic. Playing the 'I am the owner' card won’t work in a platform that professes free speech.
Delegation matrix with authority and roles: None of the companies in his empire has tall leaders who are seen as his successor or the chief executive. This has been one of his biggest follies, which even the public or strategic investor shareholders have not asked him.
Allowing for clear authority and accountability for each of the leaders in Twitter will be an ask that Musk has to put together.
Allowing for space for other senior executives: Including them to express their ideas and views, however different they are to his.
Taking staff into confidence: This is the critical challenge, and they will watch if he walks the talk.
Values: If Twitter were to be a neutral voice for humanity as Musk intends it to be, can it start with internal stakeholders feeling the same values in the organisation? Musk needs to articulate clearly the vision, and values that he wants Twitter teams to stand for.
Empathy: It is an attribute that good leaders demonstrate, especially in stressful times. If Musk can demonstrate empathy when dealing with the change management at Twitter, he will be able to endear many of the talents to his viewpoint.
Div-In: Musk has to start offering better diversity and inclusion aspects in the workforce and workplace. Considering the challenges in this theme across his other business ventures, he has to mend ways very quickly.
In short, Musk will have to carefully steer the convergence of trust, transparency and technology as he seeks to build Twitter 3.0. (1.0 was when it was founded, 2.0 was when Jack Dorsey, the founder, gave up his CEO role).
As a single owner of the entity and an unlisted one, he might fall off the radar of public shareholders. But he would be on the radar of every employee who will have an opinion on whatever he does or does not. The world will watch if he actually allows free speech for his employees. No wonder the world is curious, and on Twitter, trends #twittertakeover.
