Many corporate leaders and board directors are shaking their heads as they watch the very public spectacle playing out with Elon Musk, CEO of Tesla. His ongoing battle with the SEC over a set of personal tweets is pulling down company stock value, destabilizing his leadership team, and eroding trust even amongst his greatest allies. In fact, it just may cost him the CEO job. Triggered initially by his tweets about taking Tesla private, he has ignored restrictions that were part of the resulting legal settlement, and continues to play by his own rules, reacting emotionally and playing out these reactions on Twitter.
Is this an extreme situation? Maybe, but the risk environment today is unforgiving with heightened scrutiny and real-time access to information. The story of Musk is not just a lesson on use of social media, but one all CEOs should take seriously and learn from.
In 20 years of advising CEOs on leadership, I’ve had a front row seat to a host of thorny challenges: a CEO leading a sprawling trans-Atlantic joint venture of 2 public companies struggling to integrate vastly different cultures; the CEO navigating her company out of Chapter 11 while trying to retain key talent; and one managing public scrutiny and backlash as healthcare reform came online just to name a few. A dozen business school case-studies played out in real time with real people and consequences. Each story is fraught with tough decisions, difficult choices, sleepless nights and ultimately, strength of will and character. The potential to slip over the edge into “damn the torpedoes” is always right around the corner.
The surprising difference-maker
The singular factor shared by those who garnered the trust and confidence of their employees, customers, investors and boards and led their companies to strong performance might surprise you. They weren’t necessarily the smartest, the boldest, the most passionate and charismatic or even the most knowledgeable about the business. The surprising difference I observed between good and great CEOs is their uncanny ability to remain calm, to manage their emotions, to step back before reacting and to take time to think. They stop and ask questions before declaring. They wait a beat before acting on a decision. They confirm information by talking things through with trusted stakeholders before moving forward...then they decide and go.
Are they just wired that way? No. Even those with hard-charging temperaments were able to adjust their approach, sometimes significantly. These CEOs brought in an advisor not because they were looking for answers based in trend analysis or industry research, but because they wanted to talk things through. They wanted to make sure they had the time and space to think, to challenge their assumptions, to play out scenarios and strategize approaches, and to consider the significant consequences of their actions in a rigorous way.
Pausing to uncover the blind spots
Having spent time observing and sharing in this process with these high-performing CEOs, it comes down to this: they know what they know, they know what they don’t know, and they want to know what they’re missing. Their willingness to demonstrate restraint affords them the opportunity to learn enough to guide actions wisely and avoid risky missteps. The humility to be open to advice from others gives them the power to act from a position of strength.
Skeptical? Show me a CEO who has an action-bias driven by emotion, and I’ll show you a CEO who is creating disruption, undermining trust and putting their company at risk. What may have worked in the climb to the top backfires spectacularly when you’re sitting in the CEO seat. The impacts are like a ripple effect on a pond – even small decisions have far-reaching effects.
Elon Musk clearly qualifies as smart, bold and very knowledgeable about his business, which served him well as an early entrepreneur looking to disrupt the auto market and revolutionize electric vehicles. Now it could upend everything he has built.
If you’re the CEO, don’t assume that Musk’s lack of restraint and unchecked boldness are his alone. Take the potentially uncomfortable step to stop and evaluate your own responses to the situations and scenarios that hit a nerve and trigger you. Learn from others about the power of seeking a sounding board and testing assumptions. If you haven’t done so already, put stop-gap measures in place to help you build the habit to pause, understand, evaluate, decide…then go. Your company’s success – and your own performance – depend on it.