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Who judges Elon Musk?

A number of years ago I was a non-executive director of a hospital trust. The trust had a change of chairperson and a new one was appointed. The new chairperson arranged a meeting of the non-executive directors and introduced himself by saying that he expected us all to pull our weight and anyone not prepared to do so should resign. So, I resigned.

The reason I resigned was because I was offended by the suggestion that I, and my colleagues, were not pulling our weight. To me this was a bolshie guy who was coming in and throwing his weight around from the beginning. I didn’t want to work with anyone like this. In the event the chairman proved to be a much more benign character. The non-executives who stayed told me later that he was just an ordinary guy who must have felt he needed to act tough at the outset. Maybe I had resigned too soon and not given him time to prove himself.

I was reminded of this the other day when Elon Musk sacked half the staff at Twitter and gave them a motivational speech (?) in which he said he expected them to work all hours just as he did. Now, I confess that I’m totally in awe of Elon Musk. I think his cars are wonderful and he has proved himself a brilliant entrepreneur. But I wonder whether he understands the emotions of his employees. They are arguably one of his most important assets. They hopefully have the skills and commitment to do a great job and run his business. They also have families and social lives. As is frequently discussed on this website, there has to be a balance – a sort of venn diagram - that brings together work, family, and social circles. There is a sweet spot where these circles overlap and not just in the work circle.

What must it be like working at Twitter if half your colleagues have been sacked and you have a boss who implies that you are not working effectually? Some people may be motivated by such macho action. However, I am of the belief that most respond to encouragement rather than threats. I also believe that everybody has a talent and the skill of a good boss is to recognise that talent and nurture it. If it is supposed that the staff aren’t doing as good a job as they should, whose fault is this? Is it the fault of the staffer or is the company failing to recruit, train and motivate people to do the right job. Is the company putting round pegs in square holes?

Another boss who had a similar aggressive approach to his staff was Jack Welch. Jack Welch, otherwise known as “neutron Jack”, was once feted as one of the best managers on the planet. There is no doubt that during his tenure he built GE into an engineering behemoth and made many of its shareholders extremely happy. One of his techniques was his "rank and yank" policy in which he fired the bottom 10% of his managers, regardless of their performance. Can you imagine what it must have felt like working in this environment? Some of the managers would no doubt have been very happy if they were in the top echelons and rewarded by great bonuses. But, like any manager of a football club, their success is seldom continuous and one day the knife could and most probably will fall on them.

It’s easy to be critical of the aggressive way in which managers deal with problems but what should we do in such situations? The first thing is to spell out the facts and tell the truth. When there are problems within a business it is no secret to the people working there. They know the problems better than anybody else. They also know that if they are not dealt with the consequences could be dire for everybody. It is therefore important that managers level with staff and show that they have a grasp of the situation.

It may be necessary for the headcount to be reduced. This will be no surprise to people within the company. The important thing here is to be fair. Managers must show that they have considered every possibility and come up with a solution that hopefully is best for everyone even though pain will be felt by some. Fairness and generosity would at least be a small compensation.

Finally, those who are executing the hard words must also be seen to be hurting. It would be unreasonable to expect staff to be accepting of serious staff losses if management vote themselves generous compensation. Far better if they are seen to take salary cuts and lose some of their benefits.

It is difficult to criticise a manager such as Elon Musk or Jack Welch when they are in peak performance. They have and are achieving a great deal. It is history that judges us. Only after the passage of time will we see whether the management approach has worked for the company, for the people who have helped build it, and for the world in which it lives.

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