What Business School Professors Say About Elon Musk – Poets&Quants

Tesla Founder Elon Musk isn’t all that fond of MBAs

On Oct. 28, Elon Musk completed the deal to acquire Twitter. In the following days, he established himself as CEO, fired top executives, and laid off roughly half of the company’s workforce. Hundreds of Twitter’s remaining employees have since resigned in rejection of Musk’s takeover and his attempts to tear down the current culture and replace it with what he calls “Twitter 2.0.”

AUTHORITARIAN LEADERSHIP

One of Musk’s demands for remaining Twitter employees is a full return to office for at least 40 hours a week—a demand that some experts say isn’t the most strategic.

“Removing employees’ choice to work flexibility, effectively using a stick rather than a carrot to motivate workers, is misguided,” Ayelet Fishbach, Professor of Behavioural Science at the Chicago Booth School of Business, tells Business Leader. “Punishment instead of reward will fail to foster a productive mentality and can negatively impact relationships between leaders and employees resulting in communication breakdown and a resistance to teamwork.”

Musk’s leadership style and his demand for a return to office, Fishbach says, ultimately undermine employee motivation and happiness.

“There exists a plethora of alternative ways of recognizing efforts that would make employees feel motivated and engaged and encourage them to return to the office,” Fishbach says. “Recognizing those who return to the office, explaining how office presence is tied to teamwork and ultimately advancement opportunities, and making the office a more rewarding experience, are just a few ways of pulling the carrot instead of the stick. Ultimately, success is about making employees feel recognized and appreciated, rather than excluded and ultimately forced to return against their will.”

A “ONE-OF-A-KIND” CEO

While most experts can agree that Musk breeds a tough, competitive work environment, some say Twitter was overdue for new leadership. Andy Wu, an assistant professor of business administration at Harvard Business School, is one expert who isn’t counting Musk out quite yet.

“Musk is definitely a hard-charging, impulsive, and risk-tolerant leader, and he’s willing to go for the kinds of changes at Twitter that I can’t imagine any other CEO or entrepreneur going for,” Wu says in an interview with The Atlantic. “I do think there’s some logic to the madness.”

Wu isn’t outright in saying that Musk is a “good” CEO, but he doesn’t necessarily say Musk is a “bad” one either.

“Musk is a one-of-a-kind CEO,” Wu explains. “I will say, on the upside, what Musk has accomplished so far at Tesla and SpaceX is really unbelievable and impressive and really special, as far as his generation of business leaders in terms of the amount of scale and resources needed to mass-produce electric cars and build commercial spaceships. It’s unfathomable, and he actually got there.”

And it’s Musk’s leadership, Wu believes, that is necessary to transform the future of Twitter—or any future it has left.

“The key punch line here is that Twitter was actually in very bad shape and didn’t quite have a future anyway,” Wu says. “In terms of really tough problems, this is the kind of CEO you probably need to try out. Twitter is actually a very, very difficult business challenge that nobody else has been able to solve. So at this point, we might need to, like, swing the car around and see what happens.”

Sources: Business Leader, The Atlantic