ILLUSTRATION BY RUTH MACAPAGAL
In my personal work in advising or interacting with Fortune 500 CEOs, family business owners and billionaire entrepreneurs around the world, I always emphasize that success can be learned, and that great executives can be made. They do not need to be born.
What are the top strategies that empower CEOs to become more successful or even world-class? Let us take Elon Musk as a good example.
1. Operate by first principles
Elon Musk’s decision-making process is deeply rooted in the concept of first principles thinking. This involves breaking down complex problems into their most fundamental elements and rebuilding solutions from the ground up. It’s a method that avoids analogies and conventions, favoring innovation over tradition.
Musk example: He used first principles thinking in revolutionizing the cost structure of space launches with SpaceX. By analyzing the raw materials of rockets, he determined that the actual cost of materials was only a fraction of the selling price, leading to the development of cost-effective, reusable rockets.
Benefits of operating by first principles:
• Encouraging innovation: By breaking down problems to their fundamental elements, CEOs can avoid conventional solutions and foster innovative thinking within their organizations.
• Reducing complexity: This approach simplifies complex issues by stripping them down to their core, making them easier to understand and solve.
• Enhancing problem-solving: First principles thinking leads to more effective problem-solving as it involves building solutions from the ground up, tailored to the specific issue at hand.
2. Be hands-on
Musk is renowned for his hands-on approach, often involving himself in the minutiae of the operations of his companies. This leadership style ensures a deep understanding of the business and fosters a culture of accountability and excellence.
Musk example: During the initial production challenges of Tesla Model 3, Musk reportedly slept at the factory to personally oversee and resolve production issues.
Benefits of being hands-on:
• Increasing employee morale and respect: When leaders are actively involved, it can boost employee morale and respect, as they see their leaders taking a genuine interest in the work and challenges they face.
• Enhancing quality and accountability: Direct involvement of CEOs in operations can lead to higher quality outputs and a culture of accountability across the organization.
• Facilitating real-time problem-solving: Being hands-on means CEOs can address issues as they arise, leading to quicker resolutions and less downtime.
3. Keep things simple
Simplicity is a key tenet of Musk’s strategy. He believes in a straightforward approach to problem-solving and decision-making, which helps in maintaining focus and clarity, especially in complex industries.
Musk example: Musk’s design philosophy at Tesla and SpaceX is centered around simplicity. For instance, Tesla cars are designed with fewer parts compared to traditional vehicles, simplifying production and maintenance.
Benefits of keeping things simple:
• Improved efficiency: Simplicity in processes and products can lead to increased efficiency, as fewer complications mean less time and resources are needed.
• Enhanced customer experience: Simplified products or services are often more user-friendly, leading to better customer experiences and satisfaction.
• Reduced costs: Fewer complexities in operations and product designs can lead to significant cost reductions.
4. Work toward an ambitious long-term vision
Musk’s businesses are anchored in ambitious, long-term visions, whether it’s colonizing Mars or transitioning the world to sustainable energy. This vision guides the strategic direction and inspires both the team and stakeholders.
Musk example: SpaceX’s goal of Mars colonization fundamentally drives its business strategy, shaping its technological developments and corporate partnerships.
Benefits of working toward an ambitious long-term vision:
• Long-term strategic direction: A long-term vision provides a clear direction for the company’s future, guiding strategic decisions and investments.
• It inspires and motivates teams: A bold vision can be a powerful motivator for employees, inspiring them to work toward a common, exciting goal.
• It attracts investors and partnerships: Ambitious visions can attract investors and partners who are interested in being part of groundbreaking projects or innovative initiatives.
5. Embrace failure as a learning tool
The fifth strategy, and one Musk exemplifies, is the acceptance of failure as a stepping stone to success. Musk’s career is marked by high-profile failures, but each has been a learning experience, driving improvements in subsequent endeavors.
Musk example: The early failures of SpaceX’s rocket launches were publicly analyzed and used as learning opportunities, leading to the successful development of the Falcon series of rockets.
Benefits of embracing failure as a learning tool:
• Resilience and adaptability: Learning from failures builds resilience in the organization and its leaders, enabling them to adapt to changes and challenges more effectively.
• Innovation and risk-taking: An environment where failure is seen as a learning opportunity encourages employees to take innovative risks without the fear of reprisal.
• Continuous improvement: Each failure provides insights that can be used to refine processes, products and strategies, leading to continuous improvement.
Practical steps for CEOs and business owners
Operate by first principles: To implement this, start by encouraging your team to question existing assumptions in your industry. Break down a current project or problem into its basic elements and explore innovative ways to reconstruct the solution from scratch.
Be hands-on: As a CEO, increase your involvement in different facets of your business. Spend time on the ground with different teams, understand their challenges and provide direct leadership and problem-solving.
Keep things simple: Audit your products, services and processes to identify areas of unnecessary complexity. Implement strategies to simplify these aspects, thereby enhancing efficiency and clarity in your organization.
Work toward an ambitious long-term vision: Define a bold, long-term vision for your company that transcends immediate financial goals. Communicate this vision consistently to your team and stakeholders, aligning all business activities with this overarching objective.
Embrace failure as a learning tool: Cultivate a company culture where failure is not stigmatized but viewed as a valuable learning opportunity. Encourage experimentation and calculated risk-taking, ensuring that lessons from failures are systematically analyzed and applied. INQ
Tom Oliver, a “global management guru” (Bloomberg), is the chair of The Tom Oliver Group, the trusted advisor and counselor to many of the world’s most influential family businesses, medium-sized enterprises, market leaders and global conglomerates. For more information and inquiries: www.TomOliverGroup.com or email Tom.Oliver@inquirer.com.ph.