Why Elon Musk is Failing at Twitter
His road to failure is all too common and hard to stop
I was the CEO1 at Windward Studios for the last 6 years before it was acquired. A much smaller company than Tesla, SpaceX, or Twitter. But the environment is the same. And as the majority stockholder, I officially answered to no one, same as Elon.
So what’s it like being the CEO? Well the first year I was CEO we increased sales 39%. When that was accomplished I figured I was a God who was going to take us on to even greater success. So what happened?
The next year we grew only 5%. Total gut punch. The thing is, it was a great thing in hindsight. Because every year after that I would think back and remember that success was built on a lot of things, only some of which were in my control.
Without that gut punch, and some practices I then put in place, it would have been so easy for me to go forward with the point of view that I’m brilliant and my decisions are the road to success.
Now add to that, every successful CEO, including me, at times has made a decision that everyone advising them says is wrong, and it’s successful. One of my board members told me that the most important decision a CEO makes is when to follow the advice of their executive team and when to follow their gut.
So again, you have experience that there are times that ignoring advice and following your gut is the road to success. But what’s often forgotten in that is “at times.” If this becomes an excuse for every decision, most often you get failure.
And finally you have the “yes your majesty” issue. Everyone at the company wants to make the CEO happy. It’s extraordinary how strong that is, and my company had less than 1%2 of the employees at Twitter. There’s a lot that goes into that but it’s hard to get employees to tell you things you don’t want to hear.
You have to constantly actively push for the uncomfortable news, and even then you get maybe 1/4 of it. If you don’t push you then constantly hear “yes your majesty” and it’s great for the ego but really bad for running a company.
So what’s happening with Elon Musk at Twitter? Well I’m not there and so my supposition is from a distance. But I think you have an individual who knows he’s smarter than everyone else and that his ideas are brilliant. And he’s not spending time to learn or listen to those who will tell him no.
And I think he’s frantic. He’s got 44 billion dollars on the line and negative cash flow. So on top of only his ideas can turn things around, he needs to turn them around quickly and spectacularly. And when something doesn’t work, then it’s even more intense flailing.
I’ve been there. It’s so enticing to figure I knew best. It’s so scary when things are going bad and out of your control. So much of being a successful CEO is avoiding these temptations.
It’s interesting, Elon will fail here because he’s had a good run of success over the last several years. And he’ll likely destroy Twitter before he takes a step back, realizes he’s in a destructive decision loop, and it’ll be too late to fix it.
I was also the founder and at the beginning CEO & CTO.
Before layoffs.