What economics professors are saying about Elon Musk

Tesla founder Elon Musk doesn’t particularly like MBAs

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

AUTHORITARY LEADERSHIP

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

“Depriving employees of the ability to work more flexibly by effectively motivating employees with a stick rather than a carrot is misguided,” said Ayelet Fishbach, professor of behavioral science at the Chicago Booth School of Business manager. “Punishment rather than reward will not foster a productive mindset and can negatively impact manager-employee relationships, leading to a breakdown in communication and a resistance to teamwork.”

Musk’s leadership style and his calls for a return to office, says Fishbach, ultimately undermine employee engagement and satisfaction.

“There’s a plethora of alternative ways to recognize effort that keep employees feeling motivated, engaged, and encouraging them to return to the office,” says Fishbach. “Acknowledging those returning to the office, explaining how office presence is linked to teamwork and ultimately advancement opportunities, and making the office a more rewarding experience are just a few ways to pull the carrot instead of the stick. Ultimately, success is about making employees feel recognized and valued, rather than left out and ultimately forced to return against their will.”

A “UNIQUE” CEO

While most pundits agree Musk creates 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 is yet to count Musk out.

“Musk is definitely a tenacious, impulsive, and risk-tolerant leader, and he’s willing to seek the kind of change at Twitter that I can’t imagine in any other CEO or entrepreneur,” Wu said in an interview with The Atlantic. “I think there’s a certain logic to madness.”

Wu isn’t directly saying Musk is a “good” CEO, but he’s not necessarily saying Musk is a “bad” CEO either.

“Musk is a unique CEO,” explains Wu. “On the bright side, I would like to say that what Musk has achieved so far at Tesla and SpaceX is really incredible and impressive and really special for his generation of corporate leaders in terms of scale and the resources it takes to mass produce.” electric cars are required and commercial spaceships are built. It’s unfathomable, and he actually did it.”

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

“The key point here is that Twitter was actually in a very bad state and had no future anyway,” says Wu. “In terms of really tough problems, this is the kind of CEO you probably need to try. Indeed, Twitter is a very, very difficult business challenge that no one else has been able to solve. So at that point we might have to swing the car around and see what happens.”

Sources: Business Leaders, The Atlantic



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