We were alerted to the blog entry that became the subject of this month’s “Content Analysis” feature by The New York Times, which ran an article on Nov. 4 ballyhooing the fact that “In the age of transparency, the layoff will be blogged.”
The piece explained, “Elon Musk, chief executive of the electric-car company Tesla Motors in San Carlos, Calif., said he had no choice other than to blog about the Oct. 15 layoffs at the closely watched company—even though some employees had not been told they were losing their jobs.”
Apparently the news had already been leaked to a Silicon Valley gossip blog, and Musk felt forced to blog. But he wasn’t forced to write a blog entry as imperfect—and rife with lessons for executive communicators supporting CEOs in uncertain times—as this one.
The blog is headlined, “Extraordinary times require focus.”
It’s not exactly “It was the best of times, it was the worst of times,” but it will have to do. Musk goes on:
These are extraordinary times. The global financial system has gone through the worst crisis since the Great Depression, and the effects are only beginning to wind their way through every facet of the economy. It’s not an understatement to say that nearly every business will be impacted by what has unfolded in the past weeks, and this is true for Silicon Valley as well.
So far, so good—and, luckily for Musk, many readers probably went no further than this because of the unreadable white-sans-serif-on-black-background body copy.
At Tesla, we have decided that the wise course of action is to focus on our two revenue producing business lines—the Roadster and powertrain sales to other car companies. In the Roadster, Tesla has a unique product with a large order book that continues to grow, despite softness in the automobile sector. Our powertrain business is profitable today and is also growing rapidly.
First, who’s “we”? Regarding decisions this momentous for all the organization’s constituencies, the CEO and/or a number of top leaders ought to take specific responsibility. The guy in the mailroom didn’t decide. The accounts payable gal didn’t decide. Who decided?
Second: You’re going to “focus on our two revenue producing business lines”? This is like the old Army joke about the drill sergeant who’s trying to be sensitive as he breaks some news to a certain soldier. “Everybody whose grandmother didn’t die yesterday step forward. Not so fast, Murphy!”
You know the guy who blogs that he’s going to “focus on our two revenue producing business lines” went straight home to his wife and told her, “We dumped our eight loser lines today.” Why should he be less candid with employees and others who really have skin in the game?
Our goal as a company is to be cash-flow positive within six to nine months. To do so, we must continue to ramp up our production rate, improve Roadster contribution margin and reduce operating expenses. At the same time, we must maintain high production quality and excellent customer service. …
When executives say, “We must cut costs, improve productivity and maintain quality,” they need to anticipate (and address) the question from investors: If you could do all that without sacrificing a thing, why did you wait until now?
One of the steps I will be taking is raising the performance bar at Tesla to a very high level, which will result in a modest reduction in near term headcount. To be clear, this doesn’t mean that the people that depart Tesla for this reason wouldn’t be considered good performers at most companies—almost all would. However, I believe Tesla must adhere more closely to a special forces philosophy at this stage of its life if we aspire to become one of the great car companies of the 21st century.
The headcount reduction is modest if it’s someone else’s head being reduced. He’s also stretching credulity to the breaking point by discussing in the same paragraph layoffs and becoming “one of the great car companies of the 21st century.”
There will also be some headcount reduction due to consolidation of operations. In anticipation of moving vehicle engineering to our new HQ in San Jose, we are ramping down and will close our Rochester Hills office near Detroit. Good communication, tightly knit engineering and a common company culture are of paramount importance as Tesla grows. …
Again, he’s acknowledging only in the most backhanded way that the company—his company—had major problems before the financial downturn came along. Namely, a disorganized engineering operation, bad communication and an incoherent corporate culture.
The Tesla investors and I are unequivocally dedicated to ensuring the success of Tesla. If you have bought a car from Tesla or are thinking of doing so, please know that I personally stand behind delivering a product that you will love and continuing to develop new models in the future. We are not far from being cash flow positive, but, even if that threshold ends up being further than expected, I will do whatever is needed to ensure that Tesla has more than sufficient capital to get there.
The trouble is, after seeing so much apparent denial and reality-dodging in the above paragraphs I’m not sure I believe his promises. Do you?
I’d like to thank the loyal customers of Tesla that have stood by us through thick and thin. Beyond delivering a great Roadster, Tesla will find other ways to reward that loyalty, including among other things an exclusive preview of our upcoming Model S sedan.
This is the reason that internal communications have to be separate from—and in advance of—external communications. For the employees, and even investors, who found out about the layoffs through this blog—or heard from their CEO on the subject for the first time—this “exclusive preview of our upcoming Model S sedan” business has to be infuriating.
It may be unfair to single out this blog, which isn’t spectacularly bad. But that’s why we did single it out: Because it’s typically bad, and for that reason executive communicators everywhere are well advised to go forth—and do otherwise.
What an empathetic layoff blog looks like
The Nov. 6 layoff blog entry by online retailer Zappos CEO Tony Hsieh (http://blogs.zappos.com/blogs/ceo-and-coo-blog/2008/11/06/update) is the opposite of Telsa’s callous entry.
Key phrases show a chief executive who’s addressing the scope and pain of the situation, who seems eager to show employees the full context of the decision, and who knows how to balance the sadness of the day with hope for the future.
- “Today has been a tough, emotional day for everyone at Zappos. We made the hard choice of laying off about 8% of our employees. The layoffs will affect almost every single department at Zappos. … This is one of the hardest decisions we’ve had to make over the past 9.5 years, but we believe that it is the right decision for the long term health of the company. The rest of this email will explain why …” (And it does, in clear language and with links to related industry articles.)
- “We’ve decided the right thing to do for the company is to be proactive instead of reactive. We are proactively cutting back some of our expenses today so that we can take care of our employees properly … offer them more than the standard 2 weeks severance (or no severance) that most other companies are giving.”
- “Within the footwear category, we are the online market leader. When times are tough, the strongest players in any market have an opportunity to gain even more market share, even if overall growth may be slower. … For the rest of 2008 as well as for 2009, we anticipate continuing to grow year over year.”
- “I know that many tears were shed today, both by laid-off and non-laid-off employees alike. Given our family culture, our layoffs are much tougher emotionally than they would be at many other companies.”
And, in the long run, because of sensitive leadership communications like this, much more palatable.