The New York Times lauded it as an example of how, “in the age of transparency, the layoff will be blogged.” We hope they’re blogged better than this.
Late last year Vital Speeches editors were by alerted by The New York Times to a CEO’s blog entry. The Times article ballyhooed the notion 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 … 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.