The Power of Aggressive Goals: Lessons from Elon Musk’s Playbook
Although there have been a number of timelines at Tesla and SpaceX that have been pushed back, and pushed back again, no one can dispute that Tesla has risen to become the definitive dominating automotive giant in the world at an impressively fast speed.
Aggressive outcomes are impossible without aggressive effort…
So where does the aggressive effort come from?
Firstly it comes from the awesomely important missions Elon is embarking on…
And also it comes from the agressive effort because of the aggressive timelines Elon sets for company milestones, combined with many other optimizations.
Because without an optimized work force Elon’s 90,000+ employees would not optimize and deliver their dominating results.
By setting these aggressive timelines engineers and employees must stretch their ability to innovate and work long hours to the limit.
In the Ted Talk “Elon Musk: A future worth getting excited about” TED’s Chris Anderson asks Elon about timelines and says:
“And so in general, when people talk about Elon time, I mean it sounds like you can’t just have a general rule that if you predict that something will be done in six months, actually what we should imagine is it’s going to be a year ot it’s like two-x or three-x, it depends on the type of prediction…
Is there an element that you actually deliberately make aggressive prediction timelines to drive ambitious people to be ambitious? Without that nothing gets done?“
Elon replied: “Well, I generally believe, in terms of internal timelines, that we want to set the most aggressive timeline that we can.
Because there’s sort of like a law of gaseous expansion where, for schedules, where whatever time you set, it’s not going to be less than that. It’s very rare that it’ll be less than that… But as far as our predictions are concerned what tends to happen in the media is that they will report all the wrong ones and ignore all the right ones.”
And Elon works hard to ensure all of the predictions he makes come true, sooner or later.
Elon certainly seems like an example of how the harder you work the more momentum you can gain.
Elon has led by example and has sometimes worked for so many hours straight when he did sleep he would sleep in the conference room, or even on the factory floor.
Debug Your Thinking: A Guide to Elon Musk’s Self-Correction Process
In a Starbase Factory Tour with the Everyday Astronaut YouTube channel Elon explained his five step engineering process which he explains he wants everyone at Starbase to implement rigorously:
“The sort of five step process is:
(1) First make your requirements less dumb.
If the requirements are definitely dumb; it does not matter who gave them to you.
It’s particularly dangerous if a smart person gave you the requirements, because you might not question them enough.
Everyone’s wrong. No matter who you are, everyone is wrong some of the time.”
(2)Try very hard to delete the part or process.
This is actually very important. If you are not occasionally adding things back in you are not deleting enough.
parts are not being added back into the design at least 10% of the time, not enough parts are being deleted.
Musk noted that the bias tends to be very strongly toward “let’s add this part or process step in case we need it.”
Additionally, each required part and process must come from a name, not a department, as a department cannot be asked why a requirement exists, but a person can.
(3) Simplify and optimize the design.
This is step three as the most common error of a smart engineer is to optimize something that should not exist.
(4) Accelerate cycle time.
Elon says: “You’re moving too slowly, go faster! But don’t go faster until you’ve worked on the other three things first.”
(5) Automate.
An important part of this is to remove in-process testing after the problems have been diagnosed.
If a product is reaching the end of a production line with a high acceptance rate there is no need for in-process testing.
Everyone is wrong sometimes. Work on being less wrong and you’ll get the right results.
On a call in 2018 with investment bankers where Elon refused several bone headed comments and told day traders or investors afraid of volatility straight up not to buy Tesla stock because:
“I am not here to convince you to buy our stock…I could care less.”
What Elon does care about is innovation.
1. Innovation is What Matters Most
Innovation is defined as when you: Make changes in something established, especially by introducing new methods, ideas, or products.
He shared some powerful insights about innovation on the on investors call:
“What matters is the pace of innovation. It is a fundamental determinant to competitiveness…
Let’s say competitors, maybe they come out with something new every six years. We’re maybe every two to three years.
So if our innovation is let’s say twice that of any given competitor…
And this is true generally of companies in any industry…
Whichever company has the highest rate of innovation, unless that company is actively killed by it’s competitors in some way that’s nefarious, or shoots itself in the foot, it will at some point exceed those competitors…
Like this is obvious that this would occur with Amazon and Wal-Mart because Wal-Mart’s rate of innovation was negligible.
And Amazon’s was very high. The outcome was obvious a long time ago.”
[Here is an image of Amazon Robots in one of their warehouses]
In a more recent interview about the AxelSpringer Award (Which Elon won) he echoed similar sentiments saying:
“The company with the higher rate of innovation will unequivocally win long term.”
The lesson here is clear: Innovate or you will lose ground to companies who do.
2. Accelerate Your Rate of Innovation
Moreover the more aggressively you innovate and iterate the faster you will dominate.
“Innovation per year is what matters. Not innovation absent time. Because if you want to make say 100% improvement in something and that took 100 years, or one year, that’s radically different…
So it’s like: “What is your rate of innovation? matters and is the rate of innovation accelerating or decelerating?”
The part minimization of the SpaceX Raptor engine is a great example of efficiency promoting innovations.
At InvestHK Elon said: “Innovation comes from questioning the way things have been done before…
And if in the education system you’re taught not to do that that will inhibit entrepreneurship.
Interviewer: “Being able to question what you were taught?”
Elon: “Being able to say: ‘Is there a better way?”
Elon has innovated with Tesla to the point where multiple sources, and undeniable facts, confirm Tesla has created the best car ever.
That’s the game changing level of innovation you need to have a position in the marketplace where you are in a category of your own.
Here are some of Elon’s quotes on innovation:
“Starting and growing a business is as much about the innovation, drive, and determination of the people behind it as the product they sell.”
“Great companies are built on great products.”
“Failure is essentially irrelevant unless it is catastrophic.”
Although Elon does not strive from failure, he certainly does not hide from it either.
His ability to push on and succeed with SpaceX after their first three rockets failed and he was down to his last money is why SpaceX made it to orbit when they did.
3. Failure is An Option
Facing failure head on and learning from it is a lesson I learned the hard way. Once I got a speeding ticket and rather than setting the court date in my calendar I shoved the ticket in a folder and forgot about it.
Since I missed the court date I got the maximum fine in my absence.
Had I faced that situation head on maybe I would have emerged successful.
At least I would have gotten a lesser fine, or perhaps the cop would not have shown up for the court date and my ticket would have been dropped.
These days no matter how difficult the issue I might be facing I deal with it head on because that is the only way to resolve the issue at hand.
Action is the antidote to despair.
And facing failure is the only way to overcome it.
As Elon says:
“Failure is an option here. If things are not failing, you are not innovating enough.”
“If every time somebody came up with an idea it had to be successful you don’t get people coming up with examples.”
Failure is not to be feared. In fact just the opposite: It should be encouraged!
With the Cybertruck, for example, at first the window broke when they unveiled the truck. This event did not derail them.
Perhaps the publicity it created even helped them make more sales!
Tesla produced a shirt even, which shows the broken window.
Broken window or not Tesla has produced the safest pickup truck on the market.
With more experiments in innovation, more failures will occur, and by acting on them you will ultimately end up with more successes and a faster pace of innovation.
Tesla having safety as the #1 priority of their company certainly helped them innovate and achieve their 5 star safety rating as well.
4. Gaining a Competitive Advantage
Innovation is absolutely a vital key to gaining a competitive advantage in your industry…
At MIT Elon explained “In terms of our competitiveness, it mostly comes down to our pace of innovation. Our pace of innovation is much, much faster than the big aerospace companies or the country driven systems…
This is generally true: If you look at innovation from larger companies and smaller companies, smaller companies are generally better at innovating than larger companies…because smaller companies would die if they didn’t try innovating.”
Innovate or die. And don’t let the small size of your company deter you…small, smart and technically strong often trumps large, clunky and wasteful.
Elon is an extremely strong thinker and as such the intellectual waters he swims in and the decisions he makes may appear risky to others but make perfect sense to him.
Almost everything new has an element of fear at first.
Without an element of fear and risk a great reward is rarely found.
Safe is risky and risky is safe.
Because innovation is how you win and innovation requires risk.
Avoiding innovation is a bigger risk than not innovating at all.
Innovation requires a focus on what could be rather than what already is.
5. What Matters is The Rate of Innovation
Elon has said “What matters is the rate of innovation.”
“What exactly is innovation?” you might be wondering. At Tesla AI day Elon explained “In general innovation is how many iterations and what is the average progress between each iteration. And so if you can reduce the time between iterations the rate of improvement is much better.”
Innovating more effectively and rapidly than your competition gives your business the best chance of success…
So always be innovating!
The faster your rate of innovation the faster your business will rise to power and capture market share.
Tesla has been innovating faster than other car companies and the compounding effect of all of these innovations are an essential part of the reason why Tesla is now the most valuable car company with no signs of slowing down.
Amazon has been innovating more than Wal-Mart and this makes it clear how Amazon has been gaining market share from Wal-Mart.
6. Innovation is Future Focused
Innovation is future focused and being future focused is key if you want a more fantastic future.
Elon certainly is and says:
“I think within the next five years we will see the electrification of aircrafts. First propeller, then turboprop, then jet engines.“
“What is important is that we establish a self-sustaining city on Mars so the future of consciousness and life as we know it can survive.“
Elon goes on about innovation in an interview with Offshore Northern Seas.
“Establish an expectation of innovation, and the compensation structure must reflect that…there must also be an allowance for failure because if you are trying something new, necessarily there is some chance it will not work.
If you punish people too much for failure they will respond accordingly and the innovation you get will not be very incremental.“
So keep thinking ahead because the future is where we’ll be spending the rest of our lives.
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