- Elon Musk is expected to serve as temporary CEO of Twitter.
- Musk amassed $7.14 billion in equity commitments toward the purchase of the social media platform.
- It's a playbook that other CEOs can hold up as a case study, to both aspire to and avoid.
- For more stories go to www.BusinessInsider.co.za.
Elon Musk is expected to serve as temporary CEO of Twitter, according to CNBC.
Musk amassed $7.14 billion in equity commitments toward the purchase of the social media platform, according to an SEC filing on Thursday. New investors include Oracle co-founder Larry Ellison who will contribute $1 billion.
In the filing, Musk stated he is open to receiving "additional financing commitments." Adding, should additional financial contributions be made, they "may replace portions of the financing commitments previously reported."
The billionaire's bid to buy Twitter was accepted last month, ending a roller-coaster of back-and-forth interactions between the tech CEO and the social media giant.
His defiance of the status quo, coupled with other key attributes, like his ability to sell his vision and solve problems in innovative ways, provides lessons for other CEOs, leadership experts said. At the same time, Musk's raw outspokenness and his abrasive way of treating people are cautionary tales of what not to do.
"This takeover is typical Elon," Anna Crowley Redding, author of "Elon Musk: A Mission to Save the World" said. "He likes skin in the game, whether it's financial, intellectual, time, he is all in."
The CEO of Tesla and SpaceX tweeted mid-April an SEC filing containing an unsolicited offer to buy Twitter for $43 billion, hinted at a tender offer in a cryptic post, then revealed in another SEC filing that he had lined up $46.5 billion to finance the deal.
Twitter will be acquired by an entity wholly owned by Musk for $54.20 per share in cash, in a transaction valued at about $44 billion. The acceptance of the offer marks an about-face by Twitter from the initial lukewarm reception.
Musk's Twitter takeover is his latest unorthodox move, and it's typical of how he operates. From reimagining the car industry and trying to colonise Mars to flouting government laws and tweeting whatever is on his mind despite market backlash, Musk shows complete disdain for convention in his personal and business interactions. According to Redding and other experts, Musk has been interested in improving the world of social media, so he decided to do it himself.
"It's both shocking and classic Elon," David Yoffie, a leadership professor at Harvard Business School who's published research on Musk, said. "It reflects his extreme self-confidence that he can make businesses work where others fail."
Lean into your vision
Musk, 50, has an uncanny ability to get consumers, investors, and employees behind his mission, three leadership sources said. His secret is that he taps into people's yearning for inspiration — something the general public is increasingly seeking in its business leaders.
Exhibit A: He was able to continuously secure billions in funding even though Tesla didn't report its first full-year profit until 2021, after 18 years in business. Exhibit B: He continues to garner global support for SpaceX despite numerous explosions.
He doesn't just sell companies, he sells answers to big problems weighing on humanity's future, Crowley Redding said.
Tesla was his answer to weaning the world off gas, and he coupled eco-friendly transportation with luxury. SpaceX aims to secure humanity's future through space colonisation — taking something typically thought of as a far-off, government-only task and making it a private venture, speeding up the mission in the process.
Now he's promising a new era for free speech and connectivity. "Twitter has extraordinary potential," Musk said in a letter to the company's leadership. "I will unlock it."
"He's an expert in defining the mission, communicating the mission, and getting your employees to buy into that mission," said Crowley Redding, who has researched Musk for four years. "You're not going to work for an Elon Musk company and sit back, come in, and clock in, clock out. You are going to work harder than you've ever worked in your whole life because the stakes are so high."
The takeaway for CEOs and aspiring leaders is to tap into your vision, your purpose, and be clear to all stakeholders about it, said Vitaliy Katsenelson, the CEO of Denver-based investment firm IMA and author of the leadership book, "Soul in the Game."
"Musk has soul in the game," Katsenelson, who also wrote "Tesla, Elon Musk and the EV Revolution," said. "You can see it and feel it. He puts his everything into what he's working on." Pouring your everything into your work is something leaders should copy from Musk, Katsenelson added.
The tech visionary also convinces people to take the long-term bet on him, said Harvard's Yoffie, author of the leadership book, "Strategy Rules."
"He is the most visionary CEO on the planet today," Yoffie said. "He's inspired enough confidence that he can ultimately do these incredible things. That's what gives capital markets the permission to go after these goals long term."
Look at things from a different perspective
In engineering and physics, there's a mode of thinking called "first-principles thinking," and Musk has attributed it to his success.
First-principles thinking is essentially a consideration of how you would solve a given problem if you were an alien who's never seen or heard of the problem before. Pay no mind to how things have been done in the past, and reject every prior assumption so you can start fresh. Embracing this mindset has driven Musk's hiring decisions and what he demands of his workers.
Imagine, for example, designing car-door handles one way your whole career and then being asked to come up with something completely different. Then, feeling satisfied with your new design, you're told to scrap it and create a completely new one for the next model. Such is life under the world's greatest visionary.
"He wanted people to say, 'Well, we've always done things this way because of X reason, but maybe we could do it another way if we disregard Y,'" Tim Higgins, author of "Power Play: Tesla, Elon Musk, and the Bet of the Century," said. "It was sort of a startup mentality."
Be authentic, but to a point
Musk has done things most business leaders would get fired for, some more serious than others. He smoked weed while taping a podcast with Joe Rogan, and that same year called a rescue diver in the 2018 Thai cave-rescue mission a "paedo," a slur for a pedophile (he later apologised).
He also kicked off a legal battle with the Securities Exchange Commission after tweeting he had "funding secured" to take Tesla private at $420 per share, which Musk at one point said was a joke about weed. In 2017, SpaceX put out a compilation video mocking its many rocket explosions and failures.
"There are clearly things that he's doing that most people are not going to be able to get away with in their normal, day-to-day careers," Higgins said.
What makes Musk so engaging — and bulletproof — is his authenticity, said Crowley Redding. Musk has built a reputation for being unapologetically himself, something few image-conscious CEOs can pull off. For instance, she noted how Musk's responses in interviews don't appear to be pre-written.
She also noted that CEOs shouldn't replicate some of the more wild things Musk has said and done (like his recent tweet comparing Microsoft co-founder Bill Gates to a pregnant man), but said it wouldn't hurt most executives to be a bit more off-the-cuff to seem more relatable.
"CEOs often focus on projecting confidence and perfection and poise at the expense of identifying the problem they're trying to solve and working to solve the problem," Crowley Redding said. "Elon is unconcerned with people thinking he's perfect."
Know how and when to break the rules
Musk is desperate to find answers to big problems, so he seeks the most innovative solutions. Many times, that means he breaks the rules or veers from convention — for better or worse — Crowley Redding said.
While breaking the rules has been a driver of innovation at his companies, it's also led Musk to become ensnared in a number of messy, public legal battles.
Musk currently faces SEC trouble over potential securities-law violations for filing notice of his ownership stake in Twitter later than required. In 2017, the National Labor Relations Board found him guilty of breaking labour laws for his tweets threatening employees over unionisation efforts.
"He has a tendency to be reckless," Harvard Business School's Yoffie said.
Musk also breaks some of the rules regarding how leaders should treat employees.
"He has a very good eye for hiring talent, but the problem over time has been he doesn't always listen to that talent and he burns through them very quickly," Higgins said. "They leave either because they've given up on him, they've burned out on him, or he's burned out on them."
"The worst part is the toxicity that Elon creates — unrealistic stretch targets without a realistic plan in order to achieve them," one former manager who worked directly with Musk previously told Insider. "It's a culture in which, if you don't have a solution to a problem and you don't have that problem resolved within a few days or a week or two, you're gone."
Yoffie likened Musk's leadership style to the late Apple founder and CEO Steve Jobs, who was said to have been unkind to employees on multiple occasions. "Without question, he could be more empathetic," Yoffie said of Musk. "Like Jobs, Musk has done things that are characteristic of bad leadership, specifically treating people very poorly."
Higgins, the author and Wall Street Journal reporter, agreed. "The question I think is, 'How long can Elon get away with some of this stuff?'.