September 18, 2018

When Bold Leadership Turns Into Bad Leadership

Posted on September 18, 2018April 12, 2024 by Staff Writer

Bold leadership provides powerful direction to businesses when navigating competitive markets and dynamic environments. But too much of anything can be detrimental, and boldness poorly contained is downright reckless. When bold leaders repeatedly overstep key boundaries, they move ever closer to becoming bad leaders. With this in mind, this article explores the recent trend on Elon Musk leadership.

Given recent events, it appears Musk has taken boldness too far. And as a result of bad leadership, his company and his shareholders are suffering the consequences.

Defining Bold Leadership in Action

It’s no secret that leadership makes or breaks many businesses. In competitive markets, leadership can provide the necessary direction, motivation, and vision to help companies succeed. Bold leaders accomplish this with ease. But what separates bold leaders from bad leaders?

Certainly, bold leaders are visionary, have excellent communication abilities, and powerful interpersonal skills. But their bold nature includes many other valuable assets that set them apart.

The following traits can best be used to define bold leadership:

Constantly seeks and embraces change for competitive advantage
Defines a clear vision, and communicates it effectively to others
Maintains optimism with a strong sense of commitment and perseverance
Invites and utilizes input from a variety of sources for effective decision-making
Effectively delegates tasks and responsibilities for optimal outcomes and efficiency
Seeks top talent while promoting inclusive environments and a team-oriented approach
Grounds strategies in values, principles and a customer-centric perspective
Balances the needs of all stakeholders in developing innovative and creative strategies

Questions About Elon Musk’s Ability to Recruit (And Keep) Top Talent

By all accounts, Musk is a visionary and a genius.

His corporate career highlights many incredible accomplishments, ranging from PayPal to SpaceX. He has repeatedly shown perseverance and commitment in many endeavors. He has also demonstrated an ability to be dynamic and rolls with a changing market. And he is extremely charismatic, outspoken, and forceful in his public communication. Certainly, these attributes would better align with bold leadership than bad leadership.

But there is more to the story. While the previously mentioned characteristics align with bold leadership, Musk lacks many other features of a bold leader today.

Consider his ability to recruit and use top talent. Tesla Inc. remains without a Chief Operations Officer and has for some time. The Chief Accounting Officer recently left after being there for only a month. Rumors abound that Tesla’s Vice President of Global Finance may be exiting as well. Unlike with bold leadership, bad leaders struggle to keep top talent due to poor organizational cultures. Not only does bring into question Musk’s ability to create team environments, but it also raises concerns about his interpersonal skills.

Questions About Elon Musk’s Values and Priorities

Bold leadership establishes strategies based on sound principles and values, while bad leadership may not.

Bad leaders tend to focus too much on their own self-interests rather than those of the company or customer.

In recent weeks, Musk has demonstrated questionable behaviors in both respects. In regards to values, Musk recently appeared on a podcast with Joe Rogan, smoking marijuana and drinking whiskey. Back in July, Musk also called one of the Thai caver rescuers a pedophile without justification. Why? Because the man suggested Musk’s offer to help with a mini-submarine was a PR stunt. These are hardly the values typical of an effective bold leader.

Each of these indiscretions required Musk to apologize, and each has resulted in a drop in Tesla’s stock price. But these behaviors are not the only ones reflective of bad leadership.

During quarterly earnings interviews, Musk has berated analysts for being ignorant and uneducated. Likewise, he has taunted short-sellers on numerous occasions, stating they undermine the value of the company. Unlike bold leadership that fosters respect for others, Musk seems to be doing the opposite. In the process, he is isolating himself while undermining Tesla’s value.

When is Bold Leadership bad leadership?

Questions About Musk’s Ability to Share the Spotlight

Musk’s ability to embrace media is well recognized. His attention-grabbing efforts have coincided with the design of luxurious electric cars, the launching of rockets, and transportation tunneling. When done well, these opportunities in the spotlight can be helpful.

Bold leaders use such platforms for communication, vision, and inspiration. In contrast, bad leaders create distractions and hinder their firms by using the media ineffectively. Musk most recently portrays the latter, as he appears to be progressively more consumed by his own ego.

Is Elon Musk Wearing Too Many Hats?

Not only is Tesla without a Chief Operations Officer, but Musk also serves as both Chairman and CEO. In addition to his struggle retaining top talent, he also has difficulty delegating control to others.

Even if Musk could handle all of these positions at Tesla, he is only involved in the company part-time. SpaceX and other endeavors consume a significant portion of this time. Musk admitted as much during a recent New York Times interview, describing how burdened he is with responsibilities.

This inability to effectively delegate tasks to others and share control reflects key aspects of bad leadership.

Is Tesla’s Board of Directors a Parent, Puppet or Both?

An effective board of directors exists independent of the CEO of the company, has autonomy, and possesses the power to hold executives accountable. When it comes to Tesla, none of this is true.

Musk himself is the largest shareholder and owns a fifth of the outstanding stock of the company. In fact, he recently leveraged his position to threaten a conversion of the company to a private entity. Tesla’s board has little autonomy or power to reel in bad leadership. Though they may seem to serve as parents to an adolescent-acting Musk, they are better described as puppets.

Plenty of evidence exists to support this.

Two proxy advisory firms have recommended that shareholders oust the existing director of the board. This did not happen.

Other recommendations have called for the board to split the roles of CEO and Chairman into two positions. This also has yet to occur.

A big part of the problem is that the board is composed of members with conflicts of interest. In addition to Kimbal Musk, Elon’s brother, four other board members serve as directors at Musk’s other companies. With Musk’s majority share of Tesla stocks and divided interests, Tesla’s board remains unable to control his bad leadership tendencies.

Bold leadership is good… until it becomes too bold.

Being Too Bold Can Have to a Negative Impact

For any company, bad leadership can steer the business in a less than optimal direction. For Tesla, this tendency seems to be exponentially true. This is where Musk’s boldness is uniquely detrimental.

For example, since he threatened to take Tesla private (and didn’t), stock prices have dropped 27 percent. Likewise, Tesla has repeatedly (if not consistently) failed to meet production forecasts. And the company is over $9 billion in debt with revenues paling by comparison.

When bold leadership isn’t backed up with performance, or threats are made without action, confidence falls. This is exactly where Tesla finds itself at the moment.

“Tesla Inc. is under investigation by the Justice Department over public statements made by the company and Chief Executive Officer Elon Musk, according to two people familiar with the matter. The criminal probe is running alongside a previously reported civil inquiry by securities regulators.” – Bloomberg.com

Is It Too Late to Change Course?

Despite Musk’s recent tirades and outbursts, Tesla remains a bold business with tremendous opportunity for success. Musk remains one of the most innovative, charismatic, and visionary leaders in the world. Thus, the bad leadership tendencies of late certainly can be reversed. But some significant changes need to take place.

And Musk himself will have to dial back his boldness a bit in the process.

Here are a few considerations that Musk should pursue to get Tesla back on track.

Relinquish CEO duties to a qualified candidate
Accept an alternative leadership role that aligns with the expertise and time availability
Restructure Tesla’s board of directors without conflicts of interest or dependencies
Expand proxy voting opportunities for shareholders to select board members
Create greater trust through financial transparency and authenticity of media statements
Revisit Tesla’s core values and structure strategies accordingly
Adopt constructive communication and stifle volatile, reactionary impulses

The actions of bold leaders like Musk, who is slightly eccentric and extremely intelligent, can be hard to predict.

But even so, being too bold can result in bad leadership. The message here is not one of doom and gloom. However, warning flags are flying, and changes in leadership approaches are needed for Tesla to excel.

Right now, those changes involve Musk. And with Musk in the driver’s seat, he will be the one deciding whether or not to shift gears.

The future of Tesla depends on it.

Elon Musk’s Leadership Has Now Turned From Bold To Bad Cartoon

Posted on September 18, 2018November 1, 2019 by Edward Kopko

Elon Musk’s recent actions point to a stark example of bad leadership. So, what are the details surrounding why Musk’s leadership turned from bold to bad?

Gauging the Effectiveness of Your Employee Resource Group

Posted on September 18, 2018August 25, 2021 by Staff Writer

They began in the 1960s as a mechanism of change, a sort of corporate antidote to the turbulence of the outside world. But though times have changed, the concept of Employee Resource Groups (ERGs) has taken root. These days they are everywhere.

Employees can now join organizations within their own company, with the benefits of membership ranging from mentoring and career guidance to volunteer work and social activism.

Roughly 90% of the Fortune 500 companies boast ERGs of some sort. Though they might go by different names, such as Affinity Groups, Business Innovation Groups, Employee Network Groups, and more, they share a common denominator. Each is meant to serve as a platform for the underrepresented.

Just who do employee resource groups represent? According to a recent survey, the top three ERG focus areas centered on race/ethnicity, sexual orientation, and women. Veterans and those with disabilities were next on the list. Religion-based groups made up the smallest percentage.

A breakdown of the most common focus areas of employee resource groups.

What Are the Benefits of Employee Resource Groups?

What are the benefits of employee resource groups?

For employees, they provide:

Networking opportunities with others at the company who share similar backgrounds
Access to mentoring from more tenured and experienced members
Developmental programs to facilitate professional growth
Education to stakeholders about the unique challenges and interests of their constituency
Business impact through their insights and input

For employers, they can help raise awareness of social issues, drive employee satisfaction (which can positively affect productivity), and enable a business to keep its talent.

“Nearly any employer could realize benefits from Employee Resource Groups – and research has consistently shown that ERGs help employers retain talent.” – BizJournals.com

Business areas most commonly impacted by employee resource groups.

Employee resource groups are usually led by elected members. They are also supported by voluntary effort on the part of engaged members and sponsored by specific senior executives who are assigned to each ERG to provide guidance and visibility.

In addition to the time and energy invested by all these stakeholders, a company’s diversity office typically provides a budget to each ERG to fund their activities and events.

Employee resource groups can take a fair amount of monetary and non-monetary resources to organize, lead, maintain and support. Most companies take a leap of faith in terms of supporting them because, on a moral and ethical level, they are the right thing to do to provide an inclusive environment for diverse employees.

But are ERGs truly worth the cost? Do the resources spent translate into any measurable metric of performance?

How to Determine if Your Employee Resource Group Is Effective

Gauging the effectiveness of an employee resource group can be a tough nut to crack. But there are a number of factors that can be considered, and when taken as a whole, the numbers crunched can give a fairly accurate reading.

The sum of the following ten performance metrics can quantify an ERG’s effectiveness:

Engagement

Market Share: What percent of the employees at your company from a given constituency are members of the ERG centered around that particular constituency? In other words, how many LGBT employees are members of the LGBT ERG, how many women are members of the women’s ERG, etc.? The higher the percentage, the greater is the likelihood of engagement.

Less than 10%: 0 points
10-20%: 5 points
Greater than 20%: 10 points

MindShare: What percent of the members of the ERG are actively involved in doing the work of the employee resource group? In other words, how many members of the ERG are participating? The higher the number, the greater is the likelihood of successful execution of initiatives being undertaken by the ERG.

Less than 5%: 0 points
5-10%: 5 points
Greater than 10%: 10 points

Heart Share: What are the engagement scores of ERG members relative to non-ERG members on the company survey? The higher the positive differential, the greater the likelihood of retention of members.

Less than 5%: 0 points
5-10%: 5 points
Greater than 10%: 10 points

Development

Events: How many development events are organized by the ERG in a year? Are there many ERG-related events or just a few? The greater the number of events, the greater the likelihood of developmental opportunities for members.

1-2 per year: 0 points
1-2 per quarter: 5 points
1-2 per month: 10 points

Attendance: What is the average percentage of ERG members that attend an event? The greater this number, the greater the likelihood of developmental impact for members.

Less than 10%: 0 points
10% – 20%: 5 points
Greater than 20%: 10 points

Sponsorship: What percentage of ERG members are actively sponsored by executives? How many receive guidance and mentorship from an executive member of the employee resource group? The greater this number, the higher the likelihood of professional progression of members.

Less than 10%: 0 points
10% -20%: 5 points
Greater than 20%: 10 points

Accomplishment

Areas of Impact: How many different areas within the business and the community does the ERG have projects, e.g. recruiting, product development, onboarding, etc.? The larger the number of areas, the larger the breadth of the business impact of the ERG.

1 or less: 0 points
2-3: 5 points
4 or more: 10 points

Metrics: On how many quantifiable financial metrics is the ERG able to show impact e.g. cost per recruit, on-boarding cost per new hire, revenue generated by product re-design? The more the metrics, the larger the depth of the business impact of the employee resource group.

1 or less: 0 points
2-3: 5 points
4 or more: 10 points

Impact: What is the extent of the impact on chosen metrics made by the ERG, e.g. improvement percentage in cost per recruit, onboarding cost per new hire, revenue generated, etc.? The larger the percentages, the greater the likelihood of robust funding for the employee resource group.

Less than 5%: 0 points
5% – 10%: 5 points
Greater than 10%: 10 points

Sentiment

Favorability: What percentage of different stakeholder groups, e.g. ERG members, leaders, managers of members/leaders, sponsors, non-members, non-sponsors, and support personnel, have a highly favorable view of the employee resource group? The higher this number, the higher is the likelihood of sustainability of the employee resource group.

Less than 20%: 0 points
20% – 40%: 5 points
Greater than 40%: 10 points

Now tally up the points. The following totals should point towards the effectiveness of your business’ employee resource groups. For instance, if the sum points of your ERG’s market share, mindshare, heart share, events, attendance, sponsorship, areas of impact, metrics, areas of impact, and favorability is 76 or above, your ERG is working fantastically and is a definite value-add to your company.

Overall scores:

0 – 25: Forming

26 – 50: Developing

51 – 75: Performing

76 – 100: Outstanding

Suri Surinder, Founder and CEO of CTR Factor, Inc.

Mr. Surinder is co-founder & CEO of CTR Factor, a minority-and woman-owned advisory services firm with a successful 9-year track record of providing one-of-a-kind speaking, training, assessment, coaching, consulting and digital services to 140 companies in 12 different industry sectors on the topics of leadership, diversity, and inclusion. Mr. Surinder also serves as a Strategic Content Partner to Bold Business on an innovative learning platform for behavior change called Nuggets Training, and as CEO of the CTR Factor Leadership Institute at Diversity MBA magazine. Mr. Surinder’s overall experience spans 30 years as an executive, consultant, board member, author, entrepreneur & professor. His Linked-in profile has earned 2,750+ endorsements in 50 different competencies. His Linked-in posts have garnered 1.5 million global views, & he has 51,000+ connections & followers combined. He holds a BS in Civil Engineering, MS in Structural Engineering, and an MBA in Marketing.

Investing in Uber—Toyota Backs the Company With $500 Million

Posted on September 18, 2018March 24, 2024 by Staff Writer

Toyota Motor Corporation investing in Uber is a bold idea that is both surprising and expected. With the concept of self-driving cars taking the industry by storm, Uber veritably pulled their autonomous vehicles (AVs) off the road just a few months prior. So, why is the ridesharing giant suddenly back in the game?

In truth, other big names like General Motors have Maven, while Lyft has always been a steady competitor. Notably, Toyota’s generous $500 million put into investing in Uber went to install autonomous tech into their Sienna minivans. Honestly, time will tell how a colossal of a decision investing in Uber will prove to be as days—and even years—go by. Nonetheless, this collaboration with Uber may turn a great potential into something that may change the game even further.

Third Time’s the Charm?

Indeed, it’s not the company’s first collaboration. Nevertheless, this new self-driving Uber may just be the nudge that takes both them and Toyota to the next level. According to Uber spokeswoman Sarah Abboud, their company now operates on three different models:

Volvo—Uber buys their vehicles and gears them with self-driving technologies. This action allows the company to maneuver on the Uber network directly.
Daimler—Uber lets the partner own, develop, and steer their autonomous vehicles on the Uber network.
Toyota—The bold idea is that a third party is involved in owning and operating them. They deploy these vehicles to the Uber network, with their self-driving systems powering the Toyota Sienna minivans. Still, the mutually agreed upon third party has not been selected, according to Jeff Miller, Uber’s head of business development for strategic initiatives.

Investing in Uber—A Deliberate Move

Abboud also confirmed that Toyota’s groundbreaking investment was part of Uber’s Series G-1 preferred and valued at a whopping $72 billion. This investment is something that may just let the company bounce back from its series of issues and scandals over the past year.

As a matter of fact, in February 2018, they settled a lawsuit involving trade secrets against Waymo—Google’s driverless initiative. Allegedly, a former Waymo engineer took their trade secrets to another company which was then quickly snatched up by Uber. They settled it via a 0.34 percent equity share of Uber for Waymo—estimated to be worth about $244 million.

Safety Is Priority

Toyota’s recent step in investing in Uber is a move of confidence from the Japanese multinational auto manufacturer, ever since the test run of self-driving Uber vehicles in Arizona resulted in a woman’s death in March 2018. Not to mention, Toyota suspended their own autonomous testing programs in California and Michigan since Uber’s fatal incident.

Eric Meyhofer, Head of Uber Advanced Technologies Group, wrote a statement saying that Uber has always been after a safe way to transport people via self-driving vehicles. “We knew we couldn’t do it alone, which is why we continue to partner with world-class vehicle manufacturers to make our vision a reality,” he wrote. “Our expanded partnership with Toyota signals our commitment to deploying self-driving technology at scale for our riders around the globe. We look forward to making progress in the years ahead with another strong partner by our side.”

Possible Repercussions of Self-driving Uber

Toyota investing in Uber isn’t the first disruption in the self-driving industry. In truth, the idea has been around since the 1920s. However, it’s true that ride-sharing is rapidly becoming the norm. What Uber and other rideshare companies are doing is becoming more and more interesting.

The reality of it is that fatal incidents involving self-driving cars aren’t all that alarming. To date, there have been four—that is, three involving Tesla autopilot, all leading to driver fatality, and the one previously mentioned Uber incident leading to a pedestrian fatality. However, one life is still a precious life. Moreover, it gets interesting what big names right and left are doing to prevent this.

Artificial intelligence (AI) entrepreneur Andrew Ng recently shared his analysis. He expressed that autonomous cars and vehicles are generally safe for riders and pedestrians, as long as everybody conforms to their limitations. He said, “What we tell people is, ‘Please be lawful and please be considerate.’”

Nevertheless, drivers need to be more lawful and considerate to pedestrians as well—safety is a mutual decision and awareness. With driverless vehicles intended to become fully automated, this shared liability is up in the air.

Investing in Uber is Toyota’s Move… So What Are the Others Doing?

It’s interesting to look at what everyone else has been doing amidst this bold autonomous vehicle trend. For instance, General Motors’ independent drive unit GM Cruise Holdings is planning to start a ride-hailing service of their own with their Chevrolet Bolt—their bold idea of cars without steering wheels or pedals—by 2019.

Boston Consulting Group’s U.S. automotive practice’s head, Brian Collie, declared Waymo is “ahead of the pack.” Still, he also mentioned that GM is not out of the picture. “You have to look at GM. In Europe,” he said. “Daimler is leading the pack.”

Another interesting observation is from Goldman Sachs, who predicted that “robo-taxis” will disrupt the ride-hailing and ride-sharing business, potentially growing the industry from today’s $5 billion to a ginormous $285 billion by 2030.

“There won’t be a ton of companies doing this,” Collie explained. “There will be a select few. Being there first establishes consumer trust. Brand value matters.”

The world can’t help but think: With so many players in the game, who is winning the self-driving car race?