Logos Consulting Group president Helio Fred Garcia was interviewed on CNBC’s Power Lunch on Thursday, May 3, 2018, on the implications of Tesla CEO Elon Musk’s intemperate comments on an earnings call with investors the previous day.
In that call, among other things, Mr. Musk responded to an analyst’s question about future capital requirements with the comment,
“Excuse me. Next. Boring bonehead questions are not cool,”
“I’ve listened to a lot of earnings calls with automakers and more than my fair share of Tesla calls presided over by CEO Elon Musk with a mixture of cheerleading and contempt. On Wednesday night, after Tesla reported its first-quarter results, I was treated to easily the most bizarre Muskian performance yet.”
In the aftermath, CNBC Power Lunch invited Garcia to come on the air and offer an analysis of the leadership issues at play.
He was asked by co-anchor Tyler Mathison whether Mr. Musk should hire a top operational executive. Garcia replied,
“What we saw yesterday was a symptom of a bigger problem. And that is, a tendency of brilliant people to assume that brilliance is enough, where temperament is a necessary ingredient to being an effective leader.
We see that with many companies that are founded by brilliant people who have an inspiring vision and who create disruptive companies, But there comes a point in the life of the company where that isn’t enough. We are seeing that with Mr. Musk.”
Asked whether we’re at that point with Tesla, Garcia responded,
“We are certainly seeing repetitions of the same symptoms, And the symptoms suggest a temperament that doesn’t take seriously the burdens that a leader needs to undertake to run a complicated company after a certain point.
We saw that, for example, with Mr. Jobs in his first incarnation at Apple. We saw that just last month with Mark Zuckerberg when there was a need for leadership in the aftermath of the Cambridge Analytica scandal but we got a technocrat. We need a good combination of inspiration and temperament and what we’re seeing now is an over-weighting of the inspiration and brilliance and an under-weighting of the temperament.”
Co-anchor Sara Eisen noted that some investors love Tesla because of Mr. Musk and his vision, and others hate Tesla for lack of attention to important operational issues. She asked, which is more important. Garcia responded,
“It has to be a blend. We’re actually seeing the same phenomenon in the political environment as well. Not to talk about politics, but we see the same symptoms. Where we need the right blend of temperament and vision. And one of the challenges with some of the smartest people in the room is they tend to not respect the people whom they consider to less smart than they. As a result we get derisive language toward a stakeholder group that is critically important for the success of the company, be it investors, or employees, or regulators, or others.
And we saw a similar response to a question to the President last week, when he said ‘That’s a stupid question.’ The derision shown to people who have legitimate concerns is what’s going to lead to loss of trust
You can see the whole interview here:
In addition to his client work through Logos Consulting Group Garcia is an adjunct professor of management at NYU’s Stern School of Business Executive MBA program, where he teaches crisis management. He also teaches crisis communication in NYU’s School of Professional Studies MS in Public Relations and Corporate Communication. He is also an adjunct associate professor in Columbia University’s Fu Foundation School of Engineering, where he teaches crisis management, ethics, and leadership in the Professional Development and Leadership Program.
Garcia is the author most recently of The Agony of Decision: Mental Readiness and Leadership in a Crisis, available in both paperback and as an e-book from Kindle here.