Tesla & Value Management: Part 3: Learning

• Part 1: How Tesla embody Value Management practices
• Part 2: How Tesla really are led by Value and have shown that it works
• Part 3: What the rest of us can learn from Tesla’s example

Last month, Chris wrote an article about a series of podcasts he’d come across about Tesla (covering everything from HR to product development, via finance, strategy and even catering).

Whilst billed as “Agile @ Tesla” – and “agile” is a recognised discipline in its own right – Chris felt from the podcast series that:

“Tesla absolutely embody and display everything we’re saying about being Complexity-Aware, People-Centred and Value-Led. In this way, they may well be the first organisation to achieve and be driven by simplicity the other side of Complexity.”

As that’s a bold claim, he then invited readers to:

“Read around some of the concepts in this article, listen to the podcasts and then judge for yourself: are Tesla the first company to fully embrace Value Management via the Things That Matter?”

Having taken up that invitation from Chris, I’m sharing my thoughts with you in this three-part series, concluding with what we can all learn from Tesla’s example.

What the Rest of Us Can Learn From Tesla’s Example

If you’ve read Part 1 and Part 2 of this series – and if you’ve listened to the podcasts themselves – there’s a good chance you’re at least intrigued, and maybe even inspired.

But there are also likely questions – most of all, perhaps: “we’re not Tesla: how is this relevant to us?” – and possibly even concerns.

Upfront it’s therefore worth saying that there are things about Tesla that aren’t in any way “required” by Value Management and that shouldn’t be taken as a blueprint for everyone.

Elon Musk Isn’t the Story

That begins with Elon Musk himself.

Whilst Musk is unarguably a highly successful visionary – and someone that seems excellent at knowing when to be involved vs when to hand over to a curated Complexity-aware context – he’s also a polarising figure when it comes to some of his views, his acquisition of and plans for Twitter, etc.

However, it’s certainly not a precondition of Value Management that you need to be like – or even for you to like – Elon Musk…!

The focus here is on the approach, and most pertinently – and what pervades the podcasts – is the way in which top-down leadership is dispensed with and autonomy handed-over: a major feature of Value Management and another reason why focusing on Elon Musk would be to miss the point.

Tesla’s Culture Is Its Own and Isn’t For Everyone

It’s also the case that the podcasts present aspects of working at Tesla that won’t appeal to everyone and that – again – are in no way entailed by Value Management:

• Episode 11 describes how Musk chooses to work 100 hour weeks and to live in a $60k house in the desert, with the accompanying sense at Tesla that it’d be really good if employees do that, too.
• Episode 9 talks about some employees even live in their cars, which follows Episode 2 describing how salary is basically minimum wage: whilst the generous provision of stock options offsets this in time, this self-described “experiment” in terms of transforming the nature of labour and remuneration really isn’t practical or even attractive for most.
• The podcasts talk enthusiastically about having space-age style uniforms, doing everything through your phone, sleeping on site, etc, but that again really isn’t for everyone.
• Perhaps most of all, the emphasis on AI and machine learning to monitor and automate so much will also not appeal to everyone, or be applicable in their context.

What Everyone Can Learn

However, the power of the Tesla example is twofold:

• It shows that Value Management absolutely can and does work.
• It shows how overarching Value Management principles and practices can be applied in very specific ways, meaning that they are relevant to everyone.

Value Management Works

On the first point, we already highlighted Tesla’s extraordinary performance at the end of Part 2, but also of note is how the podcasts highlight that Tesla still engages with the external world pragmatically and effectively; it doesn’t operate in a “bubble”:

• Episode 2 describes how “What still exists are certain legal requirements and norms… that are frankly just easier having something called a plant manager or a general manager or a safety officer.. so those roles are occupied with names by people who are skillfully trained in those roles… “
• Episodes 4 and 7 describe how Tesla recruit people via traditional job titles and “labels” – even if those people are then rapidly deployed in radical new ways – and also how experience at Tesla is related to traditional roles to enable people to move on seamlessly from the company if they choose to.
• Episode 9 describes wholly pragmatic and productive interactions with suppliers and government certifiers, both operationally and in terms of contracting practices.

Value Management therefore in no way detaches you from your context, and neither does it prevent you interacting effectively with it.

Value Management Applies in Specific Contexts

On the second point, Tesla is no way a universal model, and its application of Value Management principles and practices are shaped by:

• It manufacturing a physical product, within which a “closed system” can be largely created, where efficiency is a realistic goal, and which lends itself far more readily to tangibles, hard measures and machine-learning, etc.
• Focused primarily on a B2C model, which doesn’t have the additional complexities of B2B.
• Being in a relatively new industry (electric vehicles) where innovation is of virtually sole importance: in most contexts, the “mission” and priorities will be more nuanced and diverse.
• The association with the wider Musk ecosystem of companies and projects with their long-term vision and dramatic ambition (and Episode 9 talks about how Musk is trying to take over the labour market, reinvent currency, explore space and even reinvent consciousness itself).
• The lack of traditional constraints that come with a longer company history and an established way of doing things: for example, as Episode 11 flags, in many companies, existing executives will not want to get involved on the factory floor or wholly relinquish spend authority.

The key point to therefore take away here is that Value Management is bigger than Tesla – it’s not that Value Management is a version of what Tesla is doing; it’s that Tesla is a very context-specific application of Value Management.

What This All Means

Value Management is therefore the platform that enables all organisations – whether at a very specific cutting-edge like Tesla, or operating in a more “ordinary” context – to reap the benefits of pursuing the Things That Matter in their particular situations and circumstances:

• Rich and practical front-line feedback and early / weak market signals on the Things That Matter to the organisation are surfaced to be prioritised.
• These Things That Matter – particularly when expressed as Value Codes – are the bridge towards more empowerment, fluid teams, new concepts of leadership, etc.
• Through focusing on the Things That Matter and Value Codes in ARC Diagnostics, comments and any type of supplementary information, provides raw material for intelligent, informed understanding of the present and for speculation about the future
• Similarly, the metrics that are then generated on the Things That Matter provide feedback in ‘conventional’ reporting formats, so enabling ‘qualitative to quantitative’ near real-time sentiment / current status metrics to be incorporated into wider ‘balanced scorecard’ dashboards.

In this way, technology – including the support of AI – is more clearly positioned as the servant of humans than in the Tesla example (after all, humans are often dealing with even more complex problems than what makes for the best electric car!).

Regardless of where you are now, Value Management is therefore the way to move closer to where you want to be, and even if that might not be as ambitious or space age – literally – as Tesla, the benefits will still be transformational.