Musk is as erratic as he is brilliant, micromanaging decisions just as Welch once did and spreading himself thin by running five companies at once, which could lead to his star dimming over time just as Welch’s has. — Reuters
Elon Musk’s recent moves to put his stamp on Twitter Inc call to mind another cult figure of corporate America – Jack Welch.
Both men have achieved mythic status in capitalism, generating vast wealth and cultivating slavish devotion in the process. Welch, who helmed General Electric Co from 1981 to 2001, became famous for massive layoffs, championing shareholders over staffers and for financial engineering that ultimately led to catastrophe after he left. The style earned him the nickname “Neutron Jack”. Musk has a Steve Jobs-ian ability to know what customers want before they do, which has made him the world’s richest man and, now, the head of the world’s virtual town square.
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But Musk is as erratic as he is brilliant, micromanaging decisions just as Welch once did and spreading himself thin by running five companies at once, which could lead to his star dimming over time just as Welch’s has. Welch entitled his autobiography Jack: Straight From The Gut, but it’s Elon who’s shooting from the hip lately, whether it’s axing half of Twitter’s workforce along with its board, retweeting (then deleting) a conspiracy theory about Nancy Pelosi’s husband, or eliminating the company’s cherished remote-work policy.
“They’re both pretty ruthless in the sense that they’re not too worried about the effects on the broader community or on the employees,” said Peter Cappelli, director of the Center for Human Resources at the Wharton School of the University of Pennsylvania. “They’re thinking first that their job is to look after their money.”
Adds Kate Bezrukova, associate professor at the University of Buffalo’s School of Management: “It’s almost like a blast from the past.”
Twitter didn’t immediately respond to an email seeking comment.
Both are infamous micromanagers. Welch penned a 2016 LinkedIn post entitled “Why I Love Micromanaging and You Should Too”, where he counselled managers to butt in when they felt they had “unique expertise” or experience. “In such situations, you have to micromanage,” he said. “It’s your responsibility.” Musk, who in 2015 called himself a “nano-manager”, is known for ignoring the advice of experts and inserting himself into the tiniest operational and design details of his Tesla electric vehicles.
The two leaders have at times taken a less-than-rational approach to big mergers and acquisitions. Musk's attempt to back out of buying Twitter, and his off-the-cuff tweets along the way, are well-documented. Back in 2000, GE tried to buy Honeywell International Inc just to stymie an effort by rival United Technologies Corp. Welch even delayed his retirement by a year to see through the Honeywell deal, which fell apart when the European authorities blocked it, prompting a similar animosity toward regulators that Musk now harbours.
There are differences, of course. While Welch laid off thousands of workers, and let go many more through the company’s ruthless forced-rankings system, he knew what he wanted to achieve financially through the cuts, Cappelli said. Elon’s recent layoffs look haphazard by comparison, he said. And on Oct 30, Musk mockingly tweeted out a missive he received from Twitter telling him to complete the company’s mandatory management-training course. Welch, who valued management training and development and built GE’s Crotonville leadership academy into a model that other companies followed, would never have done that.
Both leaders, though, will keep the writers of business-school case studies employed for years.
“Elon has become, like Jack, a touchpoint for discussion,” said Michael Useem, faculty director of the Wharton Leadership Center. “People know so much about their style and what they’ve achieved. But they both have shortcomings. Behind Welch’s facade, back then we should have asked, ‘Is there a there there?’ The Twitter acquisition is also reminding us that we need to be cautious of admiring people like Musk.” – Bloomberg
