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Elon Musk, CEO and product architect of Tesla Motors, Inc. is a renowned disruptive innovator. Musk pioneers new frontiers in high-risk, high-barrier-to-entry business ventures. An engineer, Musk initiated SpaceX, SolarCity and the Hyperloop. With a net worth of $302.1 billion In October 2021, he surpassed Jeff Bezos as the richest person in the world.
Musk’s unpredictable behavior dismays and charms shareholders and onlookers. Advocating free speech, Musk offered to buy Twitter after rejecting a board seat he had accepted. Twitter then accepted his bid. Musk has now put the acquisition on hold.
Musk defied a local health order that banned the manufacture and assembly of non-essential goods during the pandemic. In a Tesla earnings call, he labeled the California shelter-in-place orders as “fascist”. Musk tweeted that Tesla’s stock price was too high, prompting an immediate price drop. The statement disregarded his agreement with the SEC to stop tweeting about his businesses. He also tweeted “FREE AMERICA NOW” about closing businesses during the pandemic.
Previously, Musk accused a cave rescuer of moving to Thailand to marry a child and being a “child rapist”. He drank whisky and smoked a marijuana joint during a podcast interview. He announced that he had secured funding for a go-private takeover of his company. 17 days later, he retracted the statement.
So how does Musk think when faced with probing investment analysts during earnings conference calls? I analyzed the thinking he displayed during Tesla’s 2013, 2014, and 2015 first quarter conference calls.
While combing through the text, I was surprised by his lack of coherence. I wondered about his stress level. Many of his statements were disjointed and incomprehensible. Regardless, I did my best to rate the content based on my Hierarchy of Thinking Styles model.
Having interpreted thousands of Optimal Thinking 360 Assessment reports, I expected Musk’s thinking profile to emphasize Optimal Thinking and extraordinary positive thinking. I anticipated a small amount of the other thinking styles. I also expected Musk to articulate actual results compared to desired results. But, I was wrong.
The assessment describes how Elon Musk thinks in this specific situation. Musk presents himself as a moderate thinker—more positive than negative—when he discusses Tesla’s performance and expectations during these calls. He often uses words like “good”, “positive”, “hedging”, and “okay”. He also uses phrases like “cautiously optimistic”, “good idea”, “quite significant”, “fairly small”, “not so much”, and “moderate effect”.
Musk deploys moderate positive thinking to display reasonable confidence when discussing market realities. This is particularly evident during the 2013 and 2015 calls. He focuses on how things can be done and how to make them happen. In 2014, the combination of extraordinary thinking and Optimal Thinking starts to eclipse his moderate approach. This is in keeping with his persona as an extraordinary innovative engineer.
As a rule, moderate thinkers are motivated by acceptance from others. In these challenging situations, it appears that Musk chooses to fit in. While his vision is extraordinary and optimistic, he is conservative about delivery, and avoids going out on a limb. Musk often seeks approval from Tesla shareholders before selling his shares.
When the cost is high, optimism is the wrong strategy. Optimal Thinkers face brutal facts. In high risk situations, we protect the downside with contingency plans. Optimal thinkers cut the “should haves” from processes and outcomes. We take the best actions to achieve the best solutions. By choosing the best option in any situation,
Musk uses Optimal Thinking to articulate his commitment to optimization.
we should just try to produce cars in the right way for the various markets.
He deploys Optimal Thinking when discussing the seats in the Model X.
They are the nicest second row seats you’ve ever seen in any car ever.
He also uses Optimal Thinking to pursue his vision while embracing negativity.
We’re slowing down U.S. deliveries and trying to make people as happy as possible, given the production constraints.
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The transcripts used in this article are © SeekingAlpha.com. 2013, 2014, 2015.
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