‘Au­then­tic hero’ sees off chal­lenge

Sunday Star-Times - - BUSINESS | NEWS -

Tesla share­hold­ers have voted to main­tain Elon Musk’s role as chair­man of Tesla’s board dur­ing the com­pany’s an­nual share­holder meet­ing in Moun­tain View, Cal­i­for­nia, de­spite a con­tro­ver­sial pro­posal to strip him of that po­si­tion.

The vote of con­fi­dence is a ma­jor boon for Tesla’s em­bat­tled chief ex­ec­u­tive and founder, but ar­rives six months into what is ar­guably his com­pany’s tough­est year to date.

Mo­ments af­ter the vote, Musk – who ap­peared emo­tional – said that the com­pany has ex­pe­ri­enced ‘‘the most ex­cru­ci­at­ing hellish sev­eral months that we’ve ever had’’.

‘‘But I think we’re get­ting there,’’ he added.

In re­cent months, Tesla has been be­set by crit­i­cal pro­duc­tion chal­lenges in­volv­ing its ea­gerly awaited Model 3 sedan, ac­cu­sa­tions of poor worker safety, and a se­ries of head­line-grab­bing wrecks that have raised ques­tions about the com­pany’s semi-au­ton­o­mous tech­nol­ogy.

Tesla’s stock is down more than 7 per cent year to date.

The vote also de­ter­mined the fate of three mem­bers of Tesla’s board of di­rec­tors: An­to­nio Gra­cias, a pri­vate eq­uity in­vestor; Kim­bal Musk, Elon Musk’s brother; and James Mur­doch, the chief ex­ec­u­tive of Twenty-First Cen­tury Fox.

De­spite con­cerns that each mem­ber would be un­able to help Musk fo­cus on the many chal­lenges Tesla faces, stock­hold­ers voted to main­tain their po­si­tions on the board.

The pro­posal to re­move Musk from his role as chair­man of Tesla’s board was in­tro­duced by Jing Zhao, a share­holder who has ques­tioned whether Musk, who leads sev­eral other com­pa­nies in ad­di­tion to Tesla, is spread too thin.

‘‘Al­though the cur­rent lead­er­ship struc­ture, in which the po­si­tions of chair­man and chief ex­ec­u­tive are held by one per­son, could pro­vide an ef­fec­tive lead­er­ship for Tesla at the early stage, now in this much more highly com­pet­i­tive and rapidly chang­ing tech­nol­ogy in­dus­try, it is more and more dif­fi­cult to over­see Tesla’s busi­ness and se­nior man­age­ment,’’ Zhao wrote in his pro­posal.

Musk’s ex­cep­tional abil­ity to raise cap­i­tal and con­vince in­vestors to buy into his long-term vi­sion is why Steve Blank – a retired Sil­i­con Val­ley en­tre­pre­neur who teaches busi­ness stu­dents at Stan­ford – thought it was un­likely Musk would be re­moved.

Like Steve Jobs be­fore him, Blank said, Musk ex­cels as a vi­sion­ary and in­no­va­tor, but strug­gles to im­ple­ment that vi­sion.

Jobs even­tu­ally mas­tered both in­no­va­tion and ex­e­cu­tion and Blank thinks Musk will, too, so long as he con­tin­ues to move past the cre­ative phase of his ca­reer.

‘‘This is no longer an in­no­va­tion prob­lem, this is an ex­e­cu­tion at scale prob­lem – un­less Tesla wants to be a niche in­no­va­tor chas­ing prof­itabil­ity and suck­ing up cash,’’ Blank said.

‘‘They need to be­come ex­perts at ex­e­cu­tion at scale, but that’s hard for peo­ple who in their DNA want to con­tin­u­ally in­no­vate.

‘‘It gets bor­ing to ex­e­cute.’’ Blank de­scribed him­self as ‘‘a huge Elon fan’’.

‘‘What peo­ple miss is that this is an au­then­tic Amer­i­can hero and most of these he­roes have in them the seeds of their own de­struc­tion.’’

Elon Musk with Cana­dian mu­si­cian Grimes at the Metropoli­tan Mu­seum of Art’s Cos­tume In­sti­tute ben­e­fit gala in New York last month.

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