“A case study of failed leadership.”

Elon Musk.

Elon Musk.Addresses Latif/Reuters

  • Elon Musk’s acquisition and management of Twitter is a business school case study for the ages.

  • Insider asked top business school professors for their thoughts on his first week.

  • One said he was a failed leader and should stick to innovation, another said Musk was right about emptying the house.

Elon Musk’s $44 billion deal to privatize Twitter was finalized on Oct. 27, and his first week in office was one of chaos.

One of his first steps: Firing four top Twitter executives, including ex-CEO Parag Agrawal and ex-CFO Ned Segal. A number of senior managers were also fired and lists were drawn up of who to keep based on performance reviews. Some employees began sleeping in the office to meet while their new boss set tight deadlines for shipping new products.

This week, Twitter employees received an email on Thursday confirming there would be layoffs the next day and adding that the offices would be temporarily closed. As reported by Insider’s Kali Hays, the layoffs actually began late Thursday, apparently earlier than expected.

Adding to the chaos are current and former Twitter employees using the service they helped build to post their layoffs, lawsuits and grievances.

Musk’s actions have drawn criticism, but “it’s not uncommon to take drastic action when a company isn’t realizing its potential,” said James Hayton, professor of innovation and entrepreneurship at Warwick Business School. Twitter is underperforming compared to larger competitors that have already frozen hiring or cut jobs — and it’s probably wise to cut numbers, he said.

“They would obviously fire the CEO in that scenario,” Hayton added. “You have to take power and take control of the organization, which is very difficult if you don’t fire those senior executives. Centralizing control is essential when you’re trying to bring about rapid and potentially unpopular change—things make sense, even if they’re not pleasant.”

He added: “It’s going to be a shock, but it’s better to peel the band-aid off quickly than let things fester.”

“Not right for leadership or management”

Musk’s approach to management is “a case study of failed leadership,” as William Klepper, a management professor who teaches an executive course at Columbia Business School, would define it.

He described Musk as a great “change agent” and a “genius” but “not cut out for leadership or management.”

He pointed to Musk’s tenuous relationship with Twitter’s now-fired executives since April, when the billionaire first agreed to buy the company for $44 billion, then withdrew his offer. His indecisiveness prompted Twitter to sue Musk, and he agreed to buy the company at the original price in October.

The six-month saga has shown that “his word is not his bond,” Klepper said, adding that Musk’s decisions are “just too unpredictable to weigh on.”

“His word is simply divesting his current thinking, so I don’t think what he’s saying is credible. I think that became clear as he navigated the relationship with Twitter,” he said.

For Klepper, Musk’s autocratic style leaves no room for constructive criticism.

“Now a lot of people admire that because it comes across as a strong command and control leader, and I can see that if the testosterone is flowing, it might be attractive to people,” he said. “But it hasn’t had what I would call strong health for an organization over time.”

Musk’s best job title? Chief Innovation Officer

Musk would do better as the “chief innovation officer” in his conglomerate of companies, including Twitter, according to Klepper. He should then hire people with strong leadership and management skills to fill the top positions.

Hayton, on the other hand, thinks it’s Musk can directly, indicating his ability to hire top tech talent to realize his big vision at his space company SpaceX, for example.

He added that it’s “unfair” to assume that Twitter will wither away when Musk has only been CEO for a week because “obviously things get turned on their head” in the beginning.

“If you look at his other companies, they have a clear course, a clear strategy, and they’ve been pretty successful,” he said. “I don’t think there’s any reason to believe that once they determine what the new Twitter looks like and how they’re going to run it, it’s going to be unstable.”

But ultimately, employees want stability as well as inspiration from their managers if they want to stay.

Klepper’s advice to Musk: “You shouldn’t be the CEO of your company. You should hire managers within the functional elements of that organization, but you could sit at the top of that conglomerate with a lot of people who know how your brain works, applying to each of those companies constructively as opposed to destructively.”

Read the original article on Business Insider


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