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Elon Musk, Henry Ford and the Truth About How to Build a Sustainable Company Culture

The science is clear about what makes a company – and its leaders and employees – successful for the long term

Image credit: Getty Images

Among the many fascinating responses I got to my open letter to Elon Musk about his New York Times interview was an email from Jonathan Mildenhall (most recently CMO of AirBnB, and now about to launch 21st Century Brand) about Musk’s tweet holding Tesla up to the excellence of another vaunted automaker: Ford.

As Jonathan pointed out, there is a lot to be learned from the leadership style of Henry Ford. “Ford was able to build a sustainable culture and legendary productivity systems that went on to thrive long after his death,” wrote Jonathan. “Elon Musk’s leadership style is still very different from Henry Ford’s. He has the opportunity to create a truly iconic brand in Tesla, but must start to implement ways to scale his impact at the company when he’s not in the room. It’s a terrible burden for any leader to think that the business is dependent on their 24/7 presence and control.”

Jonathan’s email prompted me to look at Steven Watts’s biography of Ford. In The People’s Tycoon: Henry Ford and the American Century, Watts writes that the ability to delegate was vital to Ford’s success: Ford “always took the lead in devising projects, but then stepped aside as others implemented them.”

As Ford also knew, it’s impossible to effectively delegate (the way Musk, by the way, has done at SpaceX) when you’re running on empty. Ford’s farsighted ideas about productivity weren’t limited just to the machines on the assembly lines he pioneered. He was acutely aware of the connection between recharging and productivity, and made a clear distinction between man and machine, noting that while the latter can operate 24 hours a day, the former can’t. “Expensive tools cannot remain idle,” he told another of his biographers, Samuel Crowther. “They ought to work twenty-four hours a day, but here the human element comes in, for although many men like to work all night and have part of their day free, they do not work so well and hence it is not economical.”

It was in fact Henry Ford who helped create the idea of the eight-hour work day in 1914, reducing the shift of his workers from nine hours to eight, while also more than doubling their wage. The reason often cited for this was that it was about giving people, including his workers, the time and the means to buy his products. But that wasn’t the only reason, says Bob Kreipke, corporate historian for the Ford Motor Co. The real catalyst was burnout and high turnover on the assembly line. “It was mainly to stabilize the workforce. And it sure did,” Kreipke says. “And raised the bar all over the world.” Ford wasn’t defending the 40-hour workweek to be a nice guy or out of beneficence, but because he understood its value to the long-term bottom line.

In other words, it was about productivity and efficiency. Though many in the business world were shocked, and the move drew criticism, it also worked. Turnover went from over 300 percent to just 16 percent by 1915. Productivity increased, and so did profits – doubling from $30 million in 1914 to $60 million in 1916.

As Musk notes, Ford didn’t go – and still hasn’t gone – bankrupt. Henry Ford understood how recharging helps us perform at our best. “Men come back after a two-day holiday so fresh and keen that they are able to put their minds as well as their hands to work,” he said. And the science since then has clearly and unambiguously confirmed this.

And the science applies just as much to all of us as it does to Musk, who was simply voicing the deeply entrenched delusion that burning ourselves out is the price we have to pay for success. His Twitter argument that making time to recharge isn’t an option is similarly widely shared – and just as misguided. It’s premised on the myth that we have to choose between ourselves and our ambitions and goals. In my letter, I wasn’t asking him to choose between taking care of himself and taking care of Tesla. I was reminding him that taking care of himself is taking care of Tesla.

This isn’t about sleep, or about slowing down, or not working hard, or about asking Musk, or anyone else, to go chill out under a mango tree. It’s about how we can unlock and sustain our peak performance, and see solutions and opportunities where others can’t. It’s about effective leadership and sustained productivity at every level.

This isn’t some special set of guidelines for the world’s most prominent business leaders. It’s true for all of us. When we’re burnt out and running on empty, we’re more likely to lash out, react emotionally, make rash or reckless decisions. And that can have material consequences in our daily lives, both at home and at work. What’s different for Musk is that those consequences are broadcast to the world, impacting the very thing he thinks he’s sacrificing himself for: Tesla, its brand, its stock, its employees, its ability to raise the financing to private – in other words, its very future.

Indeed, for all his vision and brilliance, it’s these misfires that have accounted for most of Musks’s headlines lately: in May, he “lashed out” at analysts on an earnings call, calling their questions “boneheaded” and “boring.” And on the following earnings call in August, he apologized and provided as an explanation for his behavior the very things that he claims are necessary for the company to thrive: his exhaustion and sleep-deprivation, explaining that he was worn out from working “110, 120 hour weeks.” And then there was the tweet he sent out about having enough funding to take Tesla private, which quickly spawned an S.E.C. investigation when it turned out that the funding hadn’t been secured yet — yet another distraction for an already beleaguered company. We don’t know what Musk’s state of mind was when he sent it out, but, according to the Times, “no one had seen or reviewed it before he posted it,” and, after the ensuing uproar, he “agreed not to tweet again about the possible privatization deal unless he had discussed it with the board.” And in fact, Tesla shares dropped nearly 9 percent the day after the Times piece ran.

But as we’re seeing being played out right now across the globe, putting that science into practice, and transforming deeply-rooted habits and established ways of working, takes time. That’s the core mission and purpose of Thrive Global. When we show the leaders and companies we work with the science behind how they can perform better and more efficiently, there’s often an initial resistance. But the results, as with Ford’s far-sighted changes, are always beyond dispute.

And yet so many in our culture – who otherwise pride themselves on being data-driven – still cling to the disproven notion that making time to recharge and refuel isn’t an option because their work would somehow suffer. But if you want to succeed in the long term, there is no other option. And if you truly want to shape the future, you can start by abandoning outdated work habits from the past.

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