This Is What Elon Musk Does To Prevent Corporate Silos

Elon Musk hates corporate silos
Tesla CEO Elon Musk really hates corporate silos

In a verified publicly available email, Tesla CEO Elon Musk revealed his thoughts on corporate silos and hierarchical information flow. Here’s the email:

Subject: Communication Within Tesla

There are two schools of thought about how information should flow within companies. By far the most common way is chain of command, which means that you always flow communication through your manager. The problem with this approach is that, while it serves to enhance the power of the manager, it fails to serve the company.

Instead of a problem getting solved quickly, where a person in one dept talks to a person in another dept and makes the right thing happen, people are forced to talk to their manager who talks to their manager who talks to the manager in the other dept who talks to someone on his team. Then the info has to flow back the other way again. This is incredibly dumb. Any manager who allows this to happen, let alone encourages it, will soon find themselves working at another company. No kidding.

Anyone at Tesla can and should email/talk to anyone else according to what they think is the fastest way to solve a problem for the benefit of the whole company. You can talk to your manager’s manager without his permission, you can talk directly to a VP in another dept, you can talk to me, you can talk to anyone without anyone else’s permission. Moreover, you should consider yourself obligated to do so until the right thing happens. The point here is not random chitchat, but rather ensuring that we execute ultra-fast and well. We obviously cannot compete with the big car companies in size, so we must do so with intelligence and agility.

One final point is that managers should work hard to ensure that they are not creating silos within the company that create an us vs. them mentality or impede communication in any way. This is unfortunately a natural tendency and needs to be actively fought. How can it possibly help Tesla for depts to erect barriers between themselves or see their success as relative within the company instead of collective? We are all in the same boat. Always view yourself as working for the good of the company and never your dept.

Thanks,
Elon

There are sooo many great points in this email. Let’s break them down:

Chain of Command Information Flow Serves the Manager, Not the Company

When information within a company flows according to the hierarchy, the manager is turned into a hub. This can be fantastic for the manager. This person now has access to everything going on. The phrase knowledge is power holds especially true in highly political environments – which includes large companies. By becoming an information hub, the manager can more closely align with projects that seem to have more potential and can distance themselves from projects which seem to be struggling.

However, this hierarchical flow creates corporate silos, massive information bottlenecks, and dilutes key messages. Just consider the game of telephone for a moment. This is a simple childhood game where someone starts with a message and passes it to another person, who then passes it to the next person. Once the message has passed to everyone, the final message is compared to the original message. As anyone who has played this game can attest to, the final message is usually incredibly different from what the group started with. And strikingly, the more individuals in the chain, the more errors seem to compound.

This “telephone phenomenon” holds true in corporate environments as well. When information passes through several layers, the message becomes both diluted and warped to accommodate the needs of the individuals passing it. Large companies have this problem significantly more often than small companies, simply because of their scale.

In fact, one of the most crucial advantages small companies have over large companies is their ability to react quicker as a result of more direct information flow. When a company faces multiple large competitors (as Tesla does), its information flow advantage is of the utmost importance, and threatening that is a huuuuge problem. You can see how strongly Musk feels about this whole issue by saying that managers who engage in information bottlenecking will find themselves no longer working at Tesla. More CEOs need to take as strong of a stance against corporate silos as Musk does in this email.

Direct Communication is Required

As we all know, the fastest path between two points is a straight line. This holds just as true for information as it does for travel. Interestingly, Musk puts responsibility on both managers and junior employees for communicating information directly. This is spot on.

While there are many things managers can do to streamline and encourage direct information flow, junior employees are ultimately the ones responsible for their own communication. Musk makes this extremely clear by declaring that junior employees have an obligation to communicate until the right thing happens. It’s easy for an employee to feel an obligation when it comes to solving a technical problem but it takes a clear mandate like the one in this email to feel the same way about information flow.

I am also really impressed that Musk does not exclude himself from these requirements. Skin in the game.

Corporate Silos Occur Naturally

The final point in the email is a prescient one – namely, that corporate silos are a naturally occurring phenomenon in human organizations. Perhaps this phenomenon occurs because of humans’ tribal background or maybe there’s some social psychology reason. Regardless, preventing information silos requires all members of the group to actively fight this natural tendency. As Musk reminds his team, “we are all in the same boat.” This is true for every organization, large and small.

*****

Have you seen any of these problems in your own workplace? Have you developed interesting solutions to corporate silos? Let me know in the comments below, by email, or on Twitter!

Leave a Reply

Your email address will not be published. Required fields are marked *