It is easy to treat people well when things go well – but the true test of whether an organisation is to be trusted is ‘How do they treat people when things go badly?’
Last month Tesla described their contractors as ‘barnacles’ that needed to ‘scrubbed off’ and warned that there would be a lot of barnacle removal. Elon Musk then went on to say that any contractor who was not personally recommended by a Tesla employee would be denied access to their worldwide offices the following Monday. And this follows Tesla letting hundreds of staff go last October for ‘performance issues’ in a manner that had unions protesting.
It appears that Tesla seems to be gaining a reputation for shedding staff in bulk with little or no notice.
And what is wrong with that? Tesla has to survive as a business and if they are being decisive in taking action when they need to that is a good thing, right? Except as Uber’s new CEO, Dara Khosrowshahi, stated when he took over his post last year ‘There is a high cost of a bad reputation’. And it hits the bottom line. Last year 56% of people who left Uber cited the bad news stories of the sexism in the workplace and other scandals around the culture and style of the organisation as the reason why.
How depressing it is to think that Tesla could be going the same way. Tesla is doing so much right. It is bold, daring and capturing new markets from old suppliers. The car looks brilliant and friends tell me it drives pretty brilliant too. They sold 16,000 cars in Europe last year (excluding UK) only overtaken by two cheaper competitors. They are hip, aspirational and meeting a growing need to match our ecological concerns with our desire to drive fast, beautiful cars.
Yet, like Uber they do not appear to have given any thought to creating the people side of business to support such rapid and innovative growth. Indeed they seem to have adopted the very worst of the old, displaying a degree of arrogance and treating staff as a resource that can be picked up and discarded at will.
They are building a reputation that when finances get tight they fire staff in large numbers whilst at the same time blaming them for being incompetent. Conveniently disregarding that it was the Tesla culture that hired them in the first place and then allowed supposedly incompetent and expensive people to remain. During this same month Tesla needed to hire 400 people per week in Fremont. Given their reputation for shedding staff quickly I am left wondering just how successful this recruitment has been and what was the level of talent they attracted. Certainly when I have shared the story of Tesla’s past attitude and behaviour with friends and asked ‘If you were an individual of high talent and in high demand within the sector would you join the company?’ The answer, so far, has always been ‘No’. I wonder how long it will take Musk to begin complaining that there are no talented people who want to work for him without a hefty price tag.
Being an entrepreneur is all about being bold, decisive, taking action where others hesitate, not listening to doubters or naysayers, believing you are right and taking whatever steps are necessary to build, build, build. Both Uber and Tesler have displayed these attributes as they carved out a place in new markets. But apply this aggressive attitude to staff and the costs become high. You only build a successful business with people and need to treat them well, in fact better than well. Gary Vaynerchuk (who took his family wine business from $3m to $60m in five years and is now chair and CEO of Vaynerx Vaynermedia) states ‘If you want to build a business treat your staff better than your customers’.
Staff want to be part of something new, exciting and with energy. But above that they want to be treated with respect. And the test of just how respectful a company is how you deal with an individual, or a set of individuals, when things go wrong.
If you run a business and know you need to get this vital piece right give me a call. I can help you from 1-2-1 conversation with an individual staff member all way up to creating the right environment for your business where staff will love working for you whilst producing the ideas and sheer graft you need for success.