Elon Musk’s Lessons From Hell: Five Commandments for Business
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Elon Musk’s Lessons From Hell: Five Commandments for Business

New book by biographer Walter Isaacson explores the billionaire’s leadership style and ‘demon mode’

By TIM HIGGINS
Wed, Sep 13, 2023 8:32amGrey Clock 4 min

Simply put: Elon Musk can be a real jerk.

And that has probably helped and hurt him in business, according to a new biography by Walter Isaacson.

In “Elon Musk,” out Tuesday, Isaacson puts forth the idea of “demon mode” to explain the temperamental impulses behind some of the tycoon’s successes—and setbacks. But it isn’t just demon mode that has fuelled his rise. Isaacson details other teachable ways the billionaire’s methods have helped make him the world’s richest man.

Both sides of Musk are sure to become part of B-school lore for a new generation of would-be entrepreneurs and business managers picking and choosing which traits and tactics to emulate.

Isaacson had previously made the concept of the “reality distortion field” popular with his bestselling 2011 book about Apple co-founder Steve Jobs and his ability to bend perception to motivate others.

Demon mode was on display in 2018 as Musk struggled to ramp up production of Tesla’s Model 3 sedan, which nearly destroyed the electric-car company and which the CEO dubbed production hell.

That experience through hell, the book says, also helped Musk shape five commandments for how he wants problems solved by his workers across his companies, from rocket maker SpaceX to social-media platform X, formerly Twitter.

Musk, in the book, calls the framework for problem solving “the algorithm.” In short, Musk urges his employees to:

  • Question every requirement
  • Delete any part or process you can
  • Simplify and optimise
  • Accelerate cycle time
  • Automate

“His executives sometimes move their lips and mouth the words, like they would chant the liturgy along with their priest,” Isaacson wrote of Musk’s mantra.

In the book, Musk acknowledges he talks about the approach often. “I became a broken record on the algorithm,” Musk is quoted as saying. “But I think it’s helpful to say it to an annoying degree.”

The approach builds off a long-held method for problem solving touted by Musk called first principles, a reasoning that breaks tasks into their very basics without simply reverting to what has been done before.

“The algorithm is a five-step process for not only making good products and designing good products, but manufacturing them,” Isaacson said in an interview Monday.

Throughout his book, Walter Isaacson chases the question of whether Elon Musk could be successful any other way. PHOTO: ARIEL ZAMBELICH/THE WALL STREET JOURNAL

“It begins with first principles. He says, question every requirement, and, by first principles he means, look down at the physics. If somebody says, no, we can’t build it at this price, he says, tell me how much the materials cost. Tell me exactly what’s involved here and then tell me you can or can’t do it.”

There are other lessons in the book that Musk has long practiced, such as never asking an employee to do something you aren’t willing to do (hence his sleeping on factory floors), hiring employees based on their attitude, and saying “it’s OK to be wrong. Just don’t be confident and wrong.”

Telling Musk bad news, however, has been seen by some employees as dangerous to one’s career.

“One of his problems is people sometimes are afraid to tell him the bad news,” Isaacson said. “Those who succeed around Musk are those who figure out you got to give him the bad news even if it’s going to result in some unpleasant scenes.”

Their fear is often rooted in demon mode.

Claire Boucher, known as the musician Grimes and the mother of three of Musk’s children, coined the term in an interview with Isaacson.

“Demon mode is when he goes dark and retreats inside the storm in his brain,” Boucher said in the book. “Demon mode,” she added, “causes a lot of chaos but it also gets s— done.”

And Musk has gotten a lot done, helping usher in the electric-car era as Tesla chief executive and igniting the commercial space race with SpaceX, which he founded. His messy stewardship of X, however, is testing public perception of his business genius.

Isaacson, who shadowed Musk for two years in reporting the book, saw demon mode in person several times along with other personalities that he described as ranging from silly to charming. He suggests the roots of the dark clouds come from the 52-year-old’s childhood in South Africa.

“It’s almost like Dr. Jekyll and Mr. Hyde where a cloud comes over and he gets into a trance and he can just be tough in a cold way,” Isaacson said. “He never gets really angry, never gets that physical, but coldly brutal to people and he almost doesn’t remember afterwards what he’s done. Sometimes I’ll say, why did you say that to that person? And he’ll look at me blankly as if he didn’t quite remember what happened while he was in demon mode.”

In one instance, Isaacson described seeing demon mode emerge when Musk saw SpaceX’s launchpad in South Texas empty late one evening.

“He orders a hundred people to come in from different parts of SpaceX from Florida, California so they can all work for 24 hours a day getting this thing done even though there was no need to,” Isaacson said.

Such surges seem to play in tandem to Musk’s need for drama.

“He is a drama magnet,” Musk’s younger brother, Kimbal, said in the book. “That’s his compulsion, the theme of his life.”

Isaacson cautions that readers shouldn’t come away thinking they can be just like Musk and automatically succeed. Rather, he said, readers should see both how leaders such as Musk and the late Jobs were effective and also take away cautionary tales.

“You don’t have to be this mean,” he said.

Still, throughout his book, Isaacson chases the question of whether Musk could be successful any other way.

“I try to show how that’s one of the strands in a fabric and as Shakespeare said, we’re moulded out of our faults,” Isaacson said. “If we pull that strand out, you might not get the whole cloth of Elon Musk.”



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The Great Wealth Transfer: How rich millennials will invest the billions coming their way

The younger generation will bring a different mindset to how and where their newfound wealth is invested

By Bronwyn Allen
Fri, Mar 1, 2024 2 min

There is an enormous global wealth transfer in its beginning stages, whereby one of the largest generations in history – the baby boomers – will pass on their wealth to their millennial children. Knight Frank’s global research report, The Wealth Report 2024, estimates the wealth transfer set to take place over the next two decades in the United States alone will amount to US$90 trillion.

But it’s not just the size of the wealth transfer that is significant. It will also deliver billions of dollars in private capital into the hands of investors with a very different mindset.

Seismic change

Wealth managers say the young and rich have a higher social and environmental consciousness than older generations. After growing up in a world where economic inequality is rife and climate change has caused massive environmental damage, they are seeing their inherited wealth as a means of doing good.

Ben Whattam, co-founder of the Modern Affluence Exchange, describes it as a “seismic change”.

“Since World War II, Western economies have been driven by an overt focus on economic prosperity,” he says. “This has come at the expense of environmental prosperity and has arguably imposed social costs. The next generation is poised to inherit huge sums, and all the research we have commissioned confirms that they value societal and environmental wellbeing alongside economic gain and are unlikely to continue the relentless pursuit of growth at all costs.”

Investing with purpose

Mr Whattam said 66% of millennials wanted to invest with a purpose compared to 49% of Gen Xers. “Climate change is the number one concern for Gen Z and whether they’re rich or just affluent, they see it as their generational responsibility to fix what has been broken by their elders.”

Mike Pickett, director of Cazenove Capital, said millennial investors were less inclined to let a wealth manager make all the decisions.

“Overall, … there is a sense of the next generation wanting to be involved and engaged in the process of how their wealth is managed – for a firm to invest their money with them instead of for them,” he said.

Mr Pickett said another significant difference between millennials and older clients was their view on residential property investment. While property has generated immense wealth for baby boomers, particularly in Australia, younger investors did not necessarily see it as the best path.

“In particular, the low interest rate environment and impressive growth in house prices of the past 15 years is unlikely to be repeated in the next 15,” he said. “I also think there is some evidence that Gen Z may be happier to rent property or lease assets such as cars, and to adopt subscription-led lifestyles.”

Impact investing is a rising trend around the world, with more young entrepreneurs and activist investors proactively campaigning for change in the older companies they are invested in. Millennials are taking note of Gen X examples of entrepreneurs trying to force change. In 2022,  Australian billionaire tech mogul and major AGL shareholder, Mike Cannon-Brookes tried to buy the company so he could shut down its coal operations and turn it into a renewable energy giant. He described his takeover bid as “the world’s biggest decarbonisation project”.

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