Strategic planning is more than setting goals to achieve an objective. The strategy behind the planning can be both short term and long term and encompass different areas of management throughout a company. Elon Musk, CEO of Tesla, utilizes strategic planning as a means of cutting down on expenditures. Clifford & Mejia write, “Going forward, we will be far more rigorous about expenditures. I have asked the Tesla finance team to comb through every expense worldwide, no matter how small, and cut everything that doesn’t have a strong value justification” (2018). The strategic plan for Tesla was to cut down on long-term waste.To implement his plan successfully, Elon Musk required each of his managers with short-term and long-term expenses of $1 million and above to meet with him to go over those expenses. Elon’s innovative strategy was to implement Aristotelian philosophy of “Principles First.” This philosophy relates to understanding the fundamental principles of how things work. Elon and the Principles First method encourages his leaders to understand how things work so that they can fully understand how every piece of their department affects another. By following this philosophy, Elon and Tesla are able to cut out middle men in the process. Elon was able to close gaps in his organizational structure by getting rid of anyone that did not provide value, which ended up being mostly contractors and staff not associated with value.
This philosophy is also beneficial for their Forward Integration strategy, to gain ownership or increased control over distributors or retailers (David & David, p. 134, 2017). With Tesla’s ongoing structure to provide direct to consumer car sales, Elon’s leads the company with his innovative approach that has allowed savings by cutting out additional unnecessary costs. There is a lot to be learned from Elon Musk. Most importantly, I find that his approach to personally go over reports sets a good example of how a CEO should care about his company without micro-managing. Mr. Musk’s ability to be an innovative leader by using ancient Greek philosophy also shows that we can still learn from our past. Moving forward, leaders should be more innovative and open to ideas that can provide them with, not only a competitive advantage, but a leadership advantage as well.
Clifford, K., & Mejia, Z., (2018) Why Elon Musk wants his employees to use an ancient mental strategy called ‘first principles’ Retrieved from https://www.cnbc.com/2018/04/18/why-elon-musk-wants-his-employees-to-use-a-strategy-called-first-principles.html
David, F. R. & David, F. R. (2017). Strategic Management: A Competitive Advantage Approach, Concepts and Cases, 16th edition. Prentice Hall
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