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What does Elon Musk have that we don't?
113 Plays1 year ago
Ashley Harris is an experienced Operations Leader used to working in fast-growing and high-pressure companies. He spent 5 years working at Tesla, where he rose to a management role for European Operations and Logistics. He's currently Director of Operations for Clearview, a pioneering company in the Machine Vision space, where he works with the Managing Director and Senior Leadership Team to help deliver strategic goals (serving as "Integrator", using the Entrepreneurial Operating System (EOS)).
In this episode of the First-time Founders Podcast, Ash compares and contrasts the style of Elon Musk, one of the greatest entrepreneurial Visionaries of our time, with a good small business leader, running on EOS. We talk about aligning teams around a Vision; recruiting and managing People; use of Data; understanding Issues at their root; if, when and where Processes are necessary; and quarterly operating rhythms. We explore what it takes as an entrepreneurial leader to really 'put a dent in the universe'!
Interested viewers can reach Ash via LinkedIn - https://www.linkedin.com/in/ashley-w-harris/ - and Rob (https://www.linkedin.com/in/robertliddiard/) at Rob@mission-group.co.uk (or to book some free time with Rob, visit https://www.eosworldwide.com/rob-liddiard).
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Transcript
Introduction to First Time Founders Podcast
00:00:00
Speaker
Hello and welcome to another episode of the First Time Founders podcast, the show where we talk about how to start a business from nothing and grow it into something meaningful. I'm Rob Lydiard. I was the co-founding CEO of a software company called Yapster that was acquired in 2022. I'm now a professional implementer of the entrepreneurial operating system, or EOS, which means I work with entrepreneurs and entrepreneurial leadership teams to help them get more of what they want from their businesses. Typically, that means hitting targets and setting them with more accuracy
00:00:29
Speaker
executing with more discipline and accountability and performing more functionally and healthily as a team, because we can be a bit chaotic in startup land. That's my day job, but in my spare time, I love talking to entrepreneurs and entrepreneurial people about the first time founder journey and generally life as an entrepreneur and what we can learn along the way from one another. I also just love talking to people that are interested in the startup game. So if you fit into any of those categories,
00:00:56
Speaker
Please do reach out using the links in the notes and just say hi. I love hearing what you think of the show, what you'd like us to do in terms of future content, issues that you'd like us to tackle. Corrective feedback is also good by me too. If there's anything I'm doing that's annoying, reach out, tell me. Good, bad or ugly, I'd love to hear from you.
Guest Introduction: Ash Harris
00:01:12
Speaker
Today we're speaking to Ash Harris. Ash is an integrator, a really exciting small business, growing business called Clearview, but he's on the show today because he spent five years in various operationals and customer roles at Tesla.
00:01:26
Speaker
And I'm dying to title an episode, what does Elon Musk have that I don't? Brackets other than a few tens of billions of dollars. Ash is a brilliant guest for this topic because not only does he really understand what it felt like to be a member of the Tesla employee population and management population in the UK while that business was growing, but also because he's implemented EOS in his current business where he's also been for four years. So he's got this really interesting reference point where we understand
00:02:07
Speaker
The joy that that car has brought to so many Tesla owners.
Insights from Tesla Experience
00:02:10
Speaker
And of course, not without the famous well-publicized production challenges, shipping volume forecasts, slips. Elon Musk, of course, has had various HR-related emails leaked over time. So it's a business that hasn't been without controversy. And following Walter Isaacson's recent book on Musk,
00:02:19
Speaker
operational excellence from a small business perspective
00:02:33
Speaker
There's even more interest in the man and the manager and the leader that is Elon Musk. So Ash very kindly agreed to come on and help us humble small business leaders, owners, and founders get a little peer into what it might be like to build a company like Tesla or maybe a company that's nothing like Tesla, but just hopes to achieve some of the magical outcomes that Elon was able to achieve within that business.
00:02:57
Speaker
So I think it's a really exciting episode and by the end of it, you should know what does Elon Musk have that I don't. So without further ado, I give you Ash Harris. Ash, welcome to the First Time Founders Podcast. Thank you for doing this, mate. Hey, Rob. Yeah, no worries. Looking forward to it. So usually I come up with a title for these podcasts after we've had the conversation, but today's a little bit different because I'm determined that we title this podcast episode
00:03:26
Speaker
What does Elon Musk have that I don't? Yeah, a bit of a different title, I guess, right? Yeah. And so for those that are wondering, Ash worked for five years at Tesla and a range of roles with different levels of exposure to Elon Musk. So he's seen up really close what one of the great entrepreneurs of our time operating at an incredible scale.
00:03:49
Speaker
behaves like and infused his business with. And then also, Ash leads a current business from an operations integrated perspective on EOS, more like still a decent business, but slightly smaller than Tesla. So Ash, you've got this great view of someone really putting a dent in the universe and what a good ordinary aspirational sort of small growth business looks like. And I thought just for this episode, we just have some fun dancing between the two, right? The average founder, a la me,
00:04:18
Speaker
Elon Musk who we all have to read about in the books. Would you mind for folks then giving people a little bit of a sense of what it is you did at Tesla and there may be a hint of what you do now? Yeah, absolutely. And so, yeah, I think you've summarised it really well, but I joined Tesla originally just as a, well, I got the role wrong. I thought it was logistics. It turns out it was customer service, but I thought I'll stick at it and this company is going to go somewhere.
00:04:41
Speaker
and so i started just as a customer service representative helping customers take delivery of their car so there's a long lead time in that time so i was one of the first employees in the uk and some customers had waited three years for this car so i helped them to do their charging their registration their finance
00:05:00
Speaker
And then over those five years kind of moved into different roles of managing that team at different levels. So I went from that role to managing the UK team and helping that operational sort of network expand directly within the UK market.
00:05:13
Speaker
and was fortunate enough to be offered the position to do that for Western Europe, so covering Netherlands, Benelux region on top of the UK. And then sort of my final year and a half to two years was then focused on a more European role. And so originally it was to help the sales leadership scale the operational network of delivering the vehicles and bringing those to market for customers.
00:05:37
Speaker
And then ultimately was head of European delivery operations and logistics. And so that was just before model three was released. And so
00:05:47
Speaker
People that have seen in the news, you know, Tessa did very small delivery volumes with Model S and X. And then as Model 3 came, because the price point dropped, we went sort of five times the scale. And so my job was clearly defined. It wasn't there was no black and white. It was you need to deliver five times the volume, but with less people. And so that was the mandate. That was the clear thing that I had to do. And so the journey kind of kicked from there.
Operational Excellence at Clearview
00:06:09
Speaker
And so I didn't directly sort of officially report to Elon, but had sort of daily communication with him, met with him on several occasions in different meetings and got a real sort of insight into the way he worked and the way he approaches problems, I guess, is the insights. I learned a lot of what to do, what not to do, and probably the combination of both now helps me at Clearview.
00:06:30
Speaker
And so Clearview is a machine vision distributor. So we primarily focus on anything that can automate process. We sell industrial machine vision cameras to help automate processes in companies, anywhere from goal line technology through to cancer research, through to factory automations. We have a unique engineering team that can customize systems for customers.
00:06:53
Speaker
and some of the operations director there and join to help a small business kind of get to a similar sort of growth percentage perhaps, different levels of revenue and profits for sure, but a similar sort of growth percentage to help grow that business in different countries and achieve goals as we go through in the next three, five years in the business. And both deep tech companies, you did five years at Tesla, four years into Clearview, right? So like decent 10 years to have seen those businesses.
00:07:23
Speaker
Yeah, and so it's, for me, the kind of real, I guess the real driver is to add value into, I really take joy weirdly in solving all of the
00:07:34
Speaker
stuff in the background and helping a company fix all that stuff so that sales can focus on what they need to do, any other sort of supporting teams, engineering or whoever, and it can do their part. And then it all pulls together in one piece. And so at Tesla, you know, I started there, there was probably 20 people in the UK. When I left, it was probably closer to 400. Europe, I can't remember the numbers, but
00:07:56
Speaker
thousands of people by the time I left and the growth was huge and it clearly is sort of very similar things in terms of same growth challenges but just on a different scale for sure and getting more stuck into the nitty gritty to understand how things work.
00:08:09
Speaker
Amazing.
Tesla's Mission and Culture
00:08:11
Speaker
So folks that listen to this podcast often will hear me often allude to the entrepreneurial operating system. It's obviously a great passion of mine from my prior entrepreneurial ride at Yapster. I now teach it clearly and help other entrepreneurial companies implement. And you yourself have done a few years as an integrator, the kind of that COO position right in EOS parlance. I think rather than us boring on too much about orthodox EOS implementations, which I know you've got a ton of wisdom that people could benefit from,
00:08:39
Speaker
I think that we should focus on like the anti EOS. I think it would be really interesting to, so we're not, you know, talking up our own book, be really interesting to talk about Tesla's greatest departures from some of the principles of EOS. Just so we can contrast, like why the average entrepreneur should you typically use something like EOS or another operating system? And why for the outlier, like one in a thousand, one in a million,
00:09:03
Speaker
just ripping up all the rubric tends to work. So you're happy if we kind of, we don't have to do it all the way around the six components, but it would just be fun, right? So, and of course, by the way, disclaimer folks, EOS doesn't hold itself out as an operating system that's designed for companies above 250 employees. So it was never designed for a business like Tesla anyway, but I still think it's a useful thought exercise. So Ash,
00:09:25
Speaker
Elon Musk is described as one of the great visionaries of our time. In EOS terminology, the first key component is vision, of course, which is typically articulated in the Vision Traction Organiser, the two-page business plan that links vision to traction.
00:09:40
Speaker
Did Tesla have anything like a written vision, document that you kind of all marched to? Or like, how did the greatest visionary of our generation from an entrepreneurial perspective imbue that organization while you were there with that understanding of the vision and your role within it?
00:09:56
Speaker
Yeah, it's really interesting. So as I was preparing to join you on this, I kind of thought it through. And my first initial thought was there's no way Tesla or Elon would have had an EOS thing. But actually, the components of what Elon and Tesla did kind of did fall into an EOS structure, but just in very different ways and in
00:10:16
Speaker
probably different scales and so there was never a I guess an initial business plan you know like you get with the EOS VTO not something that was shared with all employees directly that kind of came a little bit later on in Elon's sort of strategic plan and his kind of vision but the interesting part for Tesla is that
00:10:39
Speaker
Elon's, I guess, philosophy in life was to solve the biggest problems that nobody sort of had the balls to take on, I guess. And every single employee's single motivation was on one thing, and that was to transition the world to sustainable energy.
00:10:56
Speaker
And it was like this North Star that guided everything. And whether you were interested in that because you cared about the environment or because you cared about the technology or because you just liked Elon, right? And the hype of that.
00:11:12
Speaker
That was the vision it's like we are all here to play a bigger part it wasn't about a job getting paid and just doing the nine to five it was how can we all collectively help the business to achieve this goal and that goal isn't really a business goal right it's how do we transition the world to sustainable energy it's.
00:11:30
Speaker
it kind of opens up how Elon thinks. It's like he could have said, I want to be the number one electric car manufacturer in the world with the most profit, et cetera, et cetera. But it was more than that. It's how do we help the world transition to that sustainable state? And so that comes with later products that all integrate into this kind of sustainable place. And it's incredible to think about it now that every single employee
00:11:58
Speaker
was fixated on that one mission, no matter what their job in the company was. Really? And yeah, and it's almost I do believe you because I know you like you and trust you, but it's almost hard to believe, right?
00:12:11
Speaker
Yeah, and I tried thinking back, did someone sort of sit me down for my first week and constantly keep pushing this thing of sustainable energy? And that was like the thing. And no, that didn't
Challenges and Strategies at Tesla
00:12:20
Speaker
happen. But it was just a consistent message. So every all-hands call we'd have, that would be the holding message. On all of their websites, that's the message. And it was just this dedication and the recruitment process. All the way through, it was how do we transition the world to sustainable energy? And I think the one thing that kind of
00:12:40
Speaker
solidified that for me and showed the way that Elon thinks about things and his vision for things is that most companies don't release their patterns, right? Their patterns and their patterns under lock and key. For sure. Tester release them. And so Tester release the patterns so that other car manufacturers could then go and copy some of the technology, the charging infrastructure and the vehicles to be able to help transition the world to sustainable energy because
00:13:05
Speaker
whether Elon or Tesla as a business understood that it wasn't possible for just one car company to do that and so release these patterns because the purpose of the company was bigger than itself it was you know this massive worldwide saving the planet mission and vision and I think that's one of the reasons Tesla has succeeded against maybe other electric vehicle companies because
00:13:30
Speaker
We were all motivated for that. And so everybody probably had their own intrinsic motivations, but they could see where the company was heading. Then Elon released his master plan and it talked about they started with the original Roadster, which was really, really high priced, very niche, very few people bought it. Then it moved to Model S, still high priced, but started to get those early adopters, then Model X, and then it started moving towards mass market.
00:13:56
Speaker
And so everybody could see the goal. And I wasn't there because of sustainability. I was there because I enjoyed the tech part of it. I was excited for cars. But once I was in, my mindset massively shifted. And all of a sudden I cared about doing something bigger than just my job, bigger than my purpose. It was all for this greater good. And so we put in
00:14:16
Speaker
Stupid hours, you know, I would work 90 hour weeks. And so this is all over the media, right? Is that healthy and Elon pushing or saying if you're not doing 90 hours, you know, you're not fit for this company. And that's true. If you if you didn't want to do it, people would fall out and would drop out and leave the company into quite a high turnover rate to start off with. But
00:14:35
Speaker
Everybody that therefore was left was so fixed on this mission. And so I think as you transition that into the small business world, if you can find that why and you can find something that means and matters something to every single employee and recruit to that thing,
00:14:52
Speaker
the magic happens. That's where you start to see all of this come into play and people will want to work extra hours or they'll go above and beyond for customers because they care about the why and they're not just there to earn a paycheck at the end of the day or to get on the pat on the back.
00:15:07
Speaker
It's interesting, isn't it? Sometimes, you know, in, in some, occasionally it's faster, it's, it's safer to go around a corner fast than to go around it medium speed, right? In racing terminology, you almost feel like aligning an organization around a big vision is sort of easier than trying to create the, get the benefits of a vision when you don't really have one. What about the connecting vision and traction then, Ash? Like how, um,
00:15:32
Speaker
How maniacal was the organization in planning initiatives that lead up to the deliverables that move the vision forward? You talked about the way they very cleverly introduced models that slowly went to the more affordable mass end of the market as their ability to mass produce products went up. That's clearly very thoughtful.
00:15:53
Speaker
had a number of world-class operators self-evidently from the operational success of the organization. But Elon Musk is known as a famously like mercurial person, almost like impulsive. The personal brand of Musk goes kind of against this idea of not buying off more than you can chew, getting shit done in 90 day increments or whatever, and then grinding towards your one, three and 10 year goals. It's hard to picture Tesla operating that way, because it sounds like it was all about buying off more than you can chew, but they also clearly
00:16:23
Speaker
Got it done. So can you just help me understand how the vision actually got delivered in increments? Yeah. And the reflection on that is that
00:16:32
Speaker
There wasn't really then, there wasn't a breakdown. So Tesla didn't have this breakdown of, okay, if that's our 10 year goal, we've got to do this first, we've got to do this first, at least when it got to sort of the day to day sort of operational level within the business. I'm sure Elon and the other sort of C-suite had this plan and that was presented in the master plan, which is published online so people can see that kind of transition from early adopters into mass market.
00:16:58
Speaker
But it never really sort of transitioned down is to say, okay, in order to reach that endpoints, this quarter, we've got to do this, then this quarter, we've got to do this. In the very early days, it was about survival. And you know, emails from Elon were leaked, you know, on a regular basis. Yeah, I've seen them. Yeah. So kind of really black and white, right? It was all about transparency is like, if we do not deliver this many vehicles, if we do not save this cash, we will die. The company will die. And
00:17:28
Speaker
That was essentially the way that the business ran. It was like, OK, what do we need to do to survive this quarter? And intense is probably the perfect word. The hardcore, as he says.
00:17:41
Speaker
Yeah, I would sort of, I kind of explained it as like this adrenaline ride. It was constantly adrenaline filled, because you just had to survive. It was every single thing matters. And as I say, I'm sure, you know, my early years, I was kind of just in the customer service teams, and so probably didn't see exposure to it. And then as I transitioned into that final role, it was all about Model 3 is critical to this future success of this company and making this goal achievable.
00:18:08
Speaker
And then my mandate was clear, five times growth with no additional people. And so then it's like, OK, how do you actually achieve that? And so we broke that down. We didn't have a quarter. We did. We had one quarter to do all of that. And so I was assigned the role about 90 days before Model 3 was arriving in tens of thousands of cars. And it's like, oh, OK. And so amazing team of us all got together and said, OK, what needs to happen in order to make this possible? And so we created our own plan.
00:18:36
Speaker
And I think that's one thing that probably Tesla and Elon did well that probably doesn't work in a small company is it kind of completely left that open to employees to decide and to the leaders to decide. And there's probably a fine balance of that in small companies of whether they can go rogue or whether you need everyone to kind of be on the same path. Can I just jump in there? I talk when
00:18:58
Speaker
I talk about my journey and I talk to founders that maybe hits different levels of sort of growth ceilings. And I talk about often talk about the difference between abdication and delegation. And in my very middling ride, abdication virtually always cost me I came up into the entrepreneurial ecosystem believing that if you hire great people and just leave them alone, magic will happen. Problem is you don't really know if they're great people if you leave them alone. Yeah, like so
00:19:26
Speaker
It's really interesting that what has clearly worked amazingly well for Tez. I mean, it does sound like it's apply clear vision, apply plenty of structural pressure, get great people, and then broadly... No, that's too much of a jump, isn't it? You weren't left alone.
Problem-Solving and Performance Culture
00:19:41
Speaker
I must... When would... How would someone...
00:19:44
Speaker
How would a team be intervened upon when it was off track? Did you ever see that or not really? Because it must have happened from time to time. Yeah, absolutely. And so I don't know if I like the terminology for it, but a war room. And so the war room was set up in order to do that, right? And everything was, as I said, so quarter focused. And so essentially, the business would shut down for the last four weeks of a quarter. And it's like, we have to hit this delivery volume in order for the share price to reach where we need it to achieve, to generate investors and cash in the business.
00:20:13
Speaker
and generate the share price to survive. And so as it came to model three coming up, there were so many problems, you know, we're, we're dealing with maybe 100 cars coming through to all of a sudden, there's a ship with 5000 cars. Things did not go well, right? It's it's inevitable that things were going to go out. I'm not an expert in customs are not an expert in shipping and
00:20:33
Speaker
car ports but it's like let's all go on site and just look at the problem and so it was that visual piece of let's get together and so every day for half an hour every morning I would host a war room and so all of the teams that were fed sort of their work would feed into my team's work stream were in that room and we'd go through really clearly what do we need to do today in order to fix the problem for tomorrow so it's really short-sighted but it was just focused on
00:21:00
Speaker
What actions have we got to take? What are the problems? How do we solve that? And then it was clear actions assigned to every single person that by the next day These actions must have been completed and if not they were called out and they had to explain why they hadn't done it Just to be explicit then so I'm assuming every now and again someone's not performing would the culture be Kind of like the Netflix style culture where it's just like that person's got to go and we got a backfill or just do without them like how how practically
00:21:31
Speaker
would that manifest when something's not going right and it's because somebody has just not got it or they've lost whatever they did have? Yeah, so I think what you see in the media and a part of that is true and part of that I don't believe is true. And so if you read the media, it's very much a case of make one mistake, you're out, game over, you're fired instantly on the spot and off you go. And there's a few cases of times that I've probably experienced that. But actually,
00:21:59
Speaker
Tests are operated on a massive trust and honesty policy. And so I remember a time I messed up. I forgot to send one email, which meant one ship of cars didn't travel to Norway and therefore wasn't going to make it in time for the end of quarter. And so I emailed Elon and said, I've messed up. Here's what I've done. Here's what I'm going to do about it. Here's how I'm going to make sure it doesn't happen again. Everything was okay.
00:22:22
Speaker
Wow. Sending that email is going to be an intense moment. So the worst part of that was I was just getting onto a plane as one of my team called me to say, you're an idiot, you've forgotten to send that email. And so then I had no internet. And so I'm on this plane, like an hour and a half stressing and panicking. I'm like, this is it. I'm fired. I was getting ready to tell my wife. I was like, I've messed up. This is the end. And I just spent the time on the plane thinking like, how like,
00:22:48
Speaker
How do I how do I fix this? And so it was it was transparency. And I think that was what I learned was if you're honest and open about things and you say, you know, you've made wrong and you know, you know what you can do to stop it from happening again, that worked. But there was for sure a very high sort of bar of performance where people had to achieve. And there's you know, you see that definitely in the media of reports of people getting let go and senior execs being let go. And because of performance related things. And there was a very high bar.
00:23:19
Speaker
but never on a personal level. It was always about, we have to achieve this goal no matter what. And so if you're not the person to get us there, there is someone else that is. And that's definitely something Tesla has an advantage over a small company is that when they post a role open, thousands and thousands of people would apply.
00:23:38
Speaker
And so essentially, people are just a cog in a machine. And so that's what I don't recommend small companies to do, because people are more than cogs, right? They're, you know, they're, they're the true foundation of the business without the people, nothing happens. And so getting that why and getting everybody motivated to that one goal in a small company is critical because you can't just hire people instantly. And so that's the
00:24:01
Speaker
Yeah, I don't know if I've fully answered the question. No, you really have. Two parts. Yeah, and the bit that I picked up from that actually, so Netflix call it talent density. They say without talent density, nothing else works in their model. And I think what you've just described
00:24:16
Speaker
is incredible talent density. And actually, in order to survive in the Tesla culture and get promoted, you would have to meet the talent density requirement, which means other than honest mistakes or going off the boil, which is going to be less common than just not being good enough to make it in the first place, they've got the density to then enable that culture to hang together. And again, Netflix call it sort of freedom, freedom and responsibility as a culture. And so if you wanted to imitate that in a small business,
00:24:44
Speaker
you would have to be unbelievably good at attracting talent and then bring it. So you can have enough talent pipelines to only get brilliant warrior types. And I guess the biggest learning I've taken is that for the right reason, small companies are perhaps a little slower to make decisions on colleagues that are not performing, right? Because there's a bigger risk, there's a more financial impact.
00:25:11
Speaker
You know, to my earlier point, I think small businesses should take their time because the people values are higher than they are at Tesla for sure. But there has to come a point where you say, actually, this person just isn't right for us. They're probably unhappy as well. So you're probably doing them a service as well.
00:25:29
Speaker
And obviously there's the coaching conversations and you try to support them through that journey. Whereas Tesla was very sort of, this person's not right. This is the end of the road. And at least in the early years, there was no real sort of performance management. It's like one strike and you're out. As time went on, there was a little bit more performance management for some roles. And obviously there's this kind of legal compliances that you have to fall into. But in general, it was a very sort of clear cut decision of this person's not right. Let's move on.
00:25:58
Speaker
Some people just couldn't cope with the scale, right? It was OK for some people in those couple of years. And then as it grew and people's responsibilities and accountabilities grew, that's not right for some people. And I think it's good. Some of those individuals stepped out on their own terms and said, actually, this is no longer for me and I'm going to I'm going to step out. And that's OK. And I think that happens a lot in small businesses that people probably try to sort of keep pulling on and dragging on and dragging on thinking I can do this when actually, you know, their skill set might be lined with something something else.
00:26:27
Speaker
I guess when you're growing that quickly, like the increments in scale are so significant that it does force the decision in small businesses, we're growing more incrementally, it's sort of easier to extend and pretend. So on the people component, we talk about in EOS terms, we've got right people, those that are aligned with our values, exhibit the behaviors that reflect our organization and then right seat, people are good at their jobs. It sounds like what you're saying is, from a Tesla perspective, the values were,
00:26:55
Speaker
you've sort of articulated the values, but they were almost really expressed in right seat terms, like you just were performing or you were not performing. Yeah, absolutely. It's, you know, everyone had a goal. And I actually think one thing that Tessa did very well was given each individual one number. And so I knew my role was to deliver as many vehicles per quarter as I could. Nothing else really mattered. It was doing that as cheap as possible with as little people as possible, but getting that number.
00:27:21
Speaker
And so it's like more so it moves you into the data component. Yeah. So it kind of measurable. Yeah. The two kind of merge, I guess, with the people and things, because that was my that was my goal. And everyone I was focused on that. And so then it's about building a team that could achieve that. And tests, I guess, at that stage didn't care about customer experience as much. You know, there's
00:27:42
Speaker
definitely if you speak to a lot of early owners, it was like people didn't care. It was like, we just need to get these cars out for the company to succeed. And I think with people, because there was this high churn, what Tesla didn't do very well at the start, which is one thing I've learned having followed EOS for a few years now at Clearview, is that
00:28:04
Speaker
Having those standard operating procedures in upfront and getting those people trained properly and onboarded correctly is the key. And so Tesla would just constantly keep throwing more and more people at the problem. And some of those people would say, some of those people would go. There was definitely nowhere near as much right people, right seat using the GWC in order to make sure, do you actually have the right people? How can you coach those people to get to those roles?
00:28:29
Speaker
A lot of the roles that I got promoted into was just for sheer determination and hard work and a few successes and an amazing team that helped me to get that.
00:28:39
Speaker
It wasn't because potentially a manager as such sort of identified that, coached me through it and wanted me to get to that role. It was more opportunity and just sheer brute determination, I guess, in that. And I think the recruitment part is key and Tessa didn't potentially do that onboarding part afterwards, right? And so I remember we had to hire 200 people really, really quickly for sort of an inside call center.
00:29:07
Speaker
But there was no training. And so all these people joined, it's like, oh, they now have no idea what they need to do. And so it was far too late that then the Academy team, they were existed, but it was very small scale. It was just, you know, one-to-one training almost or sort of small groups. And then all of a sudden when Model 3 happened, needed this massive sort of learning and Academy team that then really put structure into this training. And it was probably hell for them to all of a sudden think of all these, uh,
00:29:33
Speaker
these learning programs of how to get all of these brand new people up to speed as quickly as possible because the cars were coming no matter what. So we had to be ready for that. And I think that's one thing small businesses can do better than Tesla is to get that onboarding experience right.
00:29:48
Speaker
recruit people based on your core values and your mission and focus more on the people side of things rather than perhaps the skill set that person brings. Are they the right culture fit? Are they the right team fit? Do they have the right work ethic? Are they motivated to join us because they care about what we're trying to achieve? And I think that solves for probably 75% of a person in general anyway. That's really interesting actually that you
00:30:12
Speaker
I mean, documenting core processes is something that all entrepreneurs tend to struggle with, right? And it is a big part of EOS. I hate this as well. Yeah, for sure. And I think EOS tries to make it as painless as possible by saying, just list the 20% of steps that you expect to deliver, 80% of the outcome. Yeah.
00:30:27
Speaker
But you're right. In a small business where you don't have the capital generally to swing and miss many, and actually you also don't have the upside that causes investors to suspend disbelief and give you the time, right? Exactly. In a small business, kind of the upside's less. The downside is less in absolute terms, but more in relative terms because it's usually all of the assets that the owner has.
00:30:53
Speaker
You kind of leaning on core processes a bit earlier makes sense, right? Cause you're kind of, you're mitigating your downside and you're not really capping your upside in the same way because.
00:31:01
Speaker
you're not swinging out your shoes, swinging for the fences to begin with, really. Recruitment's not cheap, right? It's an expensive process, whether that's for the adverse or just the time invested in it. And so many companies spend all this time in recruitment and finding the right person, but then waste it once the person are bored because they don't have a proper onboarding policy, they don't have training guides in place. And so that person gets frustrated, maybe leaves after the first three months. It wasn't clearly defined to them what was expected.
00:31:28
Speaker
I think one thing we've really learned at Clearview is that if you have the process documented well, you're looking for the right type of candidate. You explain all of that to them. You have the right onboarding process. For our hires, we send them an email in about two weeks in advance saying, here's what your first two weeks will look like. It's super fair. We set expectations all the way through.
00:31:47
Speaker
And you're trying to maximize that onboarding success rate, right? And Tessa didn't care about that. It was like, get people on the ground as quickly as possible to basically just all hands on deck. And as I said, the company would shut down for the last four weeks of the quarter, every quarter.
00:32:03
Speaker
So marketing, sale, everything was shut down and everybody would just be focused on delivering cars and therefore it was just about almost people, like bums in seats as opposed to the right people in the right seats. It must have been an amazing, amazing experience. Talk to me about the data. So in EOS, of course, we've got the scorecard five to 15 measurables. Everybody's got a number. You've got to take a weekly snapshot to give yourself an absolute pulse on the business. How well instrumented was Tesla from an internal MI
00:32:30
Speaker
perspective, like you obviously said you had a number. Did that pervade kind of all roles? Did you have data coming out of your ears or not really particularly? No, I'd say not. We had the ability to create our own reporting and that of course has its consequences as well. For sure, you know, the senior execs in California had immense data for the investors, for the manufacturing side of the business and that production side.
00:32:54
Speaker
for I guess the customer service teams, the delivery teams, the logistics teams, the sales teams. There wasn't an insane amount of data and I think that for me is still a learning today is keep that data simple and you know you can over complicate your EOS scorecard as we did for a period of time and we found that now stripping it back to basics actually is much more beneficial than having this fancy dashboard.
00:33:15
Speaker
And I think, yes, I had my one number. There were other sort of supporting numbers to that. So eventually customer service was added into that. But my goal was to deliver as many cars as possible. And I think the one thing the data taught us and one of the biggest lessons I got from Elon was you should still care and understand all of the other processes and departments and their processes that intertwine and affect your world. And the best example I can give of that is that when I first met Elon,
00:33:46
Speaker
I was given all this prep work up front to say, don't do this, do this, do this. And I was just determined to get it right and make a good first impression because I've heard of stories of like my predecessors that didn't get it right and their cards were marked. And I was determined to. And so he said, how are things going? And I said, there's an issue in custom, something to do with the software that's not working, so cars are stuck. And he said, what is the issue? I was like, I don't know, something to do with the custom software. He's like, that's not what I asked. He's like, what is the issue? I was like, oh, the customs team are dealing with it.
00:34:17
Speaker
was the wrong thing to say. And at the time, I didn't fully comprehend it. And then he said to me, go and find the person responsible for customs and bring him in the meeting. So I'm like, Oh, no, what have I done? So I had to go through the office, find this poor guy, bring him into the room. And he explained it perfectly. He did an amazing job of what we're doing to solve it. And that taught me instantly of
00:34:39
Speaker
you need to understand, maybe not fully intrinsically, but you need to understand the levels and the data that pulls in that affects your numbers so that you can go to them and say, hey, I need you to solve this because this is the consequences having. And I think more recently at Clearview, even in the last few months, it's really understanding that it's one team, right? It's how do we all collectively come together to share our own data to say, how can we together solve these problems rather than all the individual silos for sure.
00:35:05
Speaker
That's so cool and so heavy. It was scary as well. But what an amazing experience. Talking about normal small companies, one of the things I often find myself challenging leadership teams on is to genuinely understand their own numbers, like their own management accounts, right? It's only like a handful of tabs on a spreadsheet and you just go row by row as a management team and say, do you understand these numbers? Do you understand what it means, what the change means, where it comes from?
00:35:33
Speaker
because the number of leadership teams that don't, they just abdicate whoever's in the finance seat and do their bit. And very few of us are taught that, are we? I mean, I wasn't taught that in my career. I unfortunately learned it by abdicating finance and then failing to understand my own business for like the first five years of eight.
00:35:51
Speaker
It's a horrible omission, but I just didn't know what it looked like. I joined Clearview and one of the bullet points on their job description was to own profit and loss and cash flow and internal finance. We have a fractional CFO in the background that helps me for sure.
00:36:07
Speaker
And i was very honest with you, i was like i can take all the things on your job description but i can't do that when i've never done it and i think unless you go to university or study finance whatever there you probably never exposed to it in that way and my first year at clearview was was hell and so
00:36:24
Speaker
Makes me clammy thinking about, you know, the number of mistakes I made, you know, reporting forecasting a profit number to our MD and then it was wrong and just living through this hell of learning that and I'd like to think now I've come out on the other side, but I think it's important for each team to know what knock-on of effects they can have on other teams and how everything interlinks and
00:36:45
Speaker
I think that's one thing that EOS does very well with the accountability chart, but it's then taking it that step further to say, okay, this department, you know, you have this effect on finance and this is how you can improve
Financial Understanding in Operations
00:36:57
Speaker
it. And then you can introduce things like parachute programs, whatever, people to kind of cross train and sit in other departments to see that. But yeah, I think that's a massive learning is for sure is understand your data, but also the data of the business and what role you can play.
00:37:12
Speaker
Yeah, those critical dependencies, because I have read things about Elon Musk talking about first principles thinking and idiot index and all that kind of stuff. For those that don't know where he asks his finance team to look at the implied price of a component based on the cost of the raw materials so that he can work out where there's excessive margins being baked into the supply chain that Tesla doesn't need to just accept in components.
00:37:38
Speaker
It's astonishing, but amazing to hear you kind of being exposed to a small amount of that at your first meeting where you're expected if you're going to have an opinion for it to go all the way back to the first principle. I thought I was going to get fired. Yeah, I thought I was going to get fired. I walked out and I burst into tears. I just completely burst into tears because I've messed this up and thankfully he saw something in me and so I didn't get fired and I was still there and helped out. I bet he didn't do it twice though.
00:38:03
Speaker
I learnt very quickly never to do that again. The first principle part is something that I've not seen anybody ever replicate in the same way that he was able to replicate.
Elon Musk's Problem-Solving Approach
00:38:14
Speaker
If any small business can replicate this, I think it's the key to success.
00:38:20
Speaker
I think so many small companies get stuck into solving the nitty gritty and they get stuck at the, you know, they see a problem, but the problem's down this end of the process, right? It's right at the very end of the process and it's, okay, but let's step back a few paces. Why is that thing even existing? Do we even need to get the customers to sign that contract? Could we just get rid of the contract altogether? Or, you know, there's lots of different ways you can apply that and really take it back to the initial core of the problem. What is it you're trying to solve? And can you just completely redesign that process?
00:38:50
Speaker
It removes so much wastage. The perfect example with tester terms was financial documents. When you get a car and you lease it or finance it, the paperwork is really manual. Sometimes you have to sign it in wet ink physically in an office or you have to go somewhere else to sign it. And eventually the kind of ethos that tester was, let's just get rid of it.
00:39:09
Speaker
Why do you even need that? And so Tesla set up its own bank, like finance company, and so customers then to finance their cars directly with Tesla, there was no paperwork. You just had a thing in your app or in your browser, you clicked accept, done. Solved. And you don't have to be...
00:39:29
Speaker
Yeah, you don't have to be tempted to apply that, do you? Like, no, anybody can do it, you just have to remind yourself to go back, don't rush into it, don't get stuck in the weeds, just pause, take that further step back. And I'm guilty of this now, for sure, of getting stuck in the detail. And I think if you take that pause, think through the bigger problem and really understand, can we just remove this obstacle together, rather than just solving a small problem at the end of a process. And that, for me, I think is a way for businesses to kind of really shift the needle and be different to competitors.
00:39:58
Speaker
That's unbelievable. Okay, so we've pretty much covered all of the components. We've sort of alluded to issues, issue solving. What would be great is just a little bit on, in EOS we call it traction. This is really like, this is your 90 day world you've alluded to quarters there in Tesla universe.
00:40:16
Speaker
We also, of course, have the Level 10, the weekly meeting at leadership level. Were there any kind of habits and rituals beyond making the quarter in the Tesla Universe? I appreciate different big company, public company, quarterly investor reporting cycles, but I'm just interested in the kind of
00:40:33
Speaker
repeating rituals and habits that drove the drumbeat in Tesla. Is there any parallels or differences there? Yeah, for sure. So most teams had a weekly meeting. A weekly, it definitely wasn't in the same format as a level 10. Tesla was very much against PowerPoints and slides in that sense. But
00:40:52
Speaker
There was a weekly meeting and so I'd have a weekly meeting with my team and we'd look at, you know, what are we trying to achieve this quarter? Are we on track? Are we off track? And it's only sort of recently that I see those parallels between the two very different scales, very different sort of levels of speed, but the foundations of this are the same. So I really think you can apply the same philosophy from a massive company like Tesla to a small business.
00:41:15
Speaker
getting everybody rowing in the same direction, super clear on what are the things you're trying to achieve, who's accountable for that, meeting each week to go through those things, and holding everybody to make sure those deadlines are met. The sales team would then do it daily sometimes, especially as we got towards the end of the quarter, and so quick sort of daily huddles or stand-ups to align on those things. But
00:41:37
Speaker
Then kind of that step further out was the quarterlies and so test so we did quarterly meetings as a team as well to really understand Okay, what worked last quarter, you know, why didn't we achieve a hundred percent delivery rates? What were the problems? How do we then focus that and so sometimes that would drive sort of our sort of personal task list for the sort of following 60 days of the new quarter and
00:41:58
Speaker
is how can we very quickly learn from what went wrong at the previous end of quarter, solve those things frantically with the other teams and then get ready for the next sort of last 30 days of the next quarter and it was this constant reiteration towards that bigger goal but we never really knew what the bigger goal was within a year apart from just deliver cars and sell more to survive and keep the business afloat.
00:42:19
Speaker
This has been absolutely amazing. So of course we started with the provisional title, what does Elon Musk have that I don't? And the answer seems to be several billion dollars, several tens or maybe even hundreds of billions of dollars. But actually a lot of what you've articulated during the course of this conversation is
00:42:37
Speaker
It's more similar than perhaps I expected, just at a much grander scale with a wild burning intensity that I personally don't have and don't want to have, but I can admire anybody that does. And maybe there's a small business owner, first time founder listening that
00:42:53
Speaker
does want to be the next Elon Musk and maybe he is going to use something like EOS just for the first period of, or maybe not, maybe not use EOS, maybe just figure it out, but they just need to think about some of these principles that were baked into Tesla, perhaps on a, you know, I don't know if it was, it was probably not an unintentional basis because of course Tesla's not Elon Musk's first company, right? So a lot of the things that he clearly learned in prior
00:43:18
Speaker
journeys, whether it's zip to PayPal, may then have made it into Tesla. So folks, if you're listening, eat your greens as a business management leader. If Elon Musk can be, can align people around a vision and then get the right people on the bus and then hold them accountable to higher standards, make sure they understand their numbers.
Applying Lessons to Small Businesses
00:43:35
Speaker
I think the only one you gave him a pass on ash is maybe the process component, right?
00:43:39
Speaker
Yeah, it's a mindset for sure. I think it really is a mindset and I think anyone could apply what he does and what Tesla does within and so the process stuff at Tesla was very much do as much in-house as you could and so don't work with third parties because you can't control that as much and perhaps that's a big difference between small companies, especially for small companies that
00:44:01
Speaker
are outsourcing their HR or their recruitment, but eventually Tesla tried to bring absolutely everything in house and to have that complete control of its own destiny. And so if a small company can do that without having huge financial implications, I think it gives you more control over your end product or your customer journey or whatever it is that relates to your business.
00:44:25
Speaker
to your point I think small businesses can do the same as Elon has done, it's a mindset, it's a way of thinking through things at first principles and getting that mission right and getting people aligned with that and I think small companies can still see similar levels of success. Interesting so actually even the process component they got to in the end it was just first it was engineering led and sales and service and some of those other areas was was not the top priority so actually I mean it makes sense even
00:44:53
Speaker
You can't run a business of that scale and run all the functions internally, unless you have some version of the right and best way of doing things. I guess it's just, if you're going to open a call center, they just put the bodies in first before, instead of spending a year planning it. That's the point. Yeah. So the call center we created was exactly that. It was 200 people really, really quickly. I've never created a call center in my life. And so it was like, we just opened up, the recruitment team did an amazing job with like assessment days. These people were brought in, trained up to speed. We do huddles on the, on, they were across two floors. We do huddles.
00:45:23
Speaker
Yeah, as a group of people, just lots of ideas and just learning as we went and tweaking it and mistakes happened, but it's like, okay, let's go again, let's fix. And I think the kind of phrase that kind of comes to mind is that sort of raise an issue, fix it, discuss it, move on, make a decision, get going and just keep that constant pace towards that kind of end goal. And I think small companies can do that. They have to be careful of the risk, perhaps more than Tesla did, but just that constant ideas and refreshing and trying something, giving it a go and then learning from it.
00:45:43
Speaker
Thanks for watching.
00:45:53
Speaker
Super inspiring. Ash, thanks for being so generous with your time and insight. Are you happy for folks that have enjoyed this? I know you won't be able to talk to everyone, but if I put your LinkedIn in the show now, please connect and follow your journey. Yeah, for sure. And thank you for your time. It's great to talk to you about it.