A week after his now-famous Tweet heard round the investment world, Elon Musk hopped on the phone with The New York Times for an hour-long interview looking to—I guess—explain his current situation and—I guess—reassure the market that all is A-OK with Tesla.
So much for that plan. On Friday the market sharply stepped away from Tesla, and no wonder. The interview comes off as playbook for what not to do while you’re a CEO running an embattled company at a stressful time: Exhaustion, little support, sleeplessness, impulsive behavior and on and on.
But my big takeaway isn’t that Musk is crazy or off the rails—it’s that the board is failing shareholders by failing Elon Musk.
Business is a team sport, or at least it should be. Reading between the lines of The Times story what I see is a brilliant man who has installed nearly zero framework around him to insure long-term success—and no one has forced him to do so. His board should know better—Musk’s recent eccentricities aren’t some sudden revelation. Back in 2012, at a prior job, one of my reporters spent a few days with Musk and got to know him pretty well. Read the story and you’ll see why I’m not surprised by the current state of Musk—the déjà vu is palpable. Even back then he was melancholy and lonely, holed up in a house with little furniture, in the midst of divorce, struggling to make his dreams real. It didn’t sound exactly like Howard Hughes, but you could hear an echo.
Fast forward to today, and the stakes are much bigger, and so is the toll on Musk. Given the size of Musk’s ownership in Tesla and his near-absolute control of the company, every investor knows that a bet on the stock is a bet on him. That’s why they should be paying very close attention to a few key parts of what came out in The Times this morning. Doing anything else is shirking their fiduciary duty to the company. A few things really stood out:
He’s Working 2x As Much as Peer CEOs
In the interview, Musk tells The Times he had been working up to 120 hours a week recently and said he had not taken time off of more than a week since 2001, when he was bedridden with malaria. “There were times when I didn’t leave the factory for three or four days — days when I didn’t go outside,” he tells The Times.
That’s about 2x what an average American CEO works according to a recent study by Harvard Business School legend Michael Porter. Porter and co-author Nitin Nohria tracked the minute-to-minute actions of 27 CEOs for months and found they worked an average of 62.5 hours a week, a schedule Porter declared “grueling.” The study found the CEOs slept about 6.9 hours a night and had about 2.1 hours a day for personal time.
No wonder that when The Times asked Musk about his physical health, Musk said “It’s not been great, actually. I’ve had friends come by who are really concerned.”
He’s Making Some Very Bad Calls
When Musk sent Tesla shares soaring last week by Tweeting that he’d secured financing for a taking the company private at $420 a share, he blindsided the market, investors and his own board, who were never notified about the plan beforehand. According to The Times, he dashed off the Tweet in a car to the airport after an early workout. “He acknowledged Thursday that no one had seen or reviewed it before he posted it,” The Times reported.
“He said in the interview that he wanted to offer a roughly 20 percent premium over where the stock had been recently trading, which would have been about $419. He decided to round up to $420 — a number that has become code for marijuana in counterculture lore. ‘It seemed like better karma at $420 than at $419,’ he said in the interview. ‘But I was not on weed, to be clear. Weed is not helpful for productivity. There’s a reason for the word ‘stoned.’ You just sit there like a stone on weed.’”
The board should re-read the section above a couple times and let it sink in.
He’s Self-Medicating To Continue Working
To handle the stress and overwork, Musk appears to be reliant on Ambien to sleep. “It is often a choice of no sleep or Ambien,” he tells The Times.
The board is already concerned about this, according to The Times. Citing “a person familiar with the board’s thinking”, the paper reports that “sometimes the drug does not put Mr. Musk to sleep but instead contributes to late-night Twitter sessions.” If that’s truly the case, they have good reason to worry—and do something about it.
He Is Very Alone, With No Help In Sight
According to the story, Musk’s recent struggles to produce the Tesla 3 at profitable numbers have cut him off from whatever support structure most top leaders have in place to keep them emotionally stable and grounded. “This has really come at the expense of seeing my kids,” he told The Times. “And seeing friends.”
That includes, he said, spending his 47th birthday in the Tesla factory “All night — no friends, nothing,” and nearly missing his brother Kimbal’s wedding. Kimbal, it’s worth noting, is a Tesla director.
And yet, the board has somehow failed to successfully get Musk a solid number two to help. Musk told the times that “to the best of my knowledge,” there is “no active search right now.” Citing “people familiar with the matter,” The Times said a search is underway, “and one person said it had intensified in the wake of Mr. Musk’s tweets.”
Asked to comment about the interview by The Times, the paper got a boilerplate statement that comes across as defensive and badly out of touch.
“There have been many false and irresponsible rumors in the press about the discussions of the Tesla board,” the statement to The Times said. “We would like to make clear that Elon’s commitment and dedication to Tesla is obvious. Over the past 15 years, Elon’s leadership of the Tesla team has caused Tesla to grow from a small start-up to having hundreds of thousands of cars on the road that customers love, employing tens of thousands of people around the world, and creating significant shareholder value in the process.”
There’s probably a lot more going on behind the scenes—one would certainty hope so. But rather than blandly defend Musk’s “commitment and dedication” —which isn’t in question—maybe the board should step up and return the favor. This is happening on their watch, and he could clearly use a hand right now. The board should give him one.