Elon Musk Should Recognize Value of Investor Complaint
Tesla stockholder Solomon Chau is not an enemy of CEO Elon Musk and his company despite filing a lawsuit. Instead, Chau is sending a protective warning signal as a call to risk management.
Chau names 11 board members and Musk in his suit. The petition alleges that Tesla breached its fiduciary duty by allowing and enabling a workplace culture of discrimination and harassment, which has resulted in loss of reputation and shareholder value.
Chau recognizes Tesla's management deficiencies and what needs to be done: responsibly raise standards of thinking and behavior within the organization and make critical improvements to governance and compliance in regards to workplace culture, respect employees and provide psychological safety.
If Musk sees Chau's lawsuit in this manner rather than an attack on him personally, he can learn from it and do what is necessary to protect the company and shareholder value moving forward.
Musk is noted for his bravado when complaints come against him so while he will be advised by lawyers not to conduct himself in that manner, when he does communicate it can be expected that he will show himself to be unmoved by this assertion that his workplace is in some level of crisis management.
While it will be difficult for Musk to accept this criticism of Tesla's workplace environment, if he can bring himself to a state of humility, regret and curiosity, Chau's legal complaint can prove to become a catalyst for Musk's benefit and inspire a strong, sustained push for higher standards, tighter governance, improved compliance and a healthier workplace culture and reputation, thus protecting his company and investment in it.
By doing so, Musk will be conducting more competent governance, compliance and thus, risk management.
That effort towards course correction would be more likely to succeed if the governance is daily, measured, analyzed daily and adjusted promptly when ethically needed.
Tesla can in addition, work to better develop top-down leadership by measuring them on how well they prevent the failures Chau's suit listed. Misconduct and enabling or empowering it must be stopped, without rationalizing and excuses.
Doing so will significantly improve company conduct and workplace culture for employees, therefore lessening the likelihood of future internal conflicts, whistleblowing, and lawsuits, and the subsequent negative media and social media coverage.
Musk need not thank Chau, and he likely won't, yet he can be appreciative, even if privately, for this push and opportunity to correct matters before risk escalates and the costs to defend and correct Tesla management dysfunction get exponentially higher, further damaging employee trust, labor relations, reputation and shareholder value.
Tesla would benefit from inviting in specialists to help it with what reliably works to assure a non-discriminatory and no-harassment culture and collaborate on designing and implementing a process and coaching leaders it in a manner that will work seamlessly.
Leaders can't be expected to "just know" how to make it happen. They must be trained thoroughly in mindset and practice. Tesla could test them thoroughly for their views on their mindsets involving the behaviors that they tolerate, propagate and turn a blind eye towards.
Tesla must govern daily with different sets of eyes, recording and examining observations and talking about them as a group, and do research to recognize and ethically respond to problems early.
Respectful communication in organizations and compassionate listening and responses are not 'a given.' No one believes they are lacking in character, professionalism and skills. Observers experience unprofessional, bad behavior differently.
Emotionally intelligent communication can be taught for healthy workplaces.
It has to be taught to more people than would be expected. Until this happens, poor workplace cultures will create harm and be a stain on leadership and organizations and as Chau asserts, reputation and shareholder value.
