What Tesla’s current challenges teach us about storytelling

Last week, I conducted a media training session at the Nasdaq Entrepreneurial Center in San Francisco for a group of emerging entrepreneurs. I find this kind of training always serves as a great reminder of the tools and tactics involved in telling an impactful story; and building a strong brand as a result. It also provides a refresher on why some stories fail to land—or ultimately fall flat—and therefore serve as great lessons and learnings for everyone.

As I conducted the session, my thoughts turned to Tesla—and more specifically, CEO Elon Musk—and the recent decline of what once seemed a bulletproof narrative and brand.

For those that haven’t followed the story, Musk is not having a good month. In fact, it is fair to say 2018 is shaping up to be a year the tech titan may wish to forget. Last week, in a memo to employees, Musk announced that Tesla would be laying off 9 percent of its workforce (about 3,000 employees). While the cost-cutting measure was part of a reorg and largely deemed necessary for a company struggling to meet targets, it was the culmination of a series of bad news for Tesla and Musk himself.

It started in February, when a production worker at Tesla wrote a post on Medium highlighting low pay, forced overtime and poor safety conditions. More recently there were reports of a self-driving Tesla that crashed into a pond and killed its driver. A report by Reveal(from the Center of Investigative Reporting) alleged, among other things, that Tesla failed to report a number of injuries at its plant.

The Tesla brand was (and is) in crisis mode.

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It is a remarkable change of fortune for a company and CEO who may have had their ups and downs, but generally seemed untouchable. As this article notes: “Musk, the CEO of Tesla Motors and SpaceX—the first private company to pull off a number of legitimately impressive feats, including the successful launch and landing of a reused rocket, as well as plenty of pointless but nonetheless dramatic ones, like sending a Tesla into space—is widely revered among a certain sector of the internet and engineering world. His appeal is part innovator, with designs on sending humans to Mars, and part eccentric billionaire doing whatever he wants, like selling $500 flamethrowers as a lark.”

This larger-than-life persona seemed to give Musk a license to claim just about anything and not be questioned—despite as this article notes that “[he] is notorious for making exaggerated claims about his businesses, whether he was announcing that he had received government approval for a New York to Washington DC hyperloop (he hadn’t), promising to test-drive a fully autonomous Tesla coast-to-coast by the end of 2017 (he didn’t), or claiming that the Model 3 production would reach 5,000 cars per week by the end of 2017 (it still hasn’t).”

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Musk has not responded well to the scrutiny and skepticism, and has lashed out repeatedly on social media, most notably at the press. His attacks culminated in a recent tweet that he plans to start a site called Pravda—a word that means truth in Russian—that would rate the credibility of news organizations. This followed a now-notorious call with analysts in May, where he grew hostile when repeatedly asked pointed questions about the company’s financial state, at one point saying “Boring, bonehead questions are not cool. Next?”

For a man once considered a master of media manipulation and image control, Musk’s response to this series of crises is a textbook example of how not to do it.

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So, what can we learn? First, brands should be wary of becoming too synonymous with their CEO. No matter how charismatic a CEO or founder is, no matter how visionary and inspirational, a business is built on products, solutions and the proven ability to deliver. A CEO who can paint a vision for the future is a welcome asset, but one that is ultimately completely disconnected from reality is not. Of course, powerful storytelling relies on a certain degree of hope and imagination, but it must be achievable and grounded in reality to resonate with an audience. Otherwise we enter the realm of fantasy, and a loss of credibility is not far behind.

Second, don’t mistake press and social media enthusiasm for your brand as a license to do and say whatever you please. It would appear Musk was lulled into a false sense of security by his legion of online fans—and the media that was willing to let his exaggerated claims go unchecked for too long. But social media is notoriously fickle, and the press can probe a company’s claims at any time—it is their job, after all.

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Third, it takes time to build a compelling story, to prove value and secure trust. One of the great dangers of the celebrity CEO (especially when they are active on social media) is that it is all too easy to undo good work with a single outburst. Musk may still have his supporters, but he faces an uphill battle to rebuild his credibility with press. His threats to leverage his wealth and influence to grade outlets seems vaguely undemocratic and underhand. In the current climate, where media outlets are being branded ‘fake’, Musk has managed to turn a challenging situation into an outright hostile one. If he thought the press were asking tough questions before, he should be prepared for a whole lot more.

While I don’t believe it is likely Tesla will unravel in quite the way that Theranos did, both situations serve as a reminder that celebrity CEOs and marketing stunts are no substitutes for genuine, authentic storytelling.