Maintaining Acute Vision while Fostering Innovation

All great enterprises are born from a vision, and keeping that vision in focus – keeping enterprise on track – sometimes requires seeing it from a different angle. Henry Ford didn’t invent the car. He saw a better way to build it, a way which would drive down cost and increase productivity. Suddenly, the automobile was no longer an oddity; it became a defining feature of a nation. A century later, a massive infrastructure has grown up around the internal combustion engine, and while the vision may yet be intact, it has become stultified. Sometimes obstacles arise that challenge vision. And vision, however powerful in its ability to guide, eventually becomes shifty and obscure. Maintaining that vision, that direction, requires innovative thinking and tools for seeing problems from a variety of perspectives.

A Clear Vision.

Elon Musk has a powerful vision of fundamental change. Tesla Motors shook the automotive industry when they unveiled the Roadster. Electric cars were not supposed to be able to do that. How did they do it? Musk attacked a problem that experts said couldn’t be solved, and he solved it.

It was a simple question Musk asked, and it became the formative pulse for his vision: “What would the car of the future be?” First, it would be electric. The internal combustion engine is rapidly approaching the limits of its use. The new car would have to be powered by a better battery. Conventional batteries are too heavy and bulky to do the job. Second, the auto would have to be completely redesigned. Conventional cars are designed around the drive train and its weight. Third, the retail infrastructure would have to be unique to the 21st century. People should be able to buy cars online, reducing the additional costs associated with dealerships and their middleman markup. Formidable obstacles require ingenious innovation, and the strategies Musk employed to arrest these challenges speak to his acuity.

Identify the Obstacles and Approach them from Manifold Perspectives.

One does not easily shift the vision and direction of a multi-trillion dollar, century old institution. Ten years ago, the perspective was that lithium-ion batteries were not a suitable power source for cars. When they overheat, they explode. Musk believed otherwise. He identified the obstacles to converting lithium-ion batteries, researched the many companies manufacturing them, and ultimately partnered with Panasonic. They created a lithium-ion battery array encased in a cooling system. (The Model S has 7,000 AA-sized batteries powering its motor.) Was it an invention? Not quite. For years experts said it couldn’t be done, and along comes a man with a different vision, a different perspective, and the problem is solved. Great innovation can shift the vision of an industry, but industry eventually drives innovation. Imagine if the electric car had not ten but 100 years of innovation behind it. Musk had challenged the status quo and emerged with a product that would ultimately be the lifeblood of Tesla Motors.

Obstacles Sometimes Require Leaders to be Directly Involved.

Musk had calculated the price of his first car, the Roadster, to retail at $95k. The pieces were set in motion, but before he had built even one car, and internal audit revealed that the production cost would be $140k – a far cry from his initial production estimate of $65k. This was completely unacceptable, and Musk knew the gravity of this obstacle required his direct involvement. He hopped a plane to Europe and personally visited the manufacturing plants and suppliers. Woefully inefficient machinery and an outdated supply infrastructure lay at the root of these elevated production costs. So Musk ponied up the funds to update equipment and increase the efficiencies of his supply chain. He knew that sometimes you have to see for yourself in order to bring the problems into perspective. An executive submitting a report might not have had strength of character to paint an accurate picture. People have a hard time asking for more money.

Push People Outside their Comfort Zones.

Musk wanted a luxury sedan that could seat seven. A laughable concept at the outset, Musk soon partnered with a designer at Mazda, and when the designer realized that they were creating something entirely new, the wheels began turning. The passenger compartment of a conventional car is built around the drive train and its ancillary components. With those things removed, a vast amount of space became available to the designer. Also, an incredible amount of weight had been eliminated, so this car of the future could do more with less energy. Ultimately, Tesla’s Model S would deliver on its promises with surprising ease. With less vehicle weight, the additional weight of people did not affect the performance. Also, since there was no drive train tunneling down the center of the car, they designed the bottom of the car to house the battery array. An unintended effect of this design was that the Model S produced a smoother, firmer ride with substantially less noise. The concept of what defines a car had been completely rethought, and the effectiveness of the innovations surprised even the designers.

Challenge Conventional Thought.

Musk had promised the Roadster and pre-sold many of them at $92,000. In reality, the production cost was around $95k. In order to honor the quoted price and literally not have to pay people to drive his cars, he knew that the traditional marketing model had to be fundamentally changed. The days of strolling the car dealership would have to come to an end if Tesla had any hope of keeping costs down. Musk wanted to sell directly to consumers via a showroom. Consumers would go to the showroom, see the cars, and then go online to personalize the car of their choice which would then be delivered to them. The battle is still waging. The automotive retail industry has considerable political clout, and they are lobbying very extensively to prevent Tesla from selling directly to consumers. Consumer advocacy groups are heralding this change. Really, who likes to go talk to a car salesman? Musk recently vented at New Jersey Governor Christie over his decision to not allow Tesla to sell in that state, seemingly flip-flopping on a verbal promise made to Tesla just months prior. Musk’s rant on his blog (two of them to date) gave his lawyers sleepless nights and showed an uncharacteristic loss of perspective. Does that mean that Tesla will fail? Hardly. It shows that Musk has passion for his vision, and political doublespeak will not be the end of Tesla. His rants did accomplish one end. The media latched on to the story, thrusting the debate into the fore, and people began asking why can’t I buy directly from manufacturers?

Attachment to Vision can be Debilitating; Perspective is not Threatening

Is Musk the innovator who redefines an entire industry? Time will tell. Musk’s electric car may go the way of all its predecessors, but that was never Musk’s vision. His vision was to move the automotive industry into the 21st century, and it required radically new perspectives and ways of approaching problems. The innovations at Tesla Motors caused a revolution in thought. The existence of the Chevy Volt is a direct result of Musk’s achievements with the lithium-ion battery array, and the doors are now wide open. Daimler in Germany, a major investor in Tesla, is working on an electric version of the Smart car, and Toyota wants to use the lithium-ion battery array to make a plug-in hybrid.

So what is a Visionary? Does Musk have a magic ball the allows him to see into the future? A visionary is person who can grasp the entirety of a construct and deduce the only logical direction it can proceed. Nikola Tesla, the namesake of the company, emigrated to America, and when Edison met him, Edison immediately recognized Tesla’s gift. Edison and Tesla disagreed on a fundamental point; Edison believed that Direct Current was the future of electricity, and Tesla believed Alternating Current was the only form that could sustain a power grid. If not for Tesla, we would not have the massive power grids that make electric cars even remotely possible. History remembers Edison as the founder of electricity, but it was Tesla and many other innovators just like him whose perspective shaped the current vision we have today. There may come a day when the automotive world owes a debt to Musk in much the same way as the energy industry owes a debt to Nikola Tesla for developing the alternating current.

Too often, shifts in perspective and vision are seen as threatening and hostile and are thus resisted with great diligence and force. The question remains then, why not embrace these views? Why not seek them out? It might be that the corporation of the 21st century not only seeks new views but actually creates divisions whose sole purpose is to challenge the status quo – to maintain healthy perspective. Only then can the Vision of a company remain clear, relevant and intact.

1 comment
  1. On a side note – Musk recently announced that Tesla would not pursue litigating their patents should others decide to use them. This a a perfect example of a founder staying true to their company’s vision and mission.

    Tesla’s stock rose on the the news… seems doing the “right” thing also can have positive financial consequences…

    – Anthony

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