When multi-billionaire and Tesla Motors CEO Elon Musk acquired Twitter on October 27th, he assumed leadership of a company that hadn’t earned a profit in eight of its ten years, https://www.nytimes.com/2022/04/28/technology/twitter-first-quarter-earnings-elon-musk.html.
By November 4th, eight days later, 1.3 million users fled Twitter. Revenue dropped dramatically as advertisers, Twitter’s main revenue source, pulled out. One could feel sorry for Musk—except Twitter’s crises resulted in part from Musk’s own “I wing it” actions. His mistakes provide valuable lessons for other employers.
Don’t alienate those you most need to survive
Musk’s own tweets and heavy-handed actions alienated Twitter’s employees and stakeholders. In his first eight days, Musk fired massive numbers of Twitter’s full-time workforce, throwing remaining employees into survival mode. Remaining employees heard about the mass layoffs but didn’t learn that Musk cushioned the blow for those he laid off by providing three months of severance.
The media and advertisers heard Musk had cut 50% of Twitter’s workforce before learning from Musk he had “no choice,” as Twitter was losing $4 million a day and that most of Twitter’s content moderators working on front-line reviews hadn’t been impacted.
Negative stories flooded the internet. The take-away: if a leader doesn’t communicate his positive rationale, others may shine a negative spotlight on those actions.
Don’t threaten doom if you want employees to stay
On November 11, Musk warned Twitter employees that Twitter might not survive the upcoming economic downturn if they didn’t find alternative revenue sources. Musk ordered employees to end working from home and show up in the office. Musk may have felt this warning would light a fire under employees and engage their entrepreneurial thinking. Instead, it sent many of Twitter’s most talented professionals heading for the exits.
The takeaway: Dire straits messages can backfire.
Don’t ask employees for loyalty unless you’ve first delivered
Musk’s problematic conversation with Steven King about charging twenty dollars for verification—from which he backed down, halting his Twitter’s Blue Verified new venture—and his impulsive brainstorming of ideas about Twitter on Twitter sends the message he’s either playing with his new Twitter toy or making things up as he goes along.
His behavior neither inspires nor reassures, but this didn’t stop Musk from telling Twitter employees on November 16 to decide by November 17th if they will commit to working “long hours at high intensity” with “only exceptional performance” constituting a “passing grade”. He told employees to either reply “yes” to “hardcore Twitter” or receive three months of severance. For many employees, Musk’s ultimatum was the final straw. By midday on the 16th, members of Twitter’s Trust and Safety team, responsible for keeping misinformation and hate speech off Twitter, were discussing a mass resignation.
The take-away: don’t ask employees to work harder unless you first inspire them.
Employees, investors, and advertisers alike assess Elon Musk, and few appear to like what they see, a brash new owner. Despite Musk’s Tesla success, his initial offering of $44 billion for Twitter, far more than it appeared to be worth, cast doubt on his business acumen. Since Musk assumed Twitter’s helm, C-suite leaders have exited leading to huge losses for Twitter’s reliability and opening the door to a serious breach which could put Twitter at odds with Federal Trade Commission requirements concerning data security lapses.
Twitter’s Board no longer exists, and all decision-making now lies with Musk, who has a history of regulatory group compliance issues. In2018, Musk and Tesla paid $20 million in fines over Musk’s allegedly misleading tweets concerning funding. FTC violates can take a huge bit out of a company’s bottom line; as an example, Facebook paid $5 billion for privacy violations.
The take-away: the leader’s character and ability and how others perceive it is key.
Safeguard your company’s reputations
Within hours after Musk took over Twitter, anonymous trolls spewed tweets full of Nazi memes, misogynistic and racist slurs. One tweet showing a single racist slur in all capitals, remained online for 16 hours, during which it was retweeted over 700 times and liked more than 5,000 times. N-word usage increased by 500%, https://www.washingtonpost.com/technology/2022/10/28/musk-twitter-racist-posts/. Verified but fake twitter accounts flooded Twitter, spreading misinformation, duping other users, and eroding twitter’s perceived value. The take-away: don’t allow others to destroy your reputation.
The final take-away: leadership can turn a company around or take it down.
(c) 2022 Lynne Curry
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7 thoughts on “Elon Musk’s Twitter Crises: 5 Key Take-aways for Employers”
This piece is so good I printed it out to keep! Thank you!
Wendy, thanks! And please share it as you wish:)
Musk may be approaching this from a viewpoint that the company culture has to change (which, if they are losing $4M per day, it probably does) but considering how the staff responded to the “work harder or leave” message, he probably should have led with that (along with providing the transparency about why and the inspiration you noted it lacked) before enacting layoffs. He dropped the “work harder” message on a staff already demoralized by the layoffs and removal of the work-from-home policy, and it’s possible that enough people would have chosen to leave from the “work harder” message that additional layoffs would have been unnecessary. I am curious whether Twitter survives. There is such a thing as too many changes too fast.
Dee, Scofray and Wendy, thank you all for commenting. Dee, agreed that the timing and delivery are both key.
Marvelous. In a previous response, I think I said something was Elon-Musk-like and had to be “moderated” for it. It’s greater to see a whole column about Musk and how his actions are exemplars of what not to do when taking over in a new, highly visible position with an organization with a lot of staff who know the culture and how-to-get-it-done things about the org and unlike Musk, maybe this new takeover/take charge person would rather not alienate everyone there. As ever, these are great examples, tips, action steps!
Susan, thanks! I had a business owner call me because his partner was “taken” by Elon Musk and wanted to engage in similar actions, and I wrote this for him and others. And at the same time, I feel for those who run potentially bloated organizations. And, of course, the bloat is often at the top in terms of excessive salaries:)