July 10, 2023

Tesla’s Purpose-Driven Approach to Management

Tesla has dramatically changed the automotive industry in recent years, in part due to its radical shifts in traditional company management. One recent op-ed argues that a dedication to purpose is behind the electric vehicle manufacturer’s success, from its innovative technology to its overall design approach.

Above: A Tesla logo (Image: Casey Murphy / EVANNEX).

In a recent piece for Forbes, writer Steve Denning points out nine ways that Tesla has revolutionized management to help realize its goals in advancing environmental sustainability. First and foremost, Denning notes that Tesla has integrated purpose into every part of its day-to-day management, starting with the company’s mission statement.

Tesla’s mission is “to accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible,” as stated on the automaker’s website.

Denning notes that this mission looked much more strange in 2008, when Elon Musk became CEO. At the time, the mission statement meant boldly taking on auto industry giants, inventing yet-to-be-discovered technologies and becoming a major corporation in less than a couple of decades. Since then, Tesla has made strides toward accomplishing some of these early goals and has, at least, made EVs popular as a product.

Musk’s engineering focus has helped drive the company to focus on creating excellent products, and those that consumers will buy. The company’s market capitalization has floated at levels untouched by the rest of the auto industry, and Tesla has become ubiquitous as an EV brand.

Denning points to a handful of engineering choices that have made Tesla successful, including Musk’s focuses on radically simplifying processes, increasing design modularity to make part- or software-swapping seamless and a deep sense of urgency in its growing its products.

Additionally, Tesla’s use of artificial intelligence throughout the company helps employees make smart decisions about how to serve the company's mission. This, Denning explains, helps result in an increasingly streamlined information flow and minimized bureaucracy.

Simplifying practices, parts and software are all major parts of Musk’s unique management style. Denning terms this approach “the power of less,” pointing to the CEO’s desires to clarify specific requirements in a task, reduce the lines of code in a given software, drop the number of car parts needed for manufacturing and keep teams as small as possible.

Below are the nine steps Denning says Tesla took to realize deep purpose, and you can read his full description of each of them here.