How Elon Musk Uses Failure As A Strategy For Developing An Innovative Culture

Recently, Elon Musk’s mom revealed her reaction when the $200 million SpaceX rocket blew up. She couldn’t imagine how Elon felt… and assumed he’d feel crushed.

But to her surprise, he wasn’t paralyzed or distraught. Elon saw it as a success. Rather than get mad at his employees, or curl up in a ball and hide from the world, his immediate reaction was to ask, “What went wrong?” and “What do we do differently next time?”

Repeatedly, stories in the news show Musk’s emotional intelligence when it comes to failures. His tendency to always hold himself accountable and never let failure keep him down is one reason he continues to lead an innovative culture that keeps him at the forefront, no matter the industry he’s playing in.

Today he is a billionaire, but when starting out he only had his brain and his vision. He’s revolutionized every industry he’s touched…e-cash with Paypal, electric cars with Tesla, space technology with SpaceX, and energy with SolarCity.

Here are six lessons you can pick up from Elon on how you can create a fail-forward culture that keeps your MSP innovative and at the leading edge of your market.

Encourage ALL employees to speak up. Musk is obsessive about sweating every detail–and he encourages his employees to do so as well. Before every launch, Musk emails every employee giving them permission to speak up and blow the whistle if they know of a problem. He tells them to call him on his cell phone or email him immediately. Musk goes one step further, saying that the whistleblower will be protected, even if they go over their manager’s head.

Do something scary instead of staying in your comfort zone.  In 2015, the unmanned Falcon 9 rocket, headed for the International Space Station with food and supplies, blew up two minutes into the flight. It was the first time in seven years SpaceX had seen a failure. Musk told the Washington Post he “feared the company’s winning streak has perhaps softened it” and that “the company as a whole maybe became a little complacent.” “The vast majority of the people at the company today have only ever seen success,” Musk said. “You don’t fear failure quite as much.” When you get too comfortable, you avoid doing things that are unfamiliar, stick to things you know, and stop learning. If you want to stay ahead of the curve, encourage your team to move out of their comfort zone with a healthy amount of fear. This will help keep your team sharp, checking and triple checking their work while also making sure your business doesn’t get stuck.

Keep your team focused on what matters. Minutes after SpaceX declared success, the SpaceX starship exploded and was tossed into the air, slamming back into the ground in fiery flames. Musk immediately tweeted: “Starship 10 landed in one piece! RIP SN10, honorable discharge.” Then he added: “SpaceX team is doing great work! One day, the true measure of success will be that Starship flights are commonplace.”

It’d be easy to focus on the explosion, but Musk knows that won’t help him accomplish the extraordinary thing he is trying to do.He understands that his team invested a massive effort into creating this rocket and that, when successful, it will be a huge win for him and SpaceX. As the leader of your company, it’s your job  to see the victory in failures and make sure your team is focused on that victory too.

Be prepared for when things go wrong. In 2016, Musk had a rough year. His Tesla stock dropped nearly 15%, his SolarCity shares were down $42 million and General Motors beat Tesla to market with a product at a price point for the mass market. Tesla was experiencing fallout from the first passenger death related to its self-driving vehicle failure and then a SpaceX rocket blew up. Musk built his companies to withstand short-term concerns while driving forward with his vision. It’s not uncommon to see Musk tease big product announcements or bold news when things are going bad to change the conversation. As a leader, you must be prepared to face crises while also continuing to provide vision that keeps your team excited and looking forward.

Figure out what went wrong and get back on track. Musk focuses on the data and what they can learn to make improvements. After one of the SpaceX crashes, the website said:”With a test such as this, success is not measured by completion of specific objectives but rather how much we can learn, which will inform and improve the probability of success in the future as SpaceX rapidly advances the development of Starship.” Find out why an effort fails so you can correct it. Then be transparent with your team about what went wrong and use it to motivate them to keep driving forward.

Celebrate the win. Musk publicly celebrates wins–in the media, on his social media platforms, and in company literature. He tweeted:”Fuel header tank pressure was low during landing burn, causing touchdown velocity to be high & RUD, but we got all the data we needed! Congrats SpaceX team hell yeah!!” Then he tweeted, “Mars, here we come!”

SpaceX’s website reiterated Musk’s message describing the crash as “the high-velocity touchdown resulted in a “hard (and exciting!) landing.” The spaceship still “successfully ascended, transitioned propellant and performed its landing flip maneuver… Congratulations to the entire Starship and SpaceX teams on today’s test!”

Find ways to acknowledge your teams wins, especially when they’ve worked hard on something that fails.

Apply the knowledge gained from the experience.  Musk does not see failure as the opposite of success, he sees it as a part of it. In 2008, Tesla was struggling and nearly collapsed during the financial crisis. Musk applied what he learned, persevered, and kept the company going on personal loans from friends. Tesla emerged as one of the most successful niche car companies producing electric cars and has used that experience to help keep his other ventures alive.

While running an MSP, you will no doubt run into problems. However, you must not let challenges or failures discourage you. Elon Musk has failed many times during his life, yet those failures are what have made him successful today. In Musk’s own words, “Failure is an option here. If things are not failing, you are not innovating enough.”

Embrace failure, learn from it and follow Musk’s lead on how to turn your failures into future success. When you do, you’ll become one of the most innovative MSPs and the leader in your market.



Verne Harnish

Verne Harnish is the Founder and CEO of Scaling Up, a global executive education and coaching company with over 200 partners on six continents. He is also the founder of the world-renowned Entrepreneurs’ Organization (EO), with over 16,000 members worldwide, and chaired for fifteen years EO’s premiere CEO program held at MIT, a program in which he still teaches today.


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