Business/Economy

What local employers can learn from Elon Musk’s Twitter crisis

When multibillionaire and Tesla Motors CEO Elon Musk acquired Twitter on Oct. 27, he assumed leadership of a company that hadn’t earned a profit in eight of its 10 years.

By Nov. 4, eight days later, 1.3 million users had 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 pay.

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 takeaway: 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 Nov. 11, Musk warned Twitter employees that the company might not survive the upcoming economic downturn if it 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.

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Don’t ask employees for loyalty unless you’ve first delivered

Musk’s problematic conversation with Steven King about charging $20 for verification — from which he backed down, halting his Twitter’s Blue Verified new venture — and his impulsive brainstorming of ideas about Twitter publicly 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 Nov. 16 to decide by Nov. 17 if they would 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 takeaway: Don’t ask employees to work harder unless you first inspire them.

Who leads?

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 that 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. In 2018, Musk and Tesla paid $20 million in fines over Musk’s allegedly misleading tweets concerning funding. FTC violations can take a huge bite out of a company’s bottom line; as an example, Facebook paid $5 billion for privacy violations.

The takeaway: The leader’s character and ability and how others perceive it are key.

Tarnished brand

Within hours after Musk took over Twitter, anonymous trolls spewed tweets full of Nazi memes, and 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%. Verified but fake accounts flooded Twitter, spreading misinformation, duping other users and eroding Twitter’s perceived value. The takeaway: Don’t allow others to destroy your reputation.

The final takeaway: Leadership can turn a company around -- or take it down.

Lynne Curry | Alaska Workplace

Lynne Curry writes a weekly column on workplace issues. She is author of “Navigating Conflict,” “Managing for Accountability,” “Solutions” and “Beating the Workplace Bully,” and workplacecoachblog.com. Curry is president of Communication Works Inc. Send questions to her at workplacecoachblog.com/ask-a-coach or follow her on Twitter @lynnecurry10.

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