Watching Elon Musk’s latest showman-like demonstration of a battery swap of the gorgeous Tesla Model S had me thinking, as Yogi Berra put it, “it’s déjà vu all over again.” I’ve seen this movie before – literally. Because, as the former head of global communications and policy for Better Place, I produced the last one.
Four years ago, Shai Agassi, a serial entrepreneur who attempted to make mass market electric cars affordable, orchestrated a similar show in Yokohama, Japan, where Better Place demonstrated the world’s “first” battery swap of an electric car.
Both are slickly produced events as part of a strategic communications plan to drive momentum. For Better Place, it worked well – so well that the company – a few months after the demo – was able to raise a second round of equity financing of $350 million at a valuation of $1.25 billion.
In other words, the power of strategic communications drives more than just brand and reputation. It drives corporate valuation, particularly for innovative companies including Better Place and Tesla. It was a card that we frequently played at Better Place to drive momentum behind the business. And sadly for Better Place, the company ran out of cards to play, time and money to keep the momentum going.
The challenge, however, for any head of global communications of an innovative company is keeping the story six to nine months ahead of the business. You want to surf the tube for as long as you can and avoid getting pulled under.
With Tesla, it again feels like déjà vu all over again. I recently learned that the newest head of communications at Tesla stepped down a few weeks ago after having only been there for a few months. According to my count, that makes at least five heads of communications in the company’s 10 year history.
Just a few years ago, Tesla – and Musk personally – took a bruising amount of body blows from the media.
Between 2008 and 2009, Musk and former Tesla CEO Martin Eberhard waged a very public battle over who deserved the blame for Tesla’s then woes. I can still recall this Fortune cover story, which was an epic kiss and tell of the behind-the-scenes drama of Tesla.
That was then and this is now, right?
Look at the number of “announcements” – usually made by Musk via Twitter – from Tesla this year alone: first profitable quarter, loan repayment to the U.S. government, validation of the Model S by Consumer Reports, nationwide SuperCharger network, guarantee of the resale value of the Model S, and now, the battery pack swap demo.
Even Musk’s very public battle with John Broder of The New York Times did little to slow the rise in the share price, and if anything, it helped the share price by chasing out the short sellers.
But haven’t we seen this movie before? Enormous confidence coupled with heightened expectations fueled by a movement of rapid enthusiasts with a cult-like fervor for the company and the CEO. Then the next scene usually is an epic collapse of confidence and good will followed by the departure of the CEO and head of communications.
In a 2012 research report by executive search firm, Korn/Ferry, they found that, “In the aftermath of the recession and financial crisis (as well as an era of shorter tenures of CEOs), there appears to have been significant turnover at the top of communications departments: more than half of the respondents (56 percent) have been in their role for four years or less.”
If I were advising Musk and Tesla right now, I’d offer these words of advice:
- What goes up can come down – and quickly. Dial back on the news and milestones for the rest of the year as you can ride the momentum easily on execution.
- When delays occur or when the strategy changes, correct the public record in real-time. Tesla has a number of very public commitments out there already, which are markers for the media, equity analysts and its customers to measure the company’s success or failure.
- Stop body checking the media whether it’s The New York Times, the BBC or others. That’s the job of the communications team. The CEO needs to be manically focused on leading and running the company, not on PR.
- Hire your next head of communications under the assumption that the next one will be the last one. Take the time to find a trusted consigliere so they can run communications and you can run the company so that Tesla isn’t the next one pulled under.
Image by pestoverde.