The Big Takeaway After Elon Musk Fumbled a Major Tesla Goal
Tesla last week reported that it is behind on its production goals for the Model 3, it’s more affordable $35,000 vehicle. When Model 3 production began during the summer, CEO Elon Musk shared on Twitter that he anticipated that by September, the company would make more than 1,500 of the cars, aiming to make 20,000 Model 3 cars per month by December.
Handover party for first 30 customer Model 3's on the 28th! Production grows exponentially, so Aug should be 100 cars and Sept above 1500.— Elon Musk (@elonmusk) July 3, 2017
But the lofty goal has not been met. According to its most recent investor letter, the company has made 260 cars in the third quarter. If you ordered a Model 3 today, you could expect the delivery sometime in the middle of 2018. The company says that while nothing was fundamentally wrong with the supply chain, it owed the slower than expected manufacturing to “production bottlenecks” and some systems not working as fast as they would have hoped.
And Tesla isn’t the only company who has had some trouble meeting its goals lately. While Nike was aiming to bring in annual sales of $50 billion by 2020, analysts are now predicting that it will only reach $42.5 billion in that time. In 2015, Target said that it was working toward a 40 percent growth of its digital sales, but instead hit 31 percent in 2015 and 27 percent in 2016.
So how do you account for these gaps between ambition and business reality? The Economist Intelligence Unit and strategy consultant the Brightline Initiative recently polled a group of 500 senior executives at companies that have annual revenues of $1 billion or more. Their study found that even the most successful business regularly find themselves in these types of situations.
Ninety percent of executives said that they don’t meet their strategic goals because they do not implement them well. Fifty-three percent said that under delivering to its customer base leaves them open to competitors filling that void. And 59 percent report that their businesses “often struggle to bridge the gap between strategy development and its practical, day-to-day implementation.”
So as your business grows, what can you do to make sure it doesn’t fall into these traps? Communication is key.
The researchers recommend that as you plan and implement your strategy, remember that the teams responsible for planning, design and execution should also be in constant contact with one another. Additionally, it’s important to remember not to make your goals in a vacuum. You can’t just watch the market and hope that will be enough to inform these decisions.
“Outside stakeholders, including consumers and suppliers, can and should be harnessed as active partners in strategy delivery,” the researchers wrote.
Lastly, make sure that there is a way to move quickly and efficiently if something does go wrong. “Discuss challenges openly and adjust plans as needed. Learn to reward sensible failure, or at least accept it as valuable input,” the researchers advise. “At the same time, keep an end-goal in sight, so that your organization isn’t knocked off track by overreacting to short-term developments.”