These Leadership Blunders From Jeff Bezos and Elon Musk Should Be a Warning to All Entrepreneurs
Instead of shaking your head at the missteps of Jeff Bezos and Elon Musk, learn from the mistakes of these household names in entrepreneurship.
In the span of a month, Jeff Bezos stepped down from Amazon and literally rocketed into space. Upon touchdown, he thanked the ecommerce giant's customers and employees for footing the bill, massively misreading the room. This moment of not seeing how his actions were perceived — and how they reflected on the company — didn't land well.
Meanwhile, Tesla CEO Elon Musk has entirely missed the mark in how he treats the company's employees, presenting a vastly different picture of his leadership to the outside world. He's reportedly directed Tesla employees to scour social media for complaints about him and ask the posters to delete them — a request that feels inappropriate coming from one of the most revered CEOs of our time.
These instances are bad for these men's reputations, but they're also indicative of a bigger problem: The companies they lead are increasingly getting a reputation for poor treatment of employees. One worker reported an Amazon company culture that left corporate employees crying at their desks, and evidence shows that workers in the massive fulfillment warehouses have it far worse. Research by the Strategic Organizing Center found that 5.9 percent of Amazon's warehouse employees suffered serious injuries in 2020 that forced them to miss work or be put on light duty — the "injured reserve" of warehouse work. To put that figure into perspective, it's 80 percent higher than the rate of all other employers in the warehousing industry.
Tesla has its fair share of issues, too. According to a former employee: "Some of the managers would really push this creepy cult around Elon Musk. One of them would point to the cameras in the factory and say, "Elon's watching' or "He can read your emails.' The desired goal was to speed the f**k up. We're worried that if we're not working hard enough, this little tyrant is going to come over."
An unsustainable approach
There's no denying that Amazon and Tesla are incredibly successful companies, but their empires are more tenuous than they seem. Despite what many sources claim, a company can't survive on an enigmatic CEO alone. It takes high-quality and passionate talent for an organization to innovate and out-compete in the marketplace. Considering reports that Amazon and Tesla are gaining reputations for mistreating employees, they'll likely struggle to attract that talent and retain that caliber of employee.
The New York Times reported hourly employee turnover rates of three percent per week at Amazon, which amounts to about 150 percent annually — nearly twice the rate of the broader retail and logistics industry. For Tesla, retention problems exist even at the highest levels. According to an investigation by Yahoo Finance, at least 88 executives left the company between January 2018 and February 2019, and the article explains that "the list would be significantly longer if we included managers."
Amazon and Tesla might act like there's no reason to worry; there will always be more employees eager to work for them. But there will always be other employers, too. Even the biggest companies in the world can't run from a bad reputation. Leaders everywhere should take to heart the following three lessons:
1. Walk the walk and put people first
Amazon and Tesla employees have been transparent about toxicity in their workplaces, but the companies haven't responded in a way that acknowledges or validates their concerns. Even as Amazon outwardly denied accounts of employees urinating in bottles because of time constraints, internal documents uncovered by the Intercept showed that leadership was aware of the issue. This isn't the way to put people first.
According to Laurence Turner, research and policy officer for GMB Union in the U.K., "Amazon's new CEO has a historic opportunity to draw a line under Jeff Bezos's intense ideological hostility to unions, and instead make improving the lot of workers a top priority." Companies in this position should prioritize real internal organizational change to create a better employee experience and a stronger culture overall.
2. Be honest, even when honesty is harsh
Some jobs ask more of employees than others. That will always be true, but it doesn't have to be a bad thing. The key for organizations is to be mindful of the company narrative surrounding culture instead of painting a false picture that doesn't reflect reality. Authenticity is crucial. Amazon would be better off going all-in and building a brand reputation that justifies and contextualizes well-documented harsh realities to share a company narrative that is more honest while giving people more reason to understand, appreciate and respect the company.
One Wall Street Journal article called Amazon "America's CEO Factory." Clearly, the company is a place where some of the best and the brightest rub shoulders and build careers. By highlighting this competitive culture and focusing on the formative impact on employees' career trajectories, for example, Amazon could own some of its demanding nature as a differentiator that will set its employees apart.
3. Align employee expectations and experience
Another advantage of opting for authenticity? Instead of getting a rude awakening upon starting a job, employees get the experiences they expect. If a young professional is looking for a trial-by-fire experience that could help them on the path to the C-suite, for instance, Tesla might be the perfect fit. Tesla could strategically center its employer brand story around some of the harsh realities of working there, which would help it attract a certain type of talent ready to endure and thrive under those conditions. Brands should never be built on promises that are incongruent with the employee experience — or based on the whims of an eccentric-genius leader who is prone to erratic management behavior and naive talent management assumptions.
Salesforce, which refers to its employees as its Ohana — the Hawaiian term for family or community — might promise and deliver a better, more fitting experience for others. The company markets itself as "a deep-seated support system." According to its website, employees "collaborate, take care of one another, have fun together and work to leave the world a better place."
By and large, the software company lives up to these claims. Salesforce worked to hire laid-off friends and family of its employees during the pandemic, and data from Great Place to Work indicates that 90% of employees would recommend working for the company. However, if a prospect accepted a job with Salesforce based on this promise and found it more like the Tesla company culture, they wouldn't be as apt to stick around. Alignment between the promise and reality of your employee experience is hugely important, and it can be the difference between a successful company and one that struggles to maintain momentum.
Amazon and Tesla are far from the first companies to build reputations that are not fully representative of reality. Although the harsh standards they impose might be part of their success, their reputations could also bring about the fall of their empires if left unchecked (or at least slow it down a little in Amazon's case)!
For leaders in all industries, ensuring authenticity and honesty is how you begin to build your company reputation and employer brand. Delivering an employee experience that is supportive and reflective of your promises — as well as your intentions and aspirations — is absolutely critical to your sustained success.
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