My Day at Tesla: What I Learned
It isn’t every day that an industry analyst gets to go behind the scenes of an iconic and controversial company, but this week I had that chance. Invited by the HR and corporate learning team, I spent a day at Tesla. I went for the plant tour, wandered around the corporate offices, and spent a few hours with the company’s young, ambitious, and forward thinking training team.
First, let me say up front I am not in the habit of writing “puff pieces” on companies I visit. In fact I try to keep most of my client work confidential, because they usually tell me lots of little secrets about what they’re working on fixing. In this case, however, I walked away with such a positive feeling, I wanted to share what I learned, only in the interest of helping other HR and business leaders understand the role of culture.
New News. This week Tesla announced they reached their production goal of 5,000 Model 3’s produced per week. The culture pays off.
The Plant Tour
If you haven’t been on a Tesla plant tour, you should go. All Tesla cars in the US are manufactured in Fremont, at the enormous plant which used to be owned by GM and Toyota (Nummi). I actually visited the plant in the 1980s when it was the NUMMI plant (New United Motor Manufacturing) and I remember being impressed by the enormously long production lines, the ability for workers to stop the plant for quality defects, and the relatively clean and well organized way it seemed to be managed.
Now that this enormous facility is owned by Tesla, it feels totally transformed. The plant is now built in a series of modular stations (the metal stamping area, the motor assembly area, etc) and a set of mini-production lines for the Model S, Model X, and Model 3. The Model 3 line is humming along and I could see from the level of energy in the building that the company is working hard to increase production.
The entire plant is painted in white, giving the place a clean and open feeling – and the many employees I saw walking, driving, and working were energetic, friendly, and focused. The walls are filled with mottos about Quality, Craftsmanship, Innovation, and Safety and during my hour tour I saw everyone wearing their safety glasses, signaling their turns, and following safety rules in any way I could determine.
The robots are amazing and impressive, and while I’m no expert on production robotics, these big red machines appear to be in perfect repair, are operating well, and are being carefully managed and monitored by operators. All the robots are enclosed in safety cages and there are many digital dashboards monitoring production, quality, and other metrics.
I know this tour is designed to impress prospective customers and investors, and it works. The tour guide tells lots of stories about how Tesla acquired the plant, how the company acquired one of the world’s largest stamping machines from Detroit, and how the plant is constantly reconfigured to improve efficiency. One funny story he told was about the painting process: apparently in order to enter the paint area, you have to wear Tesla-designed cologne, use Tesla-designed shampoo, and wear Tesla-designed clothing to avoid any impurities in the process. This may or may not be standard for auto manufacturers, but it impressed me.
As an HR analyst who studies culture and management, I was impressed by the spirit, energy, and knowledge of the various people in sales, service, and PR who helped with the tour. There was a large group from China in my tour and they asked lots of questions, and our tour guides were very knowledgable about the company, products, and history.
But let’s be honest, the plant tour is a giant marketing effort, so all this is to be expected I suppose. I did walk away fairly confident that Tesla will figure out how to ramp up its manufacturing of the Model 3, even though I’m not in a position to recommend the stock or any financial results.
The L&D Organization
My main reason to visit was to meet with the L&D leadership team. As I had lunch with some of the leaders I realized there had been a lot of turnover. While nobody seemed upset about it, it was clear from the team that the pace of work at Tesla does wear on people, so many people work there for 4 or 5 years and then move onto other jobs. This did not bother or surprise me: I remember my days at fast-growing Sybase where people were getting moved and promoted on a constant basis. Fast-growing companies are exciting and very rewarding places to work, but they can be stressful and not everyone likes it for a long time.
It’s clear from our discussion that Tesla’s culture has three big attributes.
First, people are given a lot of responsibility and trust, so they grow in place. All the L&D leaders I met were relatively young, very smart, and were designing solutions that often take years to build in older, larger companies. Most of them were in large roles which they rapidly grew into, and they were all very interested in learning how to do things better.
Second, there is a huge focus on business alignment in this team. In all my research in L&D over the years, the single biggest factor of success for a training department (I just talked with the CLO of Staples about this today) is to make sure your energy, investments, and program designs are developed in direct partnership with line leaders and teams. Tesla’s L&D team is organized around many of the big talent groups (sales, service, leadership, manufacturing) and their training programs are being developed in partnership with line leaders.
I wont disclose any details, but one of the stories we discussed was Tesla’s journey through sales training as the company radically changed its sales channels. Suffice it to say, as Tesla is building a more integrated sales model (remember the company sells cars, solar power equipment, and highly scalable energy systems), the training team is working closely with sales leadership to identify sales blockers and train people to improve productivity.
For example, they told me that in the early days of the company sales people simply took people on test rides and they then came back and signed orders. Later, as the company did more analysis on this process they realized that there were an awful lot of test drives and the ratio of test drives to orders was not what they wanted. So the company built a new set of practices for customer qualification and customer interviews, which is of course well known in most sales organizations. This isn’t “rocket science” but it shows the company is scrappy, a fast-learner, and willing to change as needed.
The third thing I noticed is that Tesla does operate with very broad spans of control, so most of the people in L&D (and I would imagine other places) have lots of leeway to do their jobs as they see fit. This empowered culture is very important in a fast-growing company, and it only works when the CEO and other business leaders clearly communicate goals, values, and cultural standards. We discussed the role that Elon Musk plays in the company and it’s clear that he has an outsized impact on everyone there, including creating an incredible sense of inspiration, mission, and focus on hard work.
I’ve worked for fast-growing startups with brilliant CEOs before (I suppose I was kind of one myself) and they can create an incredible culture if they communicate well. My day at Tesla left me with a sense that this company is on a mission and that everyone there, regardless of how hard they work and how frustrating the pace may be, is on the mission to revolutionize the way the world consumes energy. (And build very hot cars.)
Other Things I Learned
I am a big believer that experience and tenure is incredibly important in business. While we do have a very strong “youth culture” in Silicon Valley, lots of research shows that tenured people, staff who have been around the block so to speak, bring tremendous value to an organization. At Tesla, where the organization is growing very fast (over 40,000 employees now), there are many young people and probably fewer tenured employees than most. So as I listened to the L&D department describe all their programs, talent management practices, and leadership practices, I expected a lot of youthful ideas.
Actually I found the opposite. This particular group of people is incredibly smart, very plugged in, and willing to learn and work very hard on every talent program we discussed. Tesla’s “Performance Acceleration” program, its continuous performance management program, is very modern and up to date and appears to be going down the same learning path of other innovators in that space. The company realizes they need a bigger focus on talent mobility and career management, and was asking lots of questions about talent reviews and succession. So the team is learning fast, listening to others, and trying lots of things.
One of the problems many Silicon Valley companies have is that they really believe they can “invent everything.” Yes of course you can do this, but it really helps to see what others have invented so you learn from their experience. The Tesla team is moving so fast (the company is going through a series of reorganizations) that I don’t believe they have had the time to visit other companies and benchmark themselves as much as they could. We talked about this a bit and I would guess this will come next in their evolution.
We talked a lot about learning technology, and as with most fast-growing companies, Tesla is struggling to make all their systems do what they want. The company’s LMS is a bit behind in its functionality for their needs, so they are pushing the vendor to move faster. Their implementation of their Learning Experience Platform has not gone well, primarily because they didn’t implement an integration to Workday and the sponsor of the product left the company. And there appear to be a lot of questions about what tools to standardize on, how to measure ROI (everyone still talks about this, I wish they would read my book), and many of the other issues of “what to centralize” vs. “what to distribute.”
But this all said, the L&D team at Tesla is small (200 people for a company of 40,000), it’s working very hard, and I think they will grow quickly in time.
Bottom Line: Culture Can Outpace Experience
The bottom line I left with is simply this. Every L&D department has its strengths and weaknesses, and some have lots of seniority and tenure and some do not. In this world of fast-changing skills and companies that are growing quickly every day, a culture of innovation, learning, and collaboration can be as important as tenure and experience. The Tesla team appears to be working closely together, they are experimenting with lots of new ideas, and they are very well aligned with the business. Everyone I met shared a collective vision: we are building something important, something that will make the future better.
There is a big message here. Companies like Tesla can do what seems impossible by leveraging their culture. It’s thick and powerful, and I walked away excited and optimistic about the company, even wondering if it may be time for me to buy a Tesla of my own.