The stock value of leadership

When the state possessed the Way, the leader was wise; when the state lost the Way, the leader was stupid.

Confucius

Australia now has its sixth Prime Minister in ten years (if you include Rudd V1 & 2). Through 2018 Malcom Turnbull has held on to his leadership by a thread, having failed to hold back a growing tide of discontent in his party room.

Contrast this with Elon Musk who has managed to hold on to the leadership of Tesla Inc. despite repeated production setbacks and a series of public gaffes including an interview with the New York Times during which he conceded the strain of his job is affecting his health.

What lessons can be drawn from these leaders in 2018? And why has one failed while the other prevails?

Benziga.com has estimated the value of Elon Musk’s personal brand to his public companies at US$127b (AU$173b). Musk has built an empire on audacious goals articulated as helping humanity and the planet. His is the ‘impossible is nothing’ vision — the American dream par excellence. When Musk speaks Americans hear echoes of Henry Ford, Howard Hughes, Bill Gates, Steve Jobs, et al. Because Musk has never wavered from his vision, the market is prepared to ride out his personal and corporate challenges. The market wants to believe. 

Australians also want to believe — in leaders who are prepared to courageously stand behind their vision. But, as cutting down ‘tall poppies’ is a national pastime, our visionaries and high achievers are loathe to build the public profiles necessary to articulate the vision.  Nominally a meritocracy, Australia is, above all, fiercely egalitarian.  We don’t automatically respect titles and we’re often suspicious of those among us who have achieved personal success.   

Yet, having a leader who has a strong public profile can help an organisation ride through turmoil. By putting himself at the centre of Tesla’s recent challenges, Musk has shielded members of his board and executive team from criticism. The strength of his personal brand acts as a reputational buffer for the business.  

Compare that with Turnbull who has consciously allowed his personal brand value to slowly erode as he sacrificed his vision for Australia in the name of party room consensus. 

Musk and Turnbull’s recent challenges tell us three important principles about leadership:

1. Never compromise core beliefs 

If it’s necessary for the leader to compromise his/her core beliefs in order to lead the organisation, then this is a cultural misalignment which is unlikely to be reconciled.  Strong leadership can never be achieved at the expense of core beliefs. This is as true for CEOs and corporations as it is for prime ministers.

2. Leaders must be the embodiment of the organisation they lead

There is great value in corporate leaders building and maintaining a strong public profile. It helps position the organisation for success and can shield the organisation in times of crisis.

3. Authenticity is the key

Credibility might get you into the leadership chair but it's authenticity that will earn you the credit to achieve your vision. Strong and effective leadership communication is as much about being ‘on vision’ as it is about being 'on message'. This means giving the leader the ability to communicate from the heart what they truly believe in. Fail the authenticity test and your credibility as a leader will soon follow.

The CVs of Malcolm Turnbull and Elon Musk are both impressive but only Musk has been true to his own personal brand.
Graduated from University of Sydney with double degree (Bachelor of Arts and a Bachelor of Laws). At the University of Sydney he served as board director of the University of Sydney Union. Whilst studying he worked part-time as a political journalist for Nation Review, Radio 2SM and Channel 9. Completed a Bachelor of Civil Law at Brasenose College, Oxford as a Rhodes Scholar. While at Oxford, he worked for The Sunday Times and contributed to newspapers and magazines in the US and Australia. After graduating from Oxford, Turnbull returned to Australia and began work as a barrister. Moved in-house as General Counsel and secretary for Australian Consolidated Press Holdings Group from 1983-1985. In 1986 established law firm Turnbull McWilliam and successfully stopped the UK Government from suppressing the Australian publication of the book Spycatcher, written by former MI5 agent Peter Wright. Established investment banking firm, Whitlam Turnbull & Co Ltd. Left the firm in 1997 to become managing director of Goldman Sachs Australia, eventually becoming a partner in Goldman Sachs and Co. In 1994 he purchased a stake in the internet service provider Ozemail for $500,000 before selling his stake in 1999, just months before the dot com bubble bursts, for $57 million. In 1993 he is appointed by Prime Minister Paul Keating as Chair of the Republic Advisory Committee In 2004 entered parliament. Selected as Shadow Treasurer in 2007 and became leader of the opposition in 2008. 2015: became Prime Minister of Australia after successfully challenging Tony Abbott.	At age 12 he built a video game called Blaster before selling the source code for $US500. Completed a double degree at the University of Pennsylvania (BS Physics and BA Economics).  Created the start-up Zip2 before selling it to Compaq for US$302m. Created X.com which later becomes PayPal which he sold to eBay in 2002 for US$1.5b. Founded SpaceX in 2002. Invested in Tesla in 2004. In 2006 Musk became Chairman of SolarCity, now the largest provider of solar power in the US. In 2008 SpaceX won a US$1.6 contract to transport cargo to the International Space Station. Became CEO of Tesla in 2008. Took Tesla public in 2010. In 2012 SpaceX became the first commercial company to successfully offloads cargo to the ISS. Also in 2012 Tesla began delivery of the all-electric Model 2. In 2013 Musk unveiled first concepts of the Hyperloop.  In 2016 commenced construction of the Gigafactory (when complete it will have the largest footprint of any building in the world).