Last week, Tesla CEO Elon Musk made headlines when he insulted two Wall Street analysts on what many have described as one of the strangest earnings calls ever.

It all began when Toni Sacconaghi, an analyst covering Tesla for an investment management company asked about Tesla's need to raise additional money from investors.

"So where specifically will you be in terms of capital requirements?" he asked. 

"Excuse me," Mr. Musk responded. "Next. Boring bonehead questions are not cool. Next?"

Another analyst then asked a question about the Model 3, the mass-market car that many see as holding the key to Tesla's future success.

"We're going to go to YouTube," Mr. Musk responded. "Sorry. These questions are so dry. They're killing me." (Musk then turned the call over to Galileo Russell, the host of a financial talk show on YouTube.)

The next day, Musk defended his remarks in a series of tweets (which I've collected together):

"The 2 questioners I ignored on the Q1 call are sell-side analysts who represent a short seller thesis, not investors. The reason the Bernstein question about CapEx was boneheaded was that it had already been answered in the headline of the Q1 newsletter he received beforehand, along with details in the body of the letter...Reason RBC question about Model 3 demand is absurd is that Tesla has roughly half a million reservations, despite no advertising & no cars in showrooms. Even after reaching 5k/week production, it would take 2 years just to satisfy existing demand even if new sales dropped to 0."

On the surface, this seems like a reasonable explanation. But Musk forgot a simple, undeniable fact:

Those questions weren't just for the benefit of two financial analysts. 

They were for everyone in the world who is interested in Tesla.

Musk himself viewed his handling of the situation as a mistake, as revealed by another tweet just a few minutes later. After a fellow tweeter suggested that he just block such questioners ahead of time, so he never has to hear such questions live, Musk responded with the following:

"True. And once they were on the call, I should have answered their questions live. It was foolish of me to ignore them."

By contemptuously dismissing the analysts' questions, Musk missed a golden opportunity. Not to inform the analysts, or Tesla's critics, many of whom have no interest in seeing Tesla succeed. Neither will Musk's response have much effect on his die-hard fans, to whom their fearless leader can do no wrong.

Rather, Musk missed the chance to show the others--potential investors (and even customers) who are still trying to figure out what kind of company Tesla's shaping up to be--that he sees the big picture and knows what he's doing. Musk tried to do that the next day...but the damage had already been done. For many, Musk came off as arrogant, disrespectful, and painfully dismissive.

We've all been in situations like this, where we let our emotions get the best of us and handle a situation in a way that we later regret.

What can help?

Emotional intelligence is the ability to identify and understand both your own emotions and the emotions of others, and to use that information to inform and guide behavior.

Over 20 years ago, Apple founder and former CEO Steve Jobs was faced with a similar situation. In 1997, Jobs had just returned to Apple. He was answering questions for developers at Apple's Worldwide Developers Conference when one audience member posed some critical questions.

The questioner accuses Jobs of ignorance, after which he gives an example of what he means. He then presses Jobs to tell the audience what exactly he's been doing for the past seven years.

Unlike Musk, Jobs realized he wasn't just answering a single developer. He knew he was being observed by several hundred developers, Apple employees, and anyone who would watch the recording of the conference.

How would Jobs respond?

1. He paused.

Jobs's initial response is no response at all.

Instead, he pauses, sits in silence, and thinks.

It may seem like an eternity, but in reality it's about 10 seconds before Jobs speaks again. "You know," he begins his reply. "You can please some of the people some of the time, but ... "

He then pauses for another eight seconds, reflecting on both the criticism and the question.

The pause is valuable because it allows you to get your emotions under control and respond in a way that's consistent with your goals and values. By pausing, Jobs gives himself the time he needs to compose himself and come back with a thoughtful and remarkable response.

2. He emphasized the big picture.

Under Jobs, Apple's goals were bold. He tried to get the audience to see things from his perspective, namely, how current decisions would fit into "a cohesive, larger vision, that's going to allow you to sell eight billion dollars, 10 billion dollars of product a year?"

Often, what looks good in the short-term is not in the best interests of your company, or even your career.

If you find yourself in an emotionally charged moment, step back and think forward to the consequences of your actions: How will this decision affect you in a month? A year? Ten years?

Doing so can help you achieve clarity of mind and make better decisions.

Musk has demonstrated remarkable emotional intelligence through the years, especially in his ability to communicate with employees and customers. I think he'll learn from this experience.

And that's part of what developing EQ is all about--learning from your mistakes, and striving to make emotions work for you, instead of against you. 

Published on: May 7, 2018
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