I used to view Tesla CEO Elon musk as a master communicator. I've written numerous times about Musk's brilliant messaging, like this email that was a master class in emotional intelligence, or this genius tweet that showed what makes Tesla different from everyone else.

It's that emotional authenticity, that ability to keep things real, that has helped make Elon so successful.

But lately, it seems that strength has become a weakness.

Case in point is Musk's latest battle with the Securities and Exchange Commission (SEC).

It all began with the following tweet, which Musk sent a week ago:

"Tesla made 0 cars in 2011, but will make around 500k in 2019"

A few hours later, Musk sent out a second, corrective tweet:

"Meant to say annualized production rate at end of 2019 probably around 500k, ie 10k cars/week. Deliveries for year still estimated to be about 400k."

On Monday, the SEC asked a federal judge to hold Musk in contempt for violating a settlement deal from last year. That deal required Musk seek approval from a board committee prior to sharing any social media post that contained information that was "material" to shareholders. 

"Although Musk corrected his mistake, regulators scolded Tesla's billionaire CEO because he 'once again published inaccurate and material information about Tesla to his over 24 million Twitter followers,'" CNN reported yesterday.

Musk didn't take kindly to the SEC's admonition. Responding on Twitter to a claim that it was actually the SEC's complaint that moved the market (and not Musk's mistaken tweet), Musk stated that "something is broken with SEC oversight."

A federal judge gave Musk until March 11 to explain why he shouldn't be held in contempt, reported CNN.

Watching these actions from the sideline, I can't help but see the parallels between another tech company's battle with regulators in the recent past: Uber.

And more importantly, the lessons Uber learned from it all.

How Uber finally moved forward

Much like Tesla, Uber has been attempting to disrupt a legacy industry over the past several years. But as Uber continued to grow, it ran into serious roadblocks with regulators. 

Uber policy was basically to ignore regulations the company felt didn't apply. Or, to ram right through them.

But that changed once CEO Travis Kalanick was asked to step down by Uber's board, and was replaced by new CEO Dara Khosrowshahi. 

For example, shortly after Khosrowshahi took over in 2017, government officials in London announced that they would not be renewing Uber's license to operate in the city. 

While Uber did decide to appeal, the company chose a kindler, gentler approach--which included working with regulators and established processes (instead of flouting them). 

Along with these actions, Khosrowshahi sent an amazing email to Uber employees. It included the following message:

"While the impulse may be to say that this is unfair, one of the lessons I've learned over time is that change comes from self-reflection. So it's worth examining how we got here. The truth is that there is a high cost to a bad reputation. Irrespective of whether we did everything that is being said about us in London today (and to be clear, I don't think we did), it really matters what people think of us, especially in a global business like ours, where actions in one part of the world can have serious consequences in another."

So, did it work?

In a word, yes. In a dramatic turn of events, not only was Uber awarded with a 15-month permit granting them a license to operate last June, it survived London cab drivers' recent legal challenge of that permit.

Now, Uber's far from perfect. As a company, executives and employees are still finding their way. But the London situation is a perfect example of how attempting to follow emotionally intelligent principles of conflict resolution and relationship building are helping Uber to thrive where it once faltered.

And here is where Musk and Tesla could take a major step forward.

The SEC isn't going anywhere. Stop viewing it as the big, bad wolf who is out to get you. 

Instead, take a page out of Uber's new playbook:

Take some time for self-reflection.

Look for ways to work with regulators to advance a mission that a lot of people are eager to get behind: a world with cleaner automobiles.

And most importantly, remember:

There is a high cost to a bad reputation.

Published on: Feb 27, 2019
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