What Business Leaders Can Learn From Elon Musk’s Early Actions And Decisions About Twitter

A week after taking ownership of Twitter, Elon Musk faces several crises. Indeed, the company may have set a record for the number of crises that hit an organization so quickly.

Each of the crises, such as the layoff of thousands of employees on Friday, the dramatic drop in revenue caused by the growing number of companies pulling their ads, opposition from advocacy groups, or the loss of a million users—would pose a serious challenge to any organization.

Musk is facing each of these challenges—and more—all at once.

The self-inflicted nature of his crises resulting from his actions and posts—and the way he is managing the situations—provide crucial lessons for corporate leaders.

8 Key Lessons

Tell your side of the story

Act quickly to tell your side of the story about a crisis and the reasons for your actions.

of BBC reported that “Yoel Roth, the company’s head of security and integrity, seemed to confirm in a tweet that “roughly 50%” of Twitter’s workforce had been cut across the company.

He added that most of the more than 2,000 content moderators “working on front-line review” were not affected by the cuts.

“Mr. Musk posted his commentssaying he was presented with “no choice” over what he called Twitter’s “downgrade” as the company was losing $4 million a day.

“He insisted that all those losing their jobs were offered three months’ severance pay, ‘which is 50% more than required by law’.”

You have the right priorities

In any crisis, it is important to decide what to do or say and how to prioritize those actions or words.

“Musk, in trying to present a one-size-fits-all philosophy when it comes to managing content on Twitter, is alienating the people who need it most to thrive,” Nicholas Creel, an assistant professor of business law at the College of Georgia and State Univ. said via email.

“Twitter’s advertisers and users simply aren’t willing to be part of the platform if he goes through with these changes, and yet he apparently remains committed to delivering on them,” he predicted.

“The lesson here is that if [a] the company wants to be financially successful [it] it must take into account the wishes of stakeholders who are vital to its success,” Creel advised.

Review communication plans

“Business leaders can take advantage of Twitter’s very public situation to revise their company communication plans when they themselves are in the media spotlight,” Carla Bevins, an assistant professor of business communication at Tepper School of Business of Carnegie Mellon University. , said via email.

Process matters

“While Musk uses an ‘I wing it’ approach, most other CEOs use detailed, long-term company plans that involve communications professionals, lawyers and advisors,” she noted.

“Check Story”

“Communicating your company’s responses quickly is essential. In business, it’s essential to quickly control the narrative your company is sending.

“If you don’t take control of the information being communicated by your company, then there’s a good chance that someone else will fill that information gap and shine a spotlight on your company when you might not be ready. It can be difficult to get a situation back under control if the internet and social media create an alternative narrative to the one you want to share. Clear and consistent communication is essential,” advised Bevins.

Be consistent

“Musk posts a message on Twitter, retracts it and/or deletes it entirely. Musk’s conversation with Steven King about charging $20 for verification via blue check is a great example.

“As a business leader, it can be disorienting and frustrating for employees and consumers when there is a lack of consistency in messaging from a company,” commented Bevins.

“My advice to business professionals, regardless of your communication style, be intentional with your choice of words and the audience you’re communicating with. You want others to listen to you, so connecting with them and building trust with them is important. Recognize that words have power beyond a tweet,” she said.

Customize your tone, messaging and communication style

“Elon Musk’s communication style is more casual, and as a result, different parts of him resonate with a variety of different people. As a business leader, it is important to think about how the tone and style of your message fits the needs of your target audience.

Elon Musk has shown that he can have little accountability when he acts impulsively or when he “publicly brainstorms” his ideas on Twitter. Business leaders should work closely with their communications team to best utilize the power of social media for positive brand building,” Bevins advised.

‘Be intentional’

“My advice to business professionals, regardless of your communication style, [is to] be intentional with your choice of words and the audience you are communicating with. You want others to listen to you, so connecting with them and building trust with them is important. Recognize that words have power beyond a tweet,” she concluded.

Avoiding another crisis?

After thousands of Twitter employees were laid off, there’s a potential crisis — backlash from investors — that Musk may be able to avoid.

That’s according to Vivek Astvansh, an assistant professor of marketing at Indiana University’s Kelley School of Business, who studied how stock investors responded to more than 30,000 layoff announcements from U.S. companies between 1980 and 2020.

“I have found that layoffs framed as proactive management do not attract a penalty from investors. Proactive layoffs are those aimed at reducing costs, consolidating operations, increasing efficiency, or restructuring. In contrast, layoffs following a drop in demand, financial distress or low profits receive a punitive reaction from investors,” he noted.

Musk has cited a drop in revenue — caused by social activists pressuring advertisers — as the reason for the layoffs. I see this reason as forward-looking and therefore proactive, meaning investors may not penalize Twitter,” Astvansh noted.

“If that happens, the investor reaction would run counter to the public feeling that Musk’s toughness has brought uncertainty to Twitter and the tech industry,” he noted.