I often drive by the Tesla factory in Fremont, California, to visit family or clients in San Jose. The auto plant sits just off the highway that serves as one of the main arteries into Silicon Valley.
The Tesla sign is clearly visible from the highway, but one of the world’s most advanced automotive manufacturing plants is largely hidden from view. It covers 5 million square feet over 370 acres. Most people never see the plant’s size or appreciate its complexity.
In interviews, presentations, and conference calls, Tesla Chief Executive Elon Musk uses examples and vivid language to explain the complex process of producing electric vehicles that most people never see.
Business leaders who run complex organizations or divisions should take a page from the Musk playbook and explain their businesses before someone else with less expertise does it for them.
This week, Tesla reported its first quarterly revenue of more than $1 billion. Musk acknowledged that ongoing chip shortages are “quite serious,” which makes it difficult to forecast production volume for the second half of the year.
Manufacturing electric vehicles is “insanely difficult,” Musk said. “Those who have not actually been involved in manufacturing just have no idea how painful and difficult it is. It’s like you got to eat a lot of glass.”
Building an EV prototype is easy compared to producing the vehicle itself, Musk continued. He then offered an example to support his statement.
“There are 10,000 unique parts and processes that have to work,” he said. Musk explained that even if they have 9,999 of those parts, just one missing part means the car can’t ship. “For example, a big struggle this quarter was the module that controls the airbags and the seatbelts. And obviously, you cannot ship a car without those. That limited our production severely worldwide in Shanghai and in Fremont.”
Musk provided further context by reflecting on manufacturing is really Tesla’s long-term competitive advantage.
The really remarkable thing that Tesla has done is not to make an electric car, or to be a car start-up, because there have been hundreds of car start-ups in the United States and outside United States. The thing that’s remarkable is that Tesla didn’t go bankrupt in reaching volume production. That’s the amazing part because everyone else did. They thought the prototype or the idea was the hard part, and it is not. It is trivial by comparison with actual production. So it’s always worth noting that of all the American car companies, there are only two that have not gone bankrupt, and that is Ford and Tesla. So the seeds of defeat are sown on the day of victory, and we must be careful that we do not do that.
Leaders who communicate complex ideas should see themselves as the Explainer-In-Chief for their business units, much like Musk does when he talks about the hard work of building an electric vehicle.
A common complaint that I hear from CEOs and business leaders is that most people in their target audience don’t understand the complexity of their business. I hear the same frustration from leaders in almost every industry. Their comments go something like this:
“Carmine, most people have no idea how hard it is to…provide energy, grow food, cure disease, develop a new drug, ship a product to your doorstep that you ordered hours earlier.”
These leaders are right. In 2002, psychology researchers discovered a cognitive bias they call the “illusion of explanatory depth.” According to the research, “people feel they understand complex phenomena with far greater precision, coherence, and depth than they really do.”
You might have have a deep understanding of your business or field; other people do not. But they think they know it. By giving your audience specific examples in clear and vivid language, you will educate them about a process that’s far more complex than they know.
The better your audience understands the process, the more likely they’ll be to appreciate what you’ve accomplished.