Can Elon Musk Do It?

CAN ELON MUSK DO IT?

It may seem impertinent to ask whether Elon Musk is up to the challenge of remaking the federal government.

He is stupendously good at building things—like Tesla and SpaceX. And with the demolition of USAID, he and his acolytes have proven to be good at breaking things—particularly when empowered to do so by the President of the United States.

No one should be surprised that Musk’s aggressive moves have provoked howls from the guardians of the status quo. Yet if you believe that many federal agencies are irredeemably dysfunctional, obstructionist, and wasteful, then the only option may be to tear things down to the studs.

But then what?

America is facing a slew of mind-bending problems, including runaway entitlement costs, crumbling infrastructure, substandard schools, Chinese militarism, an imperiled middle class, and lackluster productivity growth. To tackle these and other challenges, America needs a central government that’s radically more capable, not just smaller.

And there’s the rub: no one knows if Musk is any good at rebuilding things? Is there anything in his experience that will help him in the hard, grinding work of revitalizing America’s ossified federal agencies? (Twitter isn’t the Defense Department).

Rejuvenating a moribund institution takes steely courage, but it also patience and nuance.

Musk might take a lesson from Bill Anderson. During his tenure as CEO of the pharmaceutical business of Hoffman La Roche, the world’s second largest drug-maker, Anderson orchestrated a remarkable metamorphosis. He sliced the number of management layers in half, dismantled insular head office functions, turned fiefdoms into collaborative communities, shifted the leadership model from command-and-control to empower-and- enable, increased the autonomy of those on the front lines, and made every employee accountable for patient impact. The moves not only saved the company $3 billion per year, they made Roche Pharma dramatically more energetic, focused, and flexible.

Insights could also be gleaned from Zhang Ruimin, the recently retired Chairman and CEO of Qingdao-based Haier. Over the course of a decade, Zhang transformed what had been a mediocre, municipally-owned appliance maker into a global, innovation powerhouse. He did so by flattening the pyramid, breaking monolithic business units into thousands of self-managing “micro-enterprises,” using open innovation to source the best ideas from across the world, and giving every employee a financial stake in the success of their team. This radical makeover spawned a slew of new products and businesses and turned a once sleepy company into a global benchmark.

Rejuvenation can’t be accomplished without a certain amount of trauma. Ineffective programs have to be shuttered, and seat-warmers shown the door. But the trauma needs be brief and well-aimed. If it is not, the organization will be permanently weakened—not least because the first rats off a sinking ship tend to be the best swimmers.

Maybe America can live without USAID, or even the Department of Education. But it can’t live without the US Army, the National Institutes of Health, the Federal Bureau of Investigation, and many other agencies. Yes, these institutions need to be downsized; but they also need to be rejuvenated. That will be the ultimate test for Musk and his boss.

[Note Michele Zanini and I are working on a longer piece about DOGE. Watch this space.]