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Josh Sturm

Dr. Armstrong

SCOM 425

October 26, 2017

A Look at the Leadership Styles of Elon Musk and Jeff Bezos

Introduction

Success in the tech industry is one of the very few things in this world with no

right answer on how to get there. It takes hard work, determination and a little bit of luck.

Jeff Bezos, founder and CEO of Amazon once said, I knew that if I failed I wouldnt

regret that, but I knew the one thing I might regret is not trying (Bezos, 2017). Someone

who is successful sees their vision and will do just about anything to ensure they make it

to the other side of tunnel. Jeff Bezos is now arguably the greatest living CEO and is

going to be worlds richest man by the end of this decade. The great thing is just because

one person is successful with one style of leadership; it does not ensure it will be the

same for another person. Elon Musk, founder and CEO of SpaceX and Tesla is a great

example that there are multiple ways to become a successful businessman. Throughout

this paper we will explore what made both Musk and Bezos successful and what

leadership theories they have employed to help them get there. The argument will be

made through the rational of this essay that situational leadership is more successful than

transformational leadership.

Jeffery P. Bezos was born in Albuquerque, New Mexico on January 12, 1964,

when his parents were only teens; his parents were married for a year and later divorced.

Eventually his mother remarried Bezoss stepfather, Mike Bezos who he owes many of
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his success to (Bezos, 2017). Bezos spent many of his summers at a ranch in Cotulla,

Texas when he was a child. He cites this as one of the most important ways he learned

about his mechanical aptitude. He calls the lessons he learned from his grandfather,

Priceless (Bio, 2017). From a young age Jeff Bezos showed an amazing technical and

mechanical aptitude, and eventually graduated from Princeton University with a degree in

computer science and electrical engineering.

In 1994 Jeff Bezos was recently just hired as the youngest senior vice president in

D.E. Shaws history when he made a discovery that changed the course of his life and

business history (Bezos, 2017). Bezos discovered that the Internet was growing at a rate

of 2,300 percent a year. This is where he saw an opportunity to get in on the ground floor

of a potential completely new way of business. Bezos left his secure job in New York and

moved to Seattle where he would start Amazon, originally the first online book retailer.

He set up shop in a two-bedroom houses garage and the rest is history. On July 16, 1995

Bezos opened Amazon to the World Wide Web and by the end of the month, with no

press, he was able to sell books in all 50 states and 45 other countries. Amazon exploded

and quickly drove large book retailers out of business.

Elon Musk was born on June 28, 1971 in Pretoria, South Africa where he

displayed an early talent for computer and entrepreneurship, much like Bezos (Gregersen,

2017). At just the age of 12, Musk sold a video game he created called Blastar to a

magazine and was the start of many successes to come. Musk left South Africa in 1992 to

study business and physics at the University of Pennsylvania where he later earned two

degrees. He then headed to Stanford University to pursue a PhD in energy physics but
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dropped out two days later to start a company called Zip2, which later sold to Compaq

for 307 million dollars in 1999.

Later that year Musk co-founded X.com, which is better known as PayPal. PayPal

innovated the way money is transferred online. In October of 2002 PayPal sold for 1.5

billion dollars to eBay, which lead Musk to his two biggest successes as an entrepreneur.

In 2002 he founded SpaceX and in 2003 he founded Tesla Motors. Musk is still the CEO

of both companies to this day. Both of which makes up the majority of his net worth

which is more than 20 billion dollars to this date. Throughout all of his business ventures

Musk has always held on to his vision of a world that is no longer reliant on fossil fuels.

A world that is maximizing their use of green energy and one that is exploring space for a

new colony (Gregersen, 2017).

Discussion

As of today, Amazon.com is arguably the most customer centric company in the

world. Bezos single-handily invented the values that propelled Bezos and Amazon to

becoming the largest Internet retailer in the world. Through the many rounds of

expansion Jeff Bezos continually emphasized the, Six Core Values: customer obsession,

ownership, bias for action, frugality, high hiring bar and innovation (Bezos, 2017). Over

the years, Amazon has become a tech giant and Bezos has achieved billionaire status.

Bezos has received a number of accolades for his superb business skills. Just four short

years after founding Amazon.com Bezos was named as Time magazines Person of the

Year. In 2012, he was named Fortune magazines Business Person of the Year and in

2014, named the best performing CEO in the World by Harvard Business Review (HBR

Staff, 2017).
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Elon Musk and his companies have also been some of the most innovative and

successful companies in the entire world. Musk has been a visionary in so many ways in

the tech industry and many credit Musk for, Building the future (Korosec, 2017). Musk

is one of those rare businessmen that has never failed at a business venture. He has also

received numerous accolades to go along with the billions of dollars he has made over the

years by selling numerous companies. In 2011, Forbes listed Musk as one of Americas

20 Most Powerful CEOs 40 and Under (Korosec, 2017). In 2013, Musk was named

businessperson of the year with his work on SpaceX, SolarCity, and Tesla (Korosec,

2017). In 2017 he was named on the list of the Worlds 50 Greatest Leaders List by

Fortune Magazine (Korosec, 2017).

Both of these men have changed the way that we look at the world, and have

progressed technology far beyond where they originally found it. The amount of impact

that both Elon Musk and Jeff Bezos made on their industries is phenomenal considering

that the companies they run are barely over twenty years old. Neither Musk nor Bezos

could have gotten where they are without being extremely talented leaders. Both men

have implored multiple types of strategies to help them grow their businesses to the top

of the business world.

A critique of Musks leadership has grouped his leadership style as

transformational. Musk has utilized his vision as way to inspire his workers that they can

achieve something more. He has inspired all of us that we should move towards clean

green energy and has passed that vision to the people he leads. People have critiqued

Bezos under the theories of leadership as being situational, meaning that he utilizes both

transactional and transformational leadership theories. Bezos is particularly difficult to


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group under a set term because he uses both these leadership theories interchangeably.

Both Musk and Bezos have utilized these to progress them to where they are today.

Transformational Leadership Style

Transformational leadership, which is also known as leading by inspiring and also

as charismatic leadership is the most studied style of leadership (Aldoory, 2004).

Transformational leadership is marked by some as the great qualities surrounding that of

charisma, or better defined as, The power to captivate and energize a following

(Aldoory & Toth, 2004). Many have touted transformational as particularly important

because of its ability to communicate effectively to followers. Leaders serve as key

channels through which to communicate visions, values and the strategy of the business

(Brandt & Kakkuri, 2016). Some people say that leadership equates to communication, as

Schnurr once said, Communication not only constitutes one of the crucial aspects of

leadership performance, but leadership can productively be viewed as a communication

process (Brandt & Kakkuri, 2016).

For Elon Musk, transformational leadership is not just a leadership style it is a

way of life. He uses transformational leadership as a way to accomplish tasks on a day-

to-day basis. Musks leadership style coincides with the four strategies that typically

align with a transformational leader (Northouse, 2013, p.197). The first is his vision,

which there is no doubt Musk uses as the fuel to all his projects. Musk has made us

believe in his vision by conveying the information in an attractive, simple, understanding,

and beneficial manner which is needed by any form of transformational leader. What

makes Musk a clear transformational leader is his ability to make people believe what his

vision is. Many people find what Musk believes to be neither realistic nor believable; yet
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Musk has made it his mission to make both a reality. Musks drive to do so is shown

when he said, If something is important enough, even if the odds are against you, you

should still do it (Gregersen, 2017).

The second way Elon Musk relates to the four strategies of a transformational

leader is that he has taken on the role of being a social architect. Musk has inspired his

employees in many ways. Most importantly Musk has inspired his workforce by his

unprecedented standards of excellence. When SpaceXs first attempt to launch a rocket

failed, Musk did not falter for a second. Musk encouraged his team with a demeanor of

fortitude and ferocity and is quoted as saying, For my part, I will never give up and I

mean never. This is a perfect example of transformational leadership. Hes not

demanding people to never give up, he is saying he will never give up and is hoping to

lead his workforce to do the same.

The third characteristic that Musk uses is trust, which he continually tries to earn

with his followers by Being predictable [and] reliable, even in situations that are

uncertain (Northouse, 2013, p.197). Transformational leadership is said to be most

effective in times of struggle, which Elon has continually got his companies out of. The

fourth and final characteristic that he uses is reliance on ethical standards, which

Northouse defines as being one of the critical attributes of a transformational leader.

Northouse states that transformational leaders have, strong emphasis on followers

needs, values, and morals (Northouse, 2013, p.197).

Bezos also implores the use of transformational leadership in his style of

leadership. Although for Bezos, it is not the only way he motivates his workers. For

Bezos, he more or less uses transformational leadership as a way to inspire his workforce
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but is not fully the way he leads by. Musk fits into some of the categories that are used by

transformative leaders. He uses the first characteristic as his foundation for how he runs

Amazon.com. His vision is a key in the way he runs his business, from the beginning

Bezos has stuck to his six core values which has been instrumental in Amazons success.

The second value that Bezos uses is the third characteristic of transformational

leaders which is trust. Bezos has often been criticized for putting too much trust in his

employees. This may be why Amazon was ranked as second in employee turnover in

2013. Bezos holds all of his employees to the same standards that he holds to himself. He

trusts his followers to perform in the same matter that he does, and if they are not he has

no issue cutting ties with them, which is one of the main factors of Amazons lasting

success in the tech industry.

Transactional Leadership Style

Transactional leadership style is also defined as authoritative leadership, and

serves to articulate and establish positions held by the leader (Aldoory & Toth, 2004).

This leadership style is one that the person in charge measures performance of their

workforce, trains workers, and punishes them by rewarding or punishing employees to

influence expectations (Aldoory & Toth, 2004). This approach can be best identified by a

transactional leader to be most likely a, Type A and have a personality to that of a

micromanager.

Bezos is known for being obsessive when it comes to being focused on what

makes the customer happy. Bezos views his customer base to be the most important asset

to Amazon and he will do anything to keep them happy. Bezos truly micromanages this
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aspect of Amazon, for example he worked for two years to get the download time of a

book on the Kindle to a target of 60 seconds for the entire process.

Another way Bezos fits into the lens of transactional leadership is his way of

constantly tracking measureable goals of his followers. Amazon currently employs

56,000 workers worldwide and Bezos holds every one of those to the same standard.

Amazon has about 500 measureable goals and of those 500 goals about eighty percent are

customer oriented. Bezos is constantly tracking his followers and is the main metric to

observe if his workers are performing. Bezos has a meticulous way to adapt to trends

going on in the tech industry, which is one of the main reasons that the leadership

approach he utilizes is situational leadership.

Conclusion

Both Elon Musk and Jeff Bezos started from humble beginnings and both brought

their business to be at the top of the technology industry. They both are fantastic leaders

who received their accolades by working hard to get where they are, and both implore

different leadership techniques along the way. Although, transformational tends to inspire

workers very well and also tends to be the most effective leadership theory in times of

crisis I believe that situational leadership is far better for styles of leadership. Situational

leadership allows a leader to use both tactics to their advantage while avoiding the

downsides of both transformational and transactional leadership. Situational leadership is

the perfect balance of inspiring workers and holding them accountable for their work;

but, also being able to meticulously track their employees and punish or reward them

when that time comes. As shown by the rationale throughout this essay there is not one
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right way to lead a company but throughout the research I have done I am arguing

situational leadership is the better leadership theory to be used.


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References

Academy of Achievement (August 27, 2017). Jefferey P. Bezos Biography. Retrieved

October 26, 2017, from http://www.achievement.org/achiever/jeffrey-p-bezos/

Jeff Bezos. (2017, July 28). Retrieved October 26, 2017, from

https://www.biography.com/people/jeff-bezos-9542209

Staff, H. B., Martin, R., Goleman, D., & Collins, J. (2017, June 14). The Best-Performing

CEOs in the World. Retrieved October 27, 2017, from

https://hbr.org/2014/11/the-best-performing-ceos-in-the-world

Korosec, K. (2017, March 24). Why Tesla CEO Elon Musk Is Among the World's

Greatest Leaders. Retrieved October 27, 2017, from

http://fortune.com/2017/03/24/tesla-elon-musk-worlds-greatest-leaders/

Brandt, T., & Uusi-Kakkuri, P. (2016). Transformational Leadership and Communication

Style of Finnish CEOs. Communication Research Reports, 33(2), 119-127.

doi:10.1080/08824096.2016.1155045

Aldoory, L., & Toth, E. (2004). Leadership and Gender in Public Relations: Perceived

Effectiveness of Transformational and Transactional Leadership Styles. Journal

of Public Relations Research, 16(2), 157-183. doi:10.1207/s1532754xjprr1602_2

Northouse, P.G. (2013). Leadership: Theory and Practice. Los Angeles: Sage

Publications.

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