Can Elon Rebuild?

Elon Musk has proven to be good at building things—like Tesla and SpaceX. And with moves like gutting USAID and slashing thousands of federal contracts, he and his acolytes are showing they're also good at breaking things—particularly when empowered to do so by the President of the United States.

Those who view government as irredeemably dysfunctional, obstructionist, and wasteful are thrilled—for them, the only viable option is tearing 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, a growing competitive threat from China, an imperiled middle class, and lackluster productivity growth. To tackle these and other challenges, America needs a federal government that’s radically more capable—more daring, nimble, innovative, collaborative, and inspiring for the people who serve within it.

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? The Defense Department isn’t Twitter. Revitalizing a sclerotic institution takes steely courage, but 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 (Bill and his colleagues are  now trying to do the same at Bayer).

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.

Organizational renewal can’t be accomplished without a certain amount of trauma.  Ineffective programs have to be shuttered, and seat-warmers shown the door. But trauma needs to be brief and well-aimed. If it is not, the organization will be permanently weakened—not least because the most talented people are often the first to leave.

Perhaps America can live without some of the agencies targeted for “deletion,” as Musk put it.  But it can’t live without the US Army, the National Institutes of Health, the Federal Bureau of Investigation, and many others.  Some of these institutions might need to be downsized.  But more importantly, all of them will need to be rejuvenated.  That will be the ultimate test for Musk and his boss.

Written in collaboration with Gary Hamel. (Gary and I are working on a longer piece about DOGE, so watch this space.)