Tesla delivered 241,300 automobiles within the third quarter of 2021. That stunned many, beat Wall Street’s expectations, and despatched the corporate’s inventory value up 5 %. Tesla managed this at a time when most automotive firm gross sales have dropped sharply attributable to provide chain points. The mindset Elon Musk and Tesla workers used to beat these points is one thing each enterprise chief and particularly each entrepreneur can study from.
It’s onerous to overstate how a lot of an achievement Tesla’s third quarter was. Tesla offered 102,000 extra vehicles than it did in the identical quarter of 2020–an enhance of greater than 73 %. The firm set a file for quarterly manufacturing. Compare that with different automotive makers: General Motors’ gross sales had been down 33 % and Ford’s gross sales had been down 27 % in these three months in comparison with the identical quarter final 12 months.
Why are automakers’ gross sales down at a time when demand for vehicles is so excessive that it is actually driving inflation? If you have adopted the information in any respect, chances are you’ll already know the reply: the continuing scarcity of laptop chips, introduced on by a mix of pandemic shutdowns and canceled orders attributable to an anticipated drop in demand. That scarcity is affecting everybody, as each analysts and automakers are fast to elucidate. For instance, GM CFO Paul Jacobson warned buyers final month that, “The world provide chain continues to deteriorate a bit of bit. We’ve received a number of impacts which have worsened, primarily, the semiconductor provide chain danger.” These identical automakers optimistically predicted elevated sales–just as quickly because the factories might provide them with extra chips.
Tesla, after all, was affected by the chip scarcity as effectively, as Musk acknowledged throughout an earnings name in July. “The chip provide is essentially turning into an element on our output,” he stated. “This is out of our management, primarily. It does appear to be it is getting higher, nevertheless it’s onerous to foretell.”
That’s the place the opposite automakers ended their statements–there’s a scarcity of chips, it seems prefer it’s getting higher, and we’ll be promoting like gangbusters as quickly because it does. The distinction is that Musk went on to elucidate how Tesla was managing to construct vehicles anyway.
“An immense effort.”
“Achieving the output that we did obtain was solely attributable to an immense effort from individuals inside Tesla,” he stated. “We had been capable of substitute different chips. And then write the firmware in a matter of weeks. It’s not only a matter of swapping out a chip. You additionally need to rewrite the software program. It was an extremely intense effort of discovering new chips, writing new firmware, integrating with the automobile, and testing in an effort to keep manufacturing.”
In different phrases, he and the workers at Tesla stored doing what they’d at all times accomplished. They tailored to a altering panorama and located methods to resolve issues on the fly. Later within the name, Musk even entertained the query of whether or not Tesla may remedy the issue as soon as and for all by constructing its personal semiconductor plant. “People need to say, ‘Why do not you simply construct a chip fab?'” he stated. “Well, OK, that might take us–even shifting like lightning–12 to 18 months. So it isn’t like you possibly can simply whip out a chip fab.”
I get that Tesla is not going into the semiconductor enterprise anytime quickly, and I’m not suggesting that it ought to. I’m saying that Musk is the uncommon chief who will take into account each potential answer to an issue, even these most CEOs would instantly reject as a result of these options are exterior the corporate’s enterprise mannequin or are one thing it would not know learn how to do. When confronted with one thing he would not know learn how to do, Musk goes and learns learn how to do it. In different phrases, Musk has what Stanford psychology professor Carol Dweck calls a development mindset–the perception that he can develop and develop abilities and talents he did not have earlier than.
He and Tesla additionally displayed one thing I believe each profitable entrepreneur needs–an inner locus of management, outlined by psychologists as the assumption that your successes and failures primarily outcome from stuff you do. People with an exterior locus of management consider their successes and failures are primarily decided by forces exterior themselves. While each viewpoints have benefits and drawbacks, when confronted with an issue just like the chip scarcity, individuals with an inner locus are likelier to do what individuals at Tesla did and determine a strategy to construct vehicles with different chips. People with an exterior locus usually tend to do what GM and Ford did and pin their hopes on bettering situations at semiconductor factories. (Another instance of Musk’s willingness to take motion within the face of challenges is his not too long ago introduced resolution to maneuver Tesla headquarters from Palo Alto to Austin.)
There’s a small however rising group of Inc.com readers who get a every day textual content from me with a self-care or motivational micro-challenge or thought. Often, they textual content me again and we wind up in an ongoing dialog. (Interested in becoming a member of? You can study extra right here.) Many are profitable entrepreneurs, and so they inform me that when confronted with a problem, they have an inclination to take motion, believing it is as much as them to discover a means to enhance issues.
The reality is that nearly any scenario you face in enterprise or in life is a mix of inner and exterior components, issues you possibly can management and different issues you possibly can’t. Focusing on what you are able to do and believing your actions will make a difference–that generally is a game-changer. Just ask Elon Musk. He’s received 241,300 offered vehicles to show it.