Tesla delivered 241,300 automobiles within the third quarter of 2021. That shocked many, beat Wall Street’s expectations, and despatched the corporate’s inventory value up 5 %. Tesla managed this at a time when most automobile firm gross sales have dropped sharply as a result of 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 automobiles than it did in the identical quarter of 2020–an improve of greater than 73 %. The firm set a document for quarterly manufacturing. Compare that with different automobile 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 yr.
Why are automakers’ gross sales down at a time when demand for automobiles is so excessive that it is actually driving inflation? If you have adopted the information in any respect, you might already know the reply: the continued scarcity of laptop chips, introduced on by a mixture of pandemic shutdowns and canceled orders as a result of 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 traders final month that, “The global supply chain continues to deteriorate a little bit. We’ve got multiple impacts that have worsened, primarily, the semiconductor supply chain risk.” These identical automakers optimistically predicted elevated sales–just as quickly because the factories may provide them with extra chips.
Tesla, after all, was affected by the chip scarcity as nicely, as Musk acknowledged throughout an earnings name in July. “The chip supply is fundamentally becoming a factor on our output,” he mentioned. “This is out of our control, essentially. It does seem like it’s getting better, but it’s hard to predict.”
That’s the place the opposite automakers ended their statements–there’s a scarcity of chips, it seems to be 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 automobiles anyway.
“An immense effort.”
“Achieving the output that we did achieve was only due to an immense effort from people within Tesla,” he mentioned. “We were able to substitute alternative chips. And then write the firmware in a matter of weeks. It’s not just a matter of swapping out a chip. You also have to rewrite the software. It was an incredibly intense effort of finding new chips, writing new firmware, integrating with the vehicle, and testing in order to maintain production.”
In different phrases, he and the staff at Tesla stored doing what they’d at all times finished. They tailored to a altering panorama and located methods to unravel issues on the fly. Later within the name, Musk even entertained the query of whether or not Tesla would possibly resolve the issue as soon as and for all by constructing its personal semiconductor plant. “People want to say, ‘Why don’t you just build a chip fab?'” he mentioned. “Well, OK, that would take us–even moving like lightning–12 to 18 months. So it’s not like you can just 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 contemplate each attainable 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 find out how to do. When confronted with one thing he would not know find out how to do, Musk goes and learns find out 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 expertise and skills he did not have earlier than.
He and Tesla additionally displayed one thing I feel each profitable entrepreneur needs–an inside locus of management, outlined by psychologists as the assumption that your successes and failures primarily end result 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 downsides, when confronted with an issue just like the chip scarcity, individuals with an inside locus are likelier to do what individuals at Tesla did and work out a option to construct automobiles with different chips. People with an exterior locus usually tend to do what GM and Ford did and pin their hopes on bettering circumstances at semiconductor factories. (Another instance of Musk’s willingness to take motion within the face of challenges is his just lately 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 day by day textual content from me with a self-care or motivational micro-challenge or concept. 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 manner to enhance issues.
The fact is that just about any state of affairs you face in enterprise or in life is a mixture of inside and exterior elements, issues you may management and different issues you may’t. Focusing on what you are able to do and believing your actions will make a difference–that is usually a game-changer. Just ask Elon Musk. He’s received 241,300 offered automobiles to show it.