Elon Musk, CEO of Tesla (TSLA), made a big admission on the afternoon of April 13th. Apparently channeling the Friday the 13th horror spirit, Musk announced via tweet that the electric car manufacturer had over-automated its production process: “Excessive automation at Tesla was a mistake. To be precise, my mistake. Humans are underrated.” The tweet was a follow-on from an interview with CBS that aired Friday morning in which Musk talked about gutting much of the overly complex Model 3 assembly line: “We had this crazy, complex network of conveyor belts….And it was not working, so we got rid of that whole thing.” This admission represents a major reversal of virtually everything Musk and his team at Tesla have been saying about the Model 3 production process. And it signals a death knell for the Tesla bull case that ought to send prudent investors running for the hills – or taking up a short position. seekingalpha.com, April 16, 2018, Elon Musk Has Buried Tesla With A Single Tweet. Photo by Roberto Nickson (@g) on Unsplash

This looks to me like a great case of brutal honesty, where we then get opportunists yelling run for the hills. Why, one may ask, is this happening? Shouldn’t we applaud brutal honesty? My first observation is that because it is so rare, when it happens, too many observers are unable to process the significance of the statement. Instead, the notion that anyone would admit an error is unthinkable. We just don’t do that. Instead, we spin things, and one must parse through the noise to find any particle of truth, if any.

I gave a brutally honest report on the status of our project to our customer. The account managers freaked out. Now, brutal honesty simply meant that I told the customer the objective status. However, in this company, we never admitted anything but trivial issues until the end, when we would then miss our delivery date by months. The customer knew this. We knew this. This protocol of unobjective optimism was followed religiously, late product delivery after late product delivery. How do you think the customer reacted to my objective status? Was it like the pundit above, saying run for the hills? No. They already knew enough to have a feel for where things really stood. What they appreciated was that finally someone was simply telling them the objective and complete facts.

See How To Get Honest Reporting

My second observation is about when someone reacts to honesty with “whoa, abandon ship.” This often signals to me someone who either has not experienced objectivity before or has not done their homework to determine what was really going on given the typical spin many people provide in lieu of objective data.

Are you treating honesty in a way that encourages and supports everyone being brutally honest?