Success factors

Leadership in times of uncertainty: 3 key lessons from Elon Musk's Twitter take-over

Published on
June 1, 2023
Elisha Dunn
Content Manager
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Elon Musk is a man who needs no introduction. 

After the success he has garnered from SpaceX and Tesla — and with his penchant for making a splash — it came as no surprise that his announcement to buy Twitter for a whopping US$44 billion (which comes at US$54.20 per stock) broke the internet.

Experts say that Musk overpaid since Twitter only traded at US$39 per stock on April 1, 2022. But the business savant seems determined to see things through.

Objectively speaking, the Musk–Twitter saga is one of the most widely covered acquisitions we have witnessed so far. So, what is Musk’s strategy behind all this? And what can you learn from him in the process?

In this article, we’ve listed 3 crucial lessons that business leaders can adopt, as well as share our insights into each area to shed more light on the ins and outs of one of the tech world’s most expensive acquisitions ever.

Let’s begin.

Lesson #1: Reputation is key, but good talent is everything 

In 2022, Musk expressed interest in Twitter by buying 9.1% of its shares on the open market. The then-administration offered him a seat on the board, which did not work out as planned.

Eventually, Musk made an offer to buy Twitter out for US$54.20 per share (which totalled to the now-infamous US$44 billion sum), and the social media execs accepted — making it the third-largest tech acquisition in history.

Thanks to his reputation as a successful serial entrepreneur across different industries, Musk easily funded this new endeavour by securing cash and debt financing from several institutions, including Bank of America and Morgan Stanley.

Clearly, Musk’s business savvy has definitely bolstered his reputation among key investors, earning their trust in the process.

Shortly after the takeover, Musk aggressively implemented cost-cutting plans by laying off about half of Twitter's payroll, including Twitter CEO Parag Agrawal and Policy Director Vijaya Gadde. 

Unfortunately, he also laid off indispensable teams, like the ones responsible for fighting off hate speech and misinformation. Unsurprisingly, chaos ensued as Twitter’s major advertisers jumped ship, and its revenue plummeted as a result. 

So, what’s the lesson here?

Business leaders want to be surrounded by teams who share the same vision and goals — the driving force behind Musk’s actions. However, Musk’s decision to let go of good talent came at the expense of Twitter’s mission as a whole. 

As a result, Musk was not able to deliver on his initial promise of “unlocking Twitter’s potential” and put his personal brand and the social media platform in a precarious position where it will be harder to make future investors take him seriously, as well as retain and/or attract new talent. 

As business leaders, the goal is to strike a balance between high-quality productivity and a great company culture that fosters psychological safety. 

Company culture sets the tone for how well employees behave and work together as a unified team. 

So, ask yourself: How can I create a culture that breaks down the boundaries between teams and allow every employee to thrive? How can I effectively guide rapid but good decision-making without wasting good talent? 

And how can I streamline the overall workflow so that everyone can hit goals while being able to pivot when things don’t go according to plan?

Lesson #2: Brand image is king

Luckily for Musk, Twitter’s reputation as both one of the leading news aggregators and social media platforms remains strong. 

Currently, Twitter boasts over 368 million monthly active global users — a figure that is expected to decrease to around 335 million by 2024. 

But 335 million is still a formidable number despite all of the negative publicity. This paints a clear picture of one timeless truth: Most customers care more about the brand than the people behind them.

This is true for other brands, including Adidas and Chanel, despite their controversial past.

But does this mean that leaders of strong business brands can get away with anything? The short answer is no.

Brand image is crucial for any business, which puts the power in the hands of the consumers.

The teams behind Adidas and Chanel, through the decades, were able to distance the brands from their problematic beginnings through robust marketing strategies that reflect their current target markets’ values.

How did they accomplish that?

For one, they focused on the finer details across all points of contact with their intended audience.

For Adidas, they focused on cultivating a company mission that is dedicated to “diversity and inclusion, mutual respect and fairness”. And they recently made good on their word by showing intolerance for endorsers who do not embody their mission.

Chanel was able to grow into the luxury household name that it is today through a careful revival strategy enacted by the late Karl Lagerfeld.

Through Lagerfeld’s injection of excitement and dynamism into Chanel’s marketing — such as creating a stylish runway show dedicated to feminist slogans and social protest — the brand became appealing again to the old, the young, the understated, the hip, and the woke.

By paying attention to how their brands presented to modern audiences, both Adidas and Chanel were able to elevate themselves and establish newfound recognition that helped them strengthen market ties.

So, ask yourself: How is my brand presenting to my target audience and the world at large? Are we listening to what our customers really want? And are we contributing to a bigger purpose other than our own?

Lesson #3: Always listen to acquisition experts

Thanks to expert guidance, Musk’s acquisition efforts were aligned with many corporate mergers and acquisitions (M&A) transactions. However, this is a lengthy and tedious process and doing it alone can present a multitude of challenges.

From our experience, business leaders need to pay attention to 3 key factors:

  • Due diligence: Before even considering acquiring a company, business leaders must conduct a thorough investigation of a prospect from the top down to avoid setbacks.
  • Human resource planning: To ensure a seamless transition and keep employees happy and engaged, business leaders must have a solid human resource strategy in place before anything else.
  • Strategic alignment: Your vision about where you want a prospect to go must align with your existing strategic corporate interests. What is your vision? Is it to build on your current company’s tech resources? Is it to tap into a new market? In Musk’s case, Twitter (social media platform) is a completely different ball game compared to SpaceX (spacecraft engineering) and Tesla (automotive, artificial intelligence, and clean energy engineering). So, we can only speculate that his purpose for acquiring the social media giant is to diversify his portfolio — which is objectively a solid business move.

Of course, these things are easier said than done. And for that, an open discussion with M&A experts is a must in order to avoid costly setbacks and pitfalls.

In the years that the BeingIconic team has partnered with scale-ups in growing their businesses, we have successfully built holistic brand image and human resource strategies, as well as assisted in acquisition endeavours. 

Partner with us if you want us to do the same for you.