Elon Musk has just taught every CEO in America a huge lesson. I hope they pay attention

Tesla delivered 241,300 vehicles in the third quarter of 2021. That surprised many, beat Wall Street expectations, and pushed the company’s stock price up 5%. Tesla has achieved this at a time when most auto manufacturer sales have fallen sharply due to supply chain issues. The mindset used by Elon Musk and Tesla employees to overcome these issues is something every business leader and especially every entrepreneur can learn from.

It’s hard to overstate how successful Tesla’s third quarter was. Tesla sold 102,000 more cars than in the same quarter of 2020, an increase of over 73%. The company set a quarterly production record. Compare that with other automakers: General Motors sales are down 33% and Ford’s are down 27% in those three months compared to the same quarter last year.

Why are auto manufacturers’ sales falling at a time when demand for cars is so high that it is literally driving inflation? If you’ve been keeping up with the news, you may already know the answer: The continuing shortage of computer chips, brought on by a combination of pandemic shutdowns and canceled orders due to an anticipated drop in demand. This shortage affects everyone, as analysts and automakers are quick to explain. For example, GM chief financial officer Paul Jacobson warned investors last month that: “The global supply chain continues to deteriorate a bit. We have multiple impacts that have compounded, primarily, the risk of the semiconductor supply chain. Those same automakers optimistically predicted an increase in sales, as soon as factories could supply them with more chips.

Tesla, of course, has also been hit by the chip shortage, as Musk acknowledged during an earnings call in July. “Chip supply is fundamentally becoming a factor in our production,” he said. “It’s out of our control, basically. It looks like it’s getting better, but it’s hard to predict.”

This is where other automakers ended their statements – there’s a chip shortage, it looks like it’s improving, and we’ll sell like gangbusters as soon as it does. The difference is that Musk went on to explain how Tesla manages to build cars anyway.

“Achieving the result we have achieved is only due to a huge effort on the part of the people within Tesla,” he said. “We were able to replace alternative chips. And then write the firmware in a matter of weeks. It’s not just about swapping out a chip. You also have to rewrite the software. It was an incredibly intense effort to find new chips. , writing new firmware, integrating with the vehicle and testing to maintain production. “

In other words, he and the Tesla employees continued to do what they had always done. They adapted to a changing landscape and found ways to solve problems on the fly. Later in the call, Musk even questioned whether Tesla could fix the problem once and for all by building its own semiconductor factory. “People want to say, ‘Why don’t you just build a chip factory? ” “, did he declare. “Well, okay, that would take us – even moving like lightning – 12 to 18 months. So it’s not like you can just pull out a fab chip. ”

I understand Tesla isn’t going into the semiconductor business anytime soon, and I’m not suggesting it should. I’m saying Musk is the rare leader who will consider all possible solutions to a problem, even most CEOs would immediately dismiss because those solutions are outside of the company’s business model or are something she doesn’t know how to do. . Faced with something he can’t do, Musk goes and learns how to do it. In other words, Musk has what Carol Dweck, professor of psychology at Stanford, calls a growth mindset – the belief that he can grow and develop skills and abilities that he did not previously have. .

He and Tesla also showed something that I think every successful entrepreneur needs: an internal locus of control, defined by psychologists as the belief that your successes and failures are primarily the result of what you do. People with an external locus of control believe that their successes and failures are primarily determined by forces outside of themselves. While both views have pros and cons, when faced with an issue like chip shortage, people with an internal locus are more likely to do what the people at Tesla did and find. a way to build cars with alternative chips. People with an external locus are more likely to do what GM and Ford have done and to base their hopes on improving conditions at semiconductor factories. (Another example of Musk’s willingness to act in the face of challenges is his recently announced decision to move Tesla’s headquarters from Palo Alto to Austin.)

There is a small but growing group of Inc.com readers who receive a daily text from me with a micro challenge or idea of ​​self-care or motivation. Often times they text me back and we find ourselves in an ongoing conversation. (Interested in joining? You can find out more here.) Many are successful entrepreneurs, and they tell me that when faced with a challenge, they tend to take action, believing it is up to them to find a job. way to improve things.