Last week, Tesla released its 2021 Impact Report, which details the efforts the company has made related to its environmental, social, and governance (ESG) impact. It’s a long report, 144 pages to be exact, and, because I had some time, I read through it.
In a lot of ways, the report is what you’d expect. It’s a report about all the things the company says it’s doing to make a positive impact. For example, the report says Tesla helped its customers “avoid emitting 8.4 million metric tons of CO2e.” I don’t really know what that means, but it sounds good, I guess. Especially if you make electric vehicles.
The company also said it is responsible for creating 100,000 jobs. That’s a little more concrete of a number and is also a good thing. The entire report is full of good things.
Obviously, every company wants to look good and wants to portray its impact in as positive a light as possible. That’s the main reason you go through the effort to produce and publish a 144-page report about how great your company is.
The report, however, is about a lot more than just environmental impact. In fact, maybe the best part comes on page 12, in a section about corporate governance. That’s generally the things a company does to ensure it isn’t doing anything illegal, unethical, or otherwise bad for stakeholders. This simple 10-word sentence goes beyond that, however:
“Tesla aspires to be a ‘do the right thing’ company.”
Look, I know that sounds like something every company would say–or, at least, something every company should say. We expect companies to tell us they intend to do the right thing, even though we know they often don’t.
What Tesla said is a little different, however. Tesla said it “aspires” to be the kind of company that does the right thing. If you made a list of companies that were known for doing the right thing, Tesla wants to be on the list. But there’s also a degree of self-awareness that perhaps it’s not a given. It takes work to be that kind of company, and Tesla is saying that it believes it’s important to do that work.
Telling your team what you aspire to become creates a standard by which every person in the company can measure every decision they make. That kind of principle affects everything you do. It defines whom you hire and how you treat them. It also determines how you interact with your customers. It determines how you lead.
It also acknowledges that Tesla doesn’t always get it right. Companies are made up of people, and people don’t always do what you wish they would do. Sometimes they make decisions that aren’t in the best interest of the company, its customers, or its shareholders.
As a leader, your job is to make sure everyone keeps those 10 words at the forefront of the decisions they make. Your job is to be sure that your team is moving in the same direction as your aspirations. It doesn’t happen unless everyone buys in.
That’s why I think this is such a useful rule. Maybe not a rule, but a principle at least. If you tell your team what you want to become, you invite them to be a part of that. You also create a clear expectation. Whenever anyone is faced with a decision, the question is “Does this get us closer to being the type of company we want to be?” It doesn’t get much more simple than that.
