Elon Musk Algorithm - no waste

I have been reading the game tape on Elon Musk by Walter Isaacson.

Elon is different. Elon hates waste.

So much so that at the age of 29, Elon was suing NASA for not running a competitive bid process for space contracts. He saw Boeing and Lockheed Martin as inefficient contractors in the space industry that were constantly receiving comfortable “cost plus” contracts with NASA.  A twenty something suing one of the most respected government agencies and his potential customer for SpaceX!

Elon ultimately won the lawsuit and successfully launched his rockets so he could become an eligible contractor for NASA. Elon is a mix of Apple’s Steve Jobs (design & vision) + Toyota’s Taiichi Ohno (manufacturing & OPS excellence).

If I had to summarize Elon’s operational focus, is it comes down to his obsession with LEAN. He is obsessed with minimizing waste.

Elon had an algorithm he used to transform the space and automobile industries. Elon came up with an algorithm that he used to transform the space and automobile industries that he repeats ad nauseum. Elon even admits: “I became a broken record on the algorithm. But I think it’s helpful to say it to an annoying degree.”

Elon’s Algorithm*:

1. Question every requirement. Each should come with the name of the person who made it. You should never accept that a requirement came from a department, such as from “legal department or “safety department.” … you should question it, no matter how smart that person is. Requirements from smart people are the most dangerous, because people are less likely to question them.

2. Delete any part or process you can. You may have to add them back later. In fact, if you do not end of adding back at least 10% of them, then you didn’t delete enough.

3.Simplify and optimize. This should come after step two. A common mistake is to simplify and optimize a part or a process that should not exist.

4. Accelerate cycle time. Every process can be speeded up. But only do this after you have followed the first three steps. In the Tesla factory, I mistakenly spent a lot of time accelerating processes that I later realized should have been deleted.

5. Automate. That comes last. The big mistake in Nevada and at Fremont was that I began by trying to automate every step. We should have waited until all the requirements had been questioned, parts and processes deleted, and the bugs were shaken out.

Elon is a case study for LEAN. His algorithm is a great framework for improving any process.

Onward,

Matt

* Elon Musk - Walter Isaacson - pg. 249