Growth Mindset: A Key Success Lesson to Learn from Tesla's Elon Musk

A stroke of ill luck has caught car companies into mayhem with a worldwide shortage of chips and ships. However, there is one company still posting record growth. If you have not assumed it already, it is Tesla.

“We have had a fantastic year; we had record vehicle deliveries,” stated the CEO of Tesla, Elon Musk, in the company’s annual shareholder meeting in Austin, Texas, last week (1). “It seems like we have a good chance of sustaining it only if we can get the chips. I hope the chip shortage will ease soon. And I am confident that we will be able to keep sales growth at least above 50% for a while.”

The chip shortage has dominated the entire auto industry’s headlines year around (2). According to Musk, even the electric vehicle pioneer has grappled with a lot of supply chain challenges.

“One of the major difficulties we came across in the third quarter was to get enough ships. There was a huge shortage,” stated Musk.

Yet, it doesn’t appear that the chip shortage is slowing down Tesla. Earlier last week, the company reported record deliveries of 241,300 vehicles worldwide in Q3, beating the previous record of 201,250 vehicles in Q2 (3).

And these numbers look quite favorable for Tesla if we compare it with the rest of the auto industry, which saw vehicle sales slump in the past months because of limits on production because of the supply chain shortages.

Reportedly, General Motors Co. took the biggest blow with sales in the US, its home market plummeting by a third in the latest quarter (4).

240k deliveries https://t.co/KAxKuNp6VD

— Tesla (@Tesla) October 2, 2021

Can’t Exaggerate Tesla’s Q3 Achievement

Teslas’ record-breaking deliveries came as a surprise to many. It even beat Wall Street’s expectations. Consequently, the company’s stock price witnessed a 5% jump (5).

Tesla managed it when most car companies’ sales had dramatically dropped because of the supply chain issues. It is an achievement for Tesla, something we can’t overstate (6).

Tesla sold 102,000 more vehicles in Q3 than it did in the same quarter last year, an increase of 73%. It set a record for quarterly production.

As we mentioned, the numbers seem pretty favorable for Tesla if we compare it to other car companies. For instance, GM’s sales were down 33% (7), and Ford’s sales dropped 27% in those three months compared to the same quarter in 2020 (8).

Interestingly, the demand for cars is so high; it is driving inflation (9). However, automakers’ sales are still down. If you have been following the news for a while now, the reason is, as we previously mentioned, the ongoing shortage of computer chips, the pandemic shutdowns, and canceled orders because of an anticipated demand drop (10).

Reportedly, there is also optimism that companies will witness an increase in sales as soon as factories supply them with more chips.

The electric car maker was also affected by the chip shortage. In an earnings call in July, Musk had also acknowledged the same (11). “The chip supply is becoming a factor in our output. It is out of our control. While it appears like things are getting better, it is hard to make a prediction.”

But, our bigger question is not about the supply chain shortages; it is a story for another time. Instead, today, we are focusing on how exactly Tesla is doing it. Thankfully, Musk has already explained how Tesla is managing to make cars.

How is Tesla Managing to Produce Cars?

Of course, Tesla has managed to do it with a lot of effort.

“Achieve the result that we did was only because of an immense effort from people within the company,” stated Musk.

“We substituted with alternative chips; then we went on to write the firmware in a matter of weeks. It is not just about swapping out a chip. We rewrite the software. An incredibly intense effort went on to find new chips, write new firmware, integrate it with the car, and test to keep the production going.”

In other words, Elon Musk and the people at Tesla kept doing what they have always done: adapting to the changing landscape. This attitude allowed them to find ways to solve any problems.

Furthermore, Musk also answered questions like whether Tesla may solve this issue once and for all by investing in its own semiconductor plant later in the same call.

“People ask, why don’t you build a chip fab? Well, it would take about at least 12 to 18 months, even if we move like lightning. That’s why it is not like we can whip out a chip fab,” said Musk.

Tesla is not going to foray into the semiconductor business, at least not anytime soon. But, as Minda Zetlin from Inc pointed out (12), Elon Musk is a rare leader who considers every possible solution to a problem.

Often, most CEOs immediately reject some of the possible solutions because they fall outside the company’s business model or don’t know how to do it.

But, this is Elon Musk. If he is faced with something he doesn’t know how to do, he goes and learns it (13).

He has what is known as a growth mindset, the belief that he can grow and develop abilities and skills he didn’t have before.

In addition, Musk and Tesla also demonstrated something every entrepreneur needs, an internal locus of control. Psychologists define it as the belief that your success and failures primarily result from things you do.

In contrast, masses with an external locus of control are convinced that forces outside themselves primarily determine their successes and failures.

While both viewpoints have their own pros and cons, people with an internal locus are more likely to do what people at Tesla did when faced with an issue such as the chip shortage. They would find a way to make vehicles with alternative chips.

Another example is Musk’s recent announcement on moving Tesla’s HQ from California to Texas (14); his preparedness to take action in the face of a challenge.

Giga Texas: 6 months ago vs this week pic.twitter.com/CAgmIJ3wKQ

— Tesla (@Tesla) July 29, 2021

Whereas people with an external locus are more likely to do what Ford and GM did. They pinned their hopes on improving conditions at semiconductor companies.

Growth Mindset – A Critical Skill for Every Founder

The most basic point about developing a growth mindset is that you need to look at one to understand it. Thankfully, we already talked about him.

All in all, the key is to overcome obstacles and look at any setbacks as new opportunities (15).

Here is how you can also nurture a growth mindset

Constant Learning and Practice

One of the most prominent traits you need to develop a growth mindset is realizing the importance of constant learning and using every opportunity to learn, practice, and improve.

We often want perfect grades or 100% results but fall into the trap of pretenses such as I am not creative enough or not good at something.

However, in reality, you just have not practiced enough.

Inherent the culture of practice, use failures to make important decisions, to defend or give up. That’s where character development happens.

Once you begin to see blunders or failures as a learning process, you will achieve a growth mindset with no limit to what you can accomplish!

“As for building up a growth mindset, I believe the best way to do it is via constant learning.” – Vlad Calus. Planable.io’s Co-founder (16).

Being Optimistic

There is a lot of power in YET.

If you wish to nurture a growth mindset, you need to be optimistic. It is an ability to face and challenge and say, “I can not do this YET. However, with practice, I will.”

Of course, it won’t be an easy walk. You will need a level of confidence to be vulnerable and learn something new.

However, as you ideate and test your ideas, constantly find new opportunities to create value for yourself and others, you can also develop a growth mindset (17).

“If you feel secure enough with what you are doing, you are not pushing your boundaries enough.” – Manish Balakrishnan, Founder, DSHG Sonic (18).

Realizing That All Your Efforts are Fruitful

There are two fundamental reasons why you should not focus solely on your ultimate goal:

It would be best if you believed that your achievements are not finite
Success rarely happens overnight; it needs months or even years of patience

Besides the bigger vision, you also need to focus on smaller and more easily achievable goals to believe your efforts are conducive.

Remember, being patient is a virtue, and it is necessary to develop a growth mindset.

“Keep your focus here and now where it belongs.” – Qui-Gon Jinn, Star Wars (19).

Using Criticism to Improve Your Business

You will stop seeing any criticism as a bad thing once you start using the feedback you get to improve your offerings.

Of course, criticism may hurt sometimes, but they are often invaluable.

If you wish to develop a growth mindset, you can’t ignore customer feedback. Because, at the end of the day, you are building your business for your customers.

“Entrepreneurship offers an excellent opportunity to learn more about ourselves, our business, especially in the early days. It is a reflection of our strengths and weaknesses. You only need the courage to explore.” – Oz Merchant, Founder of Wellistic (20).

Getting Inspiration from Others’ Success

Instead of feeling threatened by other entrepreneurs’ successes, you should let it inspire you. Or, even better, reach out for their advice.

The best business owners and founders know when to ask for help, reach out to others, and help others. Successful founders are rarely as confident as they see. Like us, they also experience self-doubts. We all suffer from imposter syndrome sometimes.

In addition, when you reach out to others for any advice or word, you get to learn from their wisdom and may also end up making new connections, improving your social skills, or even new friends (21).

“Think about your finances, mental health, physical health, relationships, and self-development. Your daily habits are key to develop a growth mindset and put your life on the right track.” – Maciej Gałkiewicz, Ragnarson CEO (22).

Signing Off

“I see mindset as the lens from which I see the world. A growth mindset is an empowered lens from which I can see how I can better myself and my business.” – Oz Merchant.

Most successful entrepreneurs you will come across will tell you that they tend to find a solution and take action when facing any challenge. They believe that it is up to them to make things better.

Realistically speaking, whether it is business or your life, almost any situation you face is a combination of external and internal factors. There will always be things you can control and ones you can not.

But the game-changer is focusing on what you can do and trust that your efforts will make a difference. Just like what Musk did, and he has more than 241,300 sold vehicles to prove this point.

What kind of mindset do you possess? If you have a fixed mindset, what is the main thing stopping you from nurturing a growth mindset? If you have a growth mindset, what helped you change your mindset? Let us know!