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Powering a Revolution

At Tesla Motors, ensuring the electric-car maker's unique vision and mission are carried out requires a whole new approach to HR. 

Monday, July 21, 2014
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Robert Damon describes himself as a "gas-guzzling Porsche driver" and "not an electric-car guy."

Even so, he's a big admirer of Tesla Motors, the Palo Alto, Calif.-based manufacturer of electric cars.

"I love Tesla Motors," says Damon, executive chairman for the Americas at Los Angeles-based Korn/Ferry International. "Tesla is perceived as a really good place to work -- it's an automotive company with all the characteristics of a high-tech company, and that's really cool." 

Christopher Cabrera, meanwhile, is an electric-car guy -- in fact, he owns a black Tesla Model S sedan, and the superb customer service he received recently after emailing the company about a minor problem with it -- i.e., a Tesla employee showed up at his door an hour later with the keys to a brand new loaner car, drove Cabrera's car away and had it returned fixed and fully charged 24 hours later -- led him to write a post about it on his company's blog.

"The customer experience I had with Tesla is like nothing I've ever experienced before," says Cabrera, founder, president and CEO of Xactly, a 300-employee compensation-software provider in San Jose. "I'm a big fan of the company."

Damon and Cabrera are hardly alone in their high estimation of Tesla and its products: The Model S won the No. 1 spot earlier this year in a Consumer Reports automobile ranking of quality, reliability and customer satisfaction. Investors continue to snap up Tesla's stock, the price of which has soared from $26 per share in 2010 to north of $200 earlier this year. The 6,000-employee company anticipates selling at least 35,000 Model S units by the end of 2014, up substantially from previous years.

Founded by billionaire entrepreneur Elon Musk, Tesla doesn't just build cars -- it also manufactures electric power trains for other car companies, operates car-charging stations around the world and has a retail network for selling its vehicles directly to customers, unlike the independent-dealer model used by other carmakers. (Tesla's retail model has been challenged in court by traditional auto dealers in some states.) What's more, the company's operations will sprawl even farther within the next few years, once it opens a planned $5 billion lithium-battery "giga-factory" at a soon-to-be-announced location.

CEO Musk has big plans for Tesla: Although the Model S retails for $70,000, he plans to introduce a lower-priced model soon that will start at around $30,000, putting the dream of owning an electric car within reach of a critical mass of consumers. Not surprisingly, staffing up for this initiative as well as the battery plant will entail some quick work on HR's part. Luckily, Arnnon Geshuri, Tesla's HR leader, is no stranger to working at fast-paced start-ups: Prior to joining Tesla in 2009, he spent five years managing staffing and recruiting at Google as that company ballooned from 2,500 employees to more than 20,000. 

One of Geshuri's most important tasks is, of course, finding and retaining the best talent for Tesla.

 "If you fill the company up with the right people, anything is possible after that," he says.

Geshuri and his team also see their role as not only bringing the best people to Tesla, but ensuring they understand and embrace the firm's non-hierarchical, fast-paced culture, where longer-than-average workdays and constant change are the norm. They also want to create an HR department that's as innovative as the company it serves. 

Quiet, Yet Intense 

Tesla Motors produces electric cars, but -- as a company -- could be described as a bit of a hybrid: It's a mass-production automaker that's also a Silicon Valley technology start-up. The lobby of Tesla's Spartan headquarters complex -- a former Hewlett-Packard facility nestled in the foothills of the coastal mountain range lying between Silicon Valley and the Pacific Ocean -- features a wall-mounted flat-screen "Supercharger Dashboard" with real-time statistics on the number of Tesla cars that were charged at charging stations within the most recent seven-day period and the gallons of gas that were offset.

"Traditional car-company people who may be tired of legacy car companies and millennials are both attracted to this sense of mission that Tesla has," says Damon.

At Tesla's 5.5-million-square-foot car-assembly plant in nearby Fremont, where the concrete floors practically sparkle from being buffed regularly by Zamboni machines, the difference between it and other industrial companies becomes clearer. The facility is flooded with natural light that pours not only through skylights the company installed, but through windows that used to be covered over in gray paint when the facility was a joint operation owned by General Motors and Toyota.

The factory's employee-break areas -- pleasantly appointed spaces filled with plants and easy chairs, and stocked with free coffee, soda and snacks -- are more akin to what you'd expect to find at a lavishly funded tech start-up than an industrial plant. Out on the factory floor, it's eerily quiet, even though hundreds of workers are laboring to assemble cars, with the help of enormous German-made robots that lift and rotate chassis as if they're weightless.

Back at headquarters, it's also pretty quiet -- although there's a low, insistent buzzing that insiders refer to as "the Tesla hum," as small groups of employees gather around desks to collaborate. There are only two "traditional" enclosed offices in the building -- one belongs to Tesla's general counsel and the other belongs to Geshuri, who says he's "never in it." Everyone else, including Musk (who splits his time between Tesla and two other companies he's co-founded, space-transport company SpaceX and alternative-energy firm SolarCity), works in bullpen-style cubicle configurations with low walls that allow everyone to see everyone else.

"You'd be hard-pressed to pick out -- just by looking around the room -- who the vice presidents are and who everyone else is," says Nate Randall, Tesla's senior manager of global benefits and employee experience.

Office layouts such as Tesla's are common in the start-up space -- and traditional companies are starting to take notice, says Kathie Ross, executive vice president of Arlington, Va.-based Healthy Companies International.

"Removing a lot of the hierarchy and barriers to collaboration in the workplace -- it seems so elementary, but it has quite an impact," says Ross. "It really does begin to break down these value judgments about who's more important, who brings more value to the organization -- the visual impact is key."

Comfort with Ambiguity

Like other start-ups, Tesla tends to attract people who want to shake up the status quo, says Geshuri.

"Our company is very special and is very different from traditional automakers," he says. "Folks who want to be here want this innovation, they want more rapid iteration of ideas, they want rapid delivery. And this is the place for that. Other environments will not provide the same ecosystem."

It starts with the recruiting process, says Geshuri, who holds a master's degree in industrial and organizational psychology from San Jose State University and whose work experience includes stints at E-Trade Financial and Applied Materials, as well as Google.

"We look for a certain DNA in all of our candidates," he says. "They have to be innovative. They have to have done something extraordinary in their profession. We want people who have this go-get-'em, really self-initiating attitude."

Tesla wants people who have -- in whatever field they've worked in -- consistently tried to improve processes and push against the system, says Geshuri. It also wants people who've done something extraordinary in their career or personal life, whether it's winning a chess championship or being promoted multiple times in a short period, he says.

"Folks who are used to being told what to do, or who just want to do their jobs, are not the people we want," says Geshuri. "We're looking for people who are comfortable with ambiguity. We want people who are OK with not knowing what tomorrow may bring, but who know they want to be a part of it and that they're going to have the chance to shape it."

The company has a "very strong" employee-referral program for new hires that tracks how successful referrals are, who provides successful referrals and how long they stay with the company, he says. Employees are also encouraged to always be on the lookout for people who exhibit the talents and strengths that Tesla is looking for, he adds.

One of the most important recruiting dictums the company lives by is to not limit itself to "traditional" sources of talent, whether it be for engineering, IT or sales, says Geshuri.

Geshuri and his team have pushed the company to think "cross-industry" when it comes to staffing, he says. When Tesla was creating a robotics team, for example, the initial thought was to find talent at the traditional automakers and lure them to Tesla. "The staffing team challenged that -- they said, 'That might be one source of talent, but let's think more broadly: Let's go into the biotech space and find robotic-programming specialists who've built surgical equipment,' " he says.      " 'Let's look at robotics competitions at colleges.'

"We went across different industries and disciplines and brought talent together," says Geshuri. "And that combination of thought and diversity of approach created the best robotics programming team in the world."

Geshuri took a similar approach in building his HR analytics team. (The fact that Geshuri is a big fan of HR analytics isn't surprising in light of his background at Google, where Chief People Officer Laszlo Bock has won acclaim for his department's pioneering use of analytics.)  Analytics are a must at an engineering-focused company such as Tesla, he adds, where appealing to emotions instead of logic "is not going to work -- you need data."

"We focused on building out an HR analytics team with folks from various backgrounds like economi[sts], genetic[ist]s, statisticians and actuaries to ensure we had this amazing group of people that could help us capture all the people information in the company and help us to support the other functions," he says.

This mind-set extends to benefits as well, says Randall.

"I'm not going to go out and hire a benefits analyst who has 15 or 20 years of experience doing traditional benefits work -- we're challenged to do things differently here, so if I'm going to create a health program, I want somebody who's passionate about health," he says. "It doesn't really matter if they've done that particular work before or not."

Because it's a start-up in the capital-intensive automobile industry, Tesla has less money to spend at the moment on the sort of lavish perks and benefits found at large Silicon Valley companies such as Google and Facebook, says Randall. This means the company has to be creative in stretching its limited resources to provide innovative benefits that employees value -- such as a program that pays employees $5 a day to ride their bicycles to work, he says.  

Learning agility and strong interpersonal skills are key qualities for working at a company such as Tesla, says Damon.

"Like other Silicon Valley companies, [its] org chart looks more like a jungle gym than a ladder, so the way things get done at companies like these is through influence and relationships, and not with title and rank," he says. "If you're a structure freak and require a playbook, you're going to crash and burn."

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No Chain of Command

Tesla wants new hires to know that it does things differently right from the get-go -- and that starts with the employee handbook. Referred to within the company as the "anti-handbook handbook," it consists of four short pages written in an informal, conversational style that explain the company's philosophy. 

Here's how it describes Tesla's attendance policy, for example: "If you're the kind of person who holds yourself to the highest standards, our 'attendance policy' is exactly what you'd expect it to be: Be the kind of person your team can rely on. Be here when you're supposed to be here. We need you. We can't get things done when you're not here."

As Director of Training Beth Davies puts it, "an employee handbook is usually a missed opportunity at most companies, and we didn't want to miss that opportunity; we took our handbook from being 57 pages filled with policy mumbo-jumbo and boiled it down to just over three pages that truly capture what we care about here."

The handbook was created by a group of employees from the legal, HR, security and environmental-health-and-safety departments, and was then reviewed by randomly selected employees from the factory and company stores to get their input.

"The idea is to, in just a few pages, be really clear and really transparent about who we are and what it takes to be successful here," says Davies.

New hires are also informed that the traditional command-and-control model found elsewhere doesn't fly at Tesla.

"We are not a company that believes in following the chain of command -- and you can see the shock and delight in people's faces when we tell them that," says Davies, "because they've been in organizations that have chains of command and they'll tell you how it stifles their creativity or makes them feel like they're a cog in a machine."

This philosophy comes straight from Elon Musk: Anybody at Tesla can and should feel perfectly comfortable emailing or talking to anybody else -- including Musk himself -- about a problem they've encountered and what they think the best and fastest way to solve it is, says Davies.

In a few cases, the company has even had to remove managers who privately insisted to their employees that they bring any problems or issues to them first, she says.

Regular, open communication is a priority at Tesla, says Geshuri. Ironically, the importance of this was reinforced for him when he worked as a consultant for New United Motor Manufacturing Inc. -- the GM-Toyota partnership that previously occupied Tesla's Fremont auto plant. The assignment included interviewing workers at the plant to get their thoughts on how to create a better work environment. 

The workers told Geshuri that they didn't feel a connection with the company and wanted to be able to step outside the chain of command and voice their opinions.

"I realized how important it is for every single employee to feel connected and to have a philosophy of open communication and to feel you're part of a company that cares about you," he says.

Along these lines, Tesla has created an "Answer Bar" at its Fremont factory -- similar to the Genius Bar found in Apple's retail stores -- in which employees can walk up to HR staffers and get answers to any questions they may have about their benefits or the company and also provide feedback, says Geshuri.

The Answer Bar is staffed during all work shifts with at least two HR staffers, and also has computers for employees to use as well as couches and lounge chairs.

"We do conduct engagement surveys here, but sometimes we don't want to wait for surveys because they're a snapshot in time -- we like this ongoing iteration and constant connection," says Geshuri. "Surveys are kind of impersonal -- so are suggestion boxes. You want somebody to talk to."

When Tesla rolls out new initiatives, hundreds of employees will come to the Answer Bar to provide feedback, he says. "We don't have to wait for the next survey in another two quarters to make changes," Geshuri adds.

The company also makes extensive use of video for training and orientation, says Davies.

"Rather than build training based [on] 100 years of training history, we've framed it as, 'What if training was a totally new function being started today: What would it look like?' " says Davies. "And for millennials -- and everybody else, in fact -- the ideal training function would be heavy on media, heavy on video, heavy on shorter segments and heavy on just-in-time."

This approach includes a pilot program in which factory employees can scan QR codes with their smart phones next to their workstations to view short video tutorials by subject-matter experts on job-related tasks, Davies says. This way, she adds, employees don't have to be pulled off their jobs for traditional classroom training.

"We want every single point of training, recruiting -- anything -- here at Tesla to have a phenomenal employee experience," says Geshuri.

When asked to describe his most important "lesson learned" during his time at Tesla, he says this:

"HR has to have people who can look at the organization and understand what needs to be implemented at the right time, to provide really good analytics and really good, sound advice and help the company understand itself as it's maturing through its different phases. When you're providing such a great complementary value, the sky's the limit for an HR team."

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Comparing the Automakers

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