Elon Musk explains his 5-step algorithm for running companies

0:00 the sort of five-step process uh first make your requirements less dumb your requirements are definitely dumb uh it does not matter who gave them to you it's particularly dangerous if a smart person gave you the requirements cuz you might not question them enough everyone's wrong no matter who you are everyone's wrong some of the time um so make your requirements less d uh then uh try very hard to delete the part or process um this is actually very important if you're not uh occasionally adding things back in you are not deleting enough right the the bias tends to be very strongly towards let's add this part of process step in case we need it but you can you can basically make incase Arguments for so many things and for a rocket that is trying to be the first fully reusable rocket there's never been a fully reusable rocket people don't understand like this is like the Holy Grail of rocketry and so you got to delete the P process step super important um and and

0:54 you can't like hedge your vs uh so uh that's why the quick for example do not fold fold down because that's a whole extra me mechanism that we don't need and then also uh whatever if whatever requirement or constraint you have it must come with a name not a department because uh you can't ask the department you have to ask a person uh and that person who's putting forward the requirement or constraint must agree that they must take responsibility for that requirement otherwise you can have a requirement that basically an intn two years ago randomly came up with off the cup uh and they don't even have to company anymore these things are often just way more silly than you'd think okay so step one uh make a requirements less dum step two delete the pot or process step if you're not adding things back in 10% of the time you're clearly not deleting up right um and and then uh only the the third step is simplify or optimize the third step not the first step um the

1:55 reason it's the third step is cuz it's possibly the most common error of a SM engineer is to optimize a thing that should not exist everyone's been trained in in uh high school and college to that you got to answer the question convergent logic y so you can't tell the Professor your question is dumb you'll get a bad grade you have to answer the question y uh so everyone's basically without knowing it they got like mental straight jacket on they'll work on optimizing the thing that should simply not exist right and then finally you get to step four which is accelerate cycle time you're moving too slowly go faster but don't go faster until you have worked on the other three things first you can always make things go faster um and then the final step is automate now I have personally uh made the mistake of going backwards on all five steps multiple times literally I automated accelerated simplified and then deleted one example I've talked about before is

2:52 like the there were these like five glass mats on top of the model 3 battery pack that were in between the floor pan and the the battery um and it was one point choking the battery pack production line and I was like basically living on the battery pack production line like Proby fix the line it was like choking the entire model 3 production program so the the first mistake was I I like try to fix the automation like make the robot better so automating was a mistake then accelerating was a mistake then optimizing was a mistake and finally I said what the hell are these Ms for um and uh and I asked the the battery safety team what are these Ms were are they for fire protection or something they said no they're for noise and vibration then I asked uh NBA noise vibration hes uh Team what's it for they said fire safety so literally it was like being in a dber cartoon okay it's like actually I feel like I'm in a dber cartoon quite frequently so then finally

3:46 okay great let's uh try a car with the the five glass mats and without uh and they put a microphone in both and and see if you can tell the difference you cannot in fact I was like which one which um so we just deleted them and just bypassed this $2 million robot robot sale it was just a complete pilot offense