Elon Musk's management practises as they pertain to SpaceX

[pagheca]

Many of you will certainly know Kelly Johnson 14 rules and practice he used to "run" Skunkworks.

I report them here, just in case:

1. The Skunk Works manager must be delegated practically complete control of his program in all aspects. He should report to a division president or higher.
2. Strong but small project offices must be provided both by the military and industry.
3. The number of people having any connection with the project must be restricted in an almost vicious manner. Use a small number of good people (10% to 25% compared to the so-called normal systems).
4. A very simple drawing and drawing release system with great flexibility for making changes must be provided.
5. There must be a minimum number of reports required, but important work must be recorded thoroughly.
6. There must be a monthly cost review covering not only what has been spent and committed but also projected costs to the conclusion of the program.
7. The contractor must be delegated and must assume more than normal responsibility to get good vendor bids for subcontract on the project. Commercial bid procedures are very often better than military ones.
8. The inspection system as currently used by the Skunk Works, which has been approved by both the Air Force and Navy, meets the intent of existing military requirements and should be used on new projects. Push more basic inspection responsibility back to subcontractors and vendors. Don't duplicate so much inspection.
9. The contractor must be delegated the authority to test his final product in flight. He can and must test it in the initial stages. If he doesn't, he rapidly loses his competency to design other vehicles.
10. The specifications applying to the hardware must be agreed to well in advance of contracting. The Skunk Works practice of having a specification section stating clearly which important military specification items will not knowingly be complied with and reasons therefore is highly recommended.
11. Funding a program must be timely so that the contractor doesn't have to keep running to the bank to support government projects.
12. There must be mutual trust between the military project organization and the contractor, the very close cooperation and liaison on a day-to-day basis. This cuts down misunderstanding and correspondence to an absolute minimum.
13. Access by outsiders to the project and its personnel must be strictly controlled by appropriate security measures.
14. Because only a few people will be used in engineering and most other areas, ways must be provided to reward good performance by pay not based on the number of personnel supervised.

I was wondering about which would be Elon Musk equivalents if he would write them (he didn't, right?).

As a start, one can make uso of the highly successfull Skunkworks rules. Some of them, despite the big difference between the two "enterprises" could be shared. #1, for example, I guess.

Any idea?

I'm deeply interested in this, because I'm struggling to import some (only some!) of the management rules typical of highly successful private/public enterprise into much more terrestrial science projects.

Funny exercise, I know, but let me try to find out if someone is able to help here...

[neilh]

I imagine it would be a variation on the 12 principles of agile software, although they've admittedly been struggling with the first one: http://agilemanifesto.org/principles.html

We follow these principles:
Our highest priority is to satisfy the customer through early and continuous delivery of valuable software.

Welcome changing requirements, even late in development. Agile processes harness change for the customer's competitive advantage.

Deliver working software frequently, from a couple of weeks to a couple of months, with a preference to the shorter timescale.

Business people and developers must work together daily throughout the project.

Build projects around motivated individuals. Give them the environment and support they need, and trust them to get the job done.

The most efficient and effective method of conveying information to and within a development team is face-to-face conversation.

Working software is the primary measure of progress.

Agile processes promote sustainable development. The sponsors, developers, and users should be able to maintain a constant pace indefinitely.

Continuous attention to technical excellence and good design enhances agility.

Simplicity--the art of maximizing the amount of work not done--is essential.

The best architectures, requirements, and designs emerge from self-organizing teams.

At regular intervals, the team reflects on how to become more effective, then tunes and adjusts its behavior accordingly.

Edit/CR: removed numerous excessive line breaks

[hkultala]

At least some of his principles seem to be:

Company:

1) Only outsource a component if you really cannot make yourself

Safety/reliability:

2) Do not waste money and engineering resources trying too much to prevent failures of components, instead concentrate on making sure the system can tolerate a failure of single component by good redundancy. (google has the same mentality)

Engineering/design:

3) Standardize components and use same components on many places so you can mass-produce those cheaply

4) Do not try to create the most efficient design. Create the cheapest one that gets the job done, and maybe improve it later.

5) Keep improving things. Do not allow "we have always done this, but nobody know why"-mentality.

6) Keep your workers motivated

[Owlon]

At least some of his principles seem to be:

Company:

1) Only outsource a component if you really cannot make yourself

Safety/reliability:
...

On the contrary, the mentality is only make a component yourself if you think you can make it significantly more cheaply than the supplier. Unfortunately, that seems to be the case far too often.

[CuddlyRocket]

This topic had been removed to the Moderator Area after complaints it was off-topic. On reviewing, and not wishing to curtail discussion unnecessarily, I think there might be a place for discussing Elon's management practises, but only as they pertain to SpaceX - not in general, nor as they pertain to Tesla (for example). The original title was both too narrowly and too widely drawn, so I have replaced it.

I am returning the topic to SpaceX General Section so those who might wish to discuss this topic can do so. But let's not turn this into a flame war with provocative and tendentious comments about other people or other company's managements! That way lies locking or deletion.

[Dave G]

At least some of his principles seem to be:

Company:

1) Only outsource a component if you really cannot make yourself

Not really. 

Below is an excerpt from an interview with Max Vozoff, formerly of SpaceX.  This seems to indicate vertical integration was never really a driving principle for SpaceX.

Here's the excerpt:

There's a YouTube video of Elon speaking somewhere in 2003 saying ...  "we're really just a systems integrator, we're buying things from other people", but by the time I showed up in 2005 that had completely turned around and pretty much everything was getting done in-house. 

And you can see why when you see the interactions with these suppliers, particularly the ones in the space industry.  They think they're the only ones who can make this widget or who have the secret sauce, and when you say "no, you're too expensive", they say "well, that's what it is". And they're used to customers who, if they slip the schedule and double the price, the customer shrugs and goes back to headquarters and says, "well, it's gonna take twice as long and it's gonna cost twice as much", and that's how things go in a traditional government run program.

But SpaceX would say "no, that's not acceptable", and they'd cancel the contract.  And sometimes these suppliers were literally scoffing on the phone as you hung up, and call you back a couple of months later saying "so, have you changed your mind yet?"  And being able to say to them that "no, if you can do it, then maybe somebody else can do it too", like either SpaceX figured out how to do it themselves, because they hired some smart people and gave them the resources and tools, or you find another supplier with maybe a non-space version and you upgrade and qualify it for space.

And now what you've done, this backward supplier has bred a competitor for themselves, where they're not used to competition.  I mean, many of the suppliers in this industry would just go out of business in a heartbeat if competition were actually introduced.

So really that's the game changing stuff that SpaceX has been doing: bringing stuff in-house, not just because it gives them control of cost and schedule, but because the space suppliers, traditional suppliers just don't get it.  They're not used to being held to schedules and budgets.

And that's not true of everybody, but there is list of anecdotes I could tell you about suppliers with this attitude.  And in each case either SpaceX brings in in-house and makes it successfully, or they find another supplier and upgrade it, and that supplier is usually thrilled to have a whole new market opened up for them.

http://thespaceshow.wordpress.com/2011/03/05/max-vozoff-friday-3-4-11/

[Dave G]

At least some of his principles seem to be:

Engineering/design:

3) Standardize components and use same components on many places so you can mass-produce those cheaply

Yes, I think so.

As an example, look at the Ford Model T.  This car changed the world, but if you look at the design of the car itself, it wasn't particularly remarkable for its time.  What made the Model T special was the way in which it was built.  The Model T introduced modern mass production, dramatically reducing cost. 

But initially, many thought a cheaper car would be less reliable.  After all, you get what you pay for, right?  But in the end, the Model T was significantly more reliable.  Before the Model T, cars were mostly hand-built, and were notorious for breaking down.  But with mass production, not only was the Model T cheaper, it was actually more reliable.

I think this is what SpaceX is trying to do for rockets. 

[Dave G]

At least some of his principles seem to be:

Engineering/design:
4) Do not try to create the most efficient design. Create the cheapest one that gets the job done, and maybe improve it later.

Standard practice for any small startup, but not so much for a mid-sized successful company.

Note that, for reusability to be viable, you need extremely high efficiency.

5) Keep improving things. Do not allow "we have always done this, but nobody know why"-mentality.

This is true for most commercial companies.  Very few industries value older designs with worse specs because they have heritage.  Imagine Apple saying "Think the same".

6) Keep your workers motivated

More specifically:
6a) Always have meaningful stuff for your engineers to develop (use it or lose it)
6b) Give people the right tools
6c) Egalitarian workplace (flat management structure, direct communication between departments)

By the way, most of this stuff comes straight out of Silicon Valley.  In fact, there's a nice documentary that describes how this all came about.  Robert Noyce is not a household name like Gates and Jobs, but he should be.  Not only did he invent the integrated circuit, he formed the culture that drives Silicon Valley to this day.
http://www.amazon.com/American-Experience-Silicon-Valley/dp/B00AK51OFK/
Also available on Netflix instant watch.  Highly recommended.

[raketa]

Elon have had very bad experiences with outsourcing  at the beginning of developing Tesla Roadster and from that moment he changed his mind. He could be persuaded if fact showing better way.

At least some of his principles seem to be:

Company:

1) Only outsource a component if you really cannot make yourself

Not really. 

Below is an excerpt from an interview with Max Vozoff, formerly of SpaceX.  This seems to indicate vertical integration was never really a driving principle for SpaceX.

Here's the excerpt:

There's a YouTube video of Elon speaking somewhere in 2003 saying ...  "we're really just a systems integrator, we're buying things from other people", but by the time I showed up in 2005 that had completely turned around and pretty much everything was getting done in-house. 

And you can see why when you see the interactions with these suppliers, particularly the ones in the space industry.  They think they're the only ones who can make this widget or who have the secret sauce, and when you say "no, you're too expensive", they say "well, that's what it is". And they're used to customers who, if they slip the schedule and double the price, the customer shrugs and goes back to headquarters and says, "well, it's gonna take twice as long and it's gonna cost twice as much", and that's how things go in a traditional government run program.

But SpaceX would say "no, that's not acceptable", and they'd cancel the contract.  And sometimes these suppliers were literally scoffing on the phone as you hung up, and call you back a couple of months later saying "so, have you changed your mind yet?"  And being able to say to them that "no, if you can do it, then maybe somebody else can do it too", like either SpaceX figured out how to do it themselves, because they hired some smart people and gave them the resources and tools, or you find another supplier with maybe a non-space version and you upgrade and qualify it for space.

And now what you've done, this backward supplier has bred a competitor for themselves, where they're not used to competition.  I mean, many of the suppliers in this industry would just go out of business in a heartbeat if competition were actually introduced.

So really that's the game changing stuff that SpaceX has been doing: bringing stuff in-house, not just because it gives them control of cost and schedule, but because the space suppliers, traditional suppliers just don't get it.  They're not used to being held to schedules and budgets.

And that's not true of everybody, but there is list of anecdotes I could tell you about suppliers with this attitude.  And in each case either SpaceX brings in in-house and makes it successfully, or they find another supplier and upgrade it, and that supplier is usually thrilled to have a whole new market opened up for them.

http://thespaceshow.wordpress.com/2011/03/05/max-vozoff-friday-3-4-11/

[MTom]

At least some of his principles seem to be:

Company:

1) Only outsource a component if you really cannot make yourself

Safety/reliability:
...

On the contrary, the mentality is only make a component yourself if you think you can make it significantly more cheaply than the supplier. Unfortunately, that seems to be the case far too often.

SpaceX's motivation there is a deeper understanding of the elements of their system. This is necessary for rapid problem solving and continuous improvement. A key element for being agile.

[MTom]

At least some of his principles seem to be:

Engineering/design:

3) Standardize components and use same components on many places so you can mass-produce those cheaply

Yes, I think so.

As an example, look at the Ford Model T.  This car changed the world, but if you look at the design of the car itself, it wasn't particularly remarkable for its time.  What made the Model T special was the way in which it was built.  The Model T introduced modern mass production, dramatically reducing cost. 

But initially, many thought a cheaper car would be less reliable.  After all, you get what you pay for, right?  But in the end, the Model T was significantly more reliable.  Before the Model T, cars were mostly hand-built, and were notorious for breaking down.  But with mass production, not only was the Model T cheaper, it was actually more reliable.

I think this is what SpaceX is trying to do for rockets.

Yes, but... 

Ford's dream was the flow production. He established a production line + standardized the work (and the assembled parts) on it. This is why it was more reliable and efficient.
The mass production comes on top, being really cheap (economies of scale).

If we compare with SpaceX, the flow production (production line) and standardization can be seen also there.
But Ford's standard work based on Taylor's principles: the workers are only for doing their job, not to thinking about it. This is sure not the case at SpaceX.
The modern principles are others, they use a high degree of delegation and empowerment, causing motivation besides efficiency and reliability.

[Dave G]

The modern principles are others, they use a high degree of delegation and empowerment, causing motivation besides efficiency and reliability.

A concept pioneered by Robert Noyce.  See my previous post.

[MTom]

The modern principles are others, they use a high degree of delegation and empowerment, causing motivation besides efficiency and reliability.

A concept pioneered by Robert Noyce.  See my previous post.

Oh, I didn't read your other post.
My post was about mass production. This is often neither reliable nor efficient. Only cheaper because of the economies of scale.

[ArbitraryConstant]

More specifically:
6a) Always have meaningful stuff for your engineers to develop (use it or lose it)
6b) Give people the right tools
6c) Egalitarian workplace (flat management structure, direct communication between departments)

By the way, most of this stuff comes straight out of Silicon Valley.  In fact, there's a nice documentary that describes how this all came about.  Robert Noyce is not a household name like Gates and Jobs, but he should be.  Not only did he invent the integrated circuit, he formed the culture that drives Silicon Valley to this day.
http://www.amazon.com/American-Experience-Silicon-Valley/dp/B00AK51OFK/
Also available on Netflix instant watch.  Highly recommended.

Having seen insourcing like this, it's really something to see. At a previous job I saw something from a vendor that does some specialized stuff and has >billion dollars in revenue replaced by a smallish team and some interns over the course of a summer, and that experience has stuck with me and since then I've tried to wrap my brain around how this is even possible given how much of a head start the vendor has optimizing things.

-I think companies in a hyper-specialized niche like that gets locked in to the optimization and loses flexibility, potentially after it stops making sense. A slight shift in focus can obsolete their optimization, and they've lost the ability to reinvent their stuff from scratch.
-The advantage to the specialized stuff may not be as large as you'd think. If it's super expensive and can be replaced by flexible commodity stuff, that might be cheaper even if there's a small loss of performance. Or the flexibility might allow you to attack the problem in a new way, that the incumbent is too specialized to do, and ultimately you outperform the incumbent at a system level without ever really equaling them at what they specialized at.
-Crossing organizational boundaries pushes the agreed behavior between different components into actual legal contracts. The different organizations may have non-aligned incentives. If you want to change stuff now lawyers are involved.

This, to me, is how I think SpaceX has arrived at the cusp of credible first stage reuse and maybe more important firsts than that, with staged combustion and other such advancements being a distant trailing indicator.

[QuantumG]

This seems like the thread for this nice little article:

http://www.businessinsider.com.au/how-elon-musk-learned-rocket-science-for-spacex-2014-10

I'm usually bored half way through stuff like this, but that was quite readable.

[jeff.findley]

It's hard to argue with his accomplishments so far.  When Elon Musk started SpaceX, I'm not sure anyone outside of the company expected much.  After all, look at how many failed space start-ups have failed over the years.  Some go completely out of business, others abandon "revolutionary" ways of doing things and eventually start to look a lot like an "old space" company (e.g. Orbital Sciences Corproation), wile others continue to exist, but never seem to live up to their lofty goals.

[go4mars]

It's hard to argue with his accomplishments so far.  When Elon Musk started SpaceX, I'm not sure anyone outside of the company expected much.  After all, look at how many failed space start-ups have failed over the years.  Some go completely out of business, others abandon "revolutionary" ways of doing things and eventually start to look a lot like an "old space" company (e.g. Orbital Sciences Corproation), wile others continue to exist, but never seem to live up to their lofty goals.

True, but some have always had high expectations after hearing some good things.  Such as "first principles approach, full and rapid reusability, iteration toward BFR, Colonization of Mars, etc."