Burning the Nest

Burning the Nest


  • Decision-making before discussing strategy can lead to costly consequences
  • Understanding your organization’s “why” will help you identify and mitigate any potential risks
  • The Law of 3’s plan design can help protect you from making rash decisions


Elon Musk is one of the biggest celebrities on the planet, and currently the world’s richest person. He gained this status through a variety of innovative ventures, including the companies he’s best known for: PayPal, Tesla and SpaceX. His most recent venture, the purchase of Twitter and subsequent moves, have sparked conversations around the world. 

But is his strategy sound? 

Strategy requires clarity. That’s why it’s essential to establish visibility and alignment on an organization’s “why” before digging into strategic planning. Once the “why” is established, the next critical step is identifying the organization’s big goals over the next three years. 

Throughout the acquisition process, Musk has been vocal that he wants Twitter to become a beacon of free speech, and that he can lead the company more effectively than previous executives. He has failed, however, to clearly state Twitter’s “why” or paint a clear picture of what he hopes to achieve over the next three years. By skipping over these critical steps, Musk has set off a flurry of problems which threaten to significantly damage the social media platform’s future profitability and viability.

Problem #1: Alienating Key Stakeholders

Musk has openly stated that Twitter has seen a “massive drop” in advertising dollars since his takeover, recently being quoted saying the company is losing “over $4 million a day.” Top brands including General Mills, Pfizer, Audi, Chipotle, United Airlines, and more, have stopped advertising on Twitter since Musk took over, citing concerns about increasing hate speech and misinformation on the platform. Losing these dollars is a massive blow to Musk, who spent a hefty $44 billion to acquire the platform in the first place, and will need to continue to keep the company profitable enough to meet its debt payments.

Problem #2: Action Without Alignment to Long-Term Vision

Upon taking control, Musk wasted no time before making massive personnel changes at Twitter. He fired several top executives (including CEO Parag Agrawal) and laid off approximately 3,700 employees, which accounts for roughly half of Twitter’s workforce. These layoffs contributed to the aforementioned advertiser exodus, as concerns arose around a high percentage of the content moderation team being let go. To make matters worse, Twitter is now asking dozens of laid-off employees to return to the organization. Once again, it’s clear that they took action without the proper long-term vision in mind.

Problem #3: Lack of Risk Mitigation Strategies

In a bid to generate cash flow, Musk introduced the opportunity for account owners to gain the coveted “verified’ icon on their profiles by paying an $8 fee. 

To give some background here, verification symbols are critical to the flow of information on Twitter, as they signify the person behind an account is exactly who they say they are. For instance, when an account with the name “City of Vancouver” tweets, the verified symbol affirms that the tweet is coming from the actual City of Vancouver and not someone imitating them online. Verification has allowed users to quickly ensure the account is authentic.

Twitter Blue, Musk’s new system, offered anyone the chance to be verified as long as they pay the $8 fee. The only caveat now being that accounts attempting to impersonate someone must clearly state the account is a parody. Unfortunately, Twitter’s significantly leaner workforce is already stretched too thin to be looking for offenders of this new policy. 

Unfortunately, Musk didn’t realize the problems this lack in authentication would cause when he initially rolled out the new system, leaving him scrambling and retracting previous decisions as things got worse. The debacle has created some funny moments so far, though, including a seemingly real announcement from the most famous athlete in Canada:


Or this seemingly harsh statement from Ontario Premier Doug Ford:

However, possibly the most costly impact this situation has had involved Eli Lilly, a pharmaceutical giant that sells insulin in the US. A fake account purchased the $8 verified blue check and impersonated Eli Lilly’s name and logo. They then tweeted: “We are excited to announce insulin is free now.” This tweet remained up for hours and left Eli Lilly’s officials scrambling to get it removed. By the next day, the company’s  stock dropped 4.37%, erasing over $15 billion in market cap, according to Times Now. Eli Lilly has since ordered a stop on all Twitter ad campaigns and activity, costing Twitter millions.

Removing the proven system for authentication on Twitter created a situation that was ripe for misinformation to spread like wildfire, exacerbating an already significant problem on social media sites. However, this debacle could have been avoided if Musk had paused before taking action to identify and mitigate any potential risks.

How to Avoid Musk’s Pitfalls

The above examples are a few areas where Musk dove head first into ideas without considering the broader implications. While this is a particularly spectacular example, it’s something that happens regularly in business. Times are tight, and there’s pressure on the CEO from shareholders and stakeholders to make some big moves quickly, forcing them to jump into new initiatives without thoughtful planning and risk mitigation techniques. The challenge is that this approach neglects proper consideration of the externalities that will spin out of these initiatives. 

So what is the learning takeaway from Musk’s mistakes? We’ve seen how quickly situations can devolve when major decisions are made without proper planning, and how costly those mistakes can be. So how do we protect ourselves against making rash decisions?

We do this, first, by understanding why our organization exists, our “why.” This process provides clarity and understanding on the importance of the organization and what it stands for. With that visibility in mind, we can begin working on our long-term strategic planning. We do this by using our Law of 3’s exercise.

The Law of 3’s strategic planning approach guides you through creating a strategic 3-year plan. In this exercise, you’ll create Big Goals, Step Goals, and Actions.

Big Goals are usually qualitative and aspirational in nature. These are what you need to accomplish by the end of the three years.

Step Goals are created for each Big Goal, typically three each. These are initiatives that support the completion of each Big Goal, and are usually quantitive in nature. These activities will be completed within a year. You’ll create new ones each year.

Actions are created for each Step Goal, breaking down and identifying actions you’ll take to achieve the goal before the year is done.

Once you have completed all of the above steps, you’ll have a detailed strategic plan ready for execution.


For example, part of Twitter’s Law of 3’s plan could have looked like this: 

“Why”: Twitter exists to enable the free sharing of information and ideas. 

Big Goal 1: Increase profitability 

Step Goal 1: Improve staff engagement scores by 33%

Step Goal 2: Increase average advertiser spend by 15%

Step Goal 3: Generate average revenue of $8 per Twitter user

From there, each of the Step Goals listed above would include one to three action items identified to achieve the Step Goal. 

Upon achieving all three step goals, Twitter will have met their first Big Goal of increasing profitability. 

Wrapping Up

It’s hard to argue with some of Elon Musk’s past success. He’s the richest man in the world, and will go down in history as one of the greatest innovators of his generation. With that said, Twitter appears to be in a very difficult spot due to some poorly considered moves he’s made since taking over, and he is now in need of a clear, actionable plan to reverse course. The Twitter nest is on fire, and a well-designed strategy is the extinguisher that Musk requires.

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