In an effort to cut back on spending for the production of Tesla’s Model 3 sedan, CEO Elon Musk revisited his favorite ancient Greek philosophy: first principles.
The term was coined by Aristotle more than 2,000 years ago. The idea is that we gain valuable insights by breaking a subject down into its core parts rather than approaching it based on common knowledge, according to CNBC.
It’s an idea Musk has been championing for years. “The normal way we conduct our lives is we reason by analogy,” Musk said in a 2012 interview with Kevin Rose. “We are doing this because it’s like something else that was done, or it’s like what other people are doing. With first principles … you boil things down to the most fundamental truths … and then reason up from there.”
Musk referenced this strategy in an internal email sent to Tesla employees, saying he’s going to be “far more rigorous about expenditures” moving forward.
“I have asked the Tesla finance team to comb through every expense worldwide, no matter how small, and cut everything that doesn’t have a strong value justification,” he wrote. “If you are the manager responsible, please make sure you have a detailed, first principles understanding of the supplier quote.” These actions are meant to rid the company of its unproductive parts, so efforts can be redirected toward Tesla’s most important goals.
To further increase efficiency, Musk also offered employees some productivity tips in the email. He suggested walking out of meetings “as soon as it is obvious you aren’t adding value” and getting rid of acronyms, because people shouldn’t have to “memorize a glossary just to function at Tesla.”
The billionaire entrepreneur has turned to the first principles philosophy many times before. And he’s not the only one who’s used it to grow a business. Netflix CEO Reed Hastings also tapped into ancient wisdom for guidance when he first joined Netflix. According to CNBC, he recognized that Netflix had to grow beyond DVD rentals to stay relevant, so he hired innovative, first principle thinkers, who helped the company conquer the streaming industry.
“We ask people to do what you would think is best for the company. We don’t give them any more guideline than that,” Hastings said on the podcast, “Masters of Scale.”
As both of these successful business leaders demonstrate, sometimes you need to go back to basics, find the heart of the issue and start again.