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Engines of Change: Tesla is Challenged

Tesla’s share price dropped 13% over last week, in what was the stock’s worst week in roughly 18 months. The low represented an 18% drop in just a month. This loss has been chalked up to a variety of factors, including missed numbers and a poor showing in a safety test.

In addition to these factors, however, Tesla also faces two more significant challenges that likely fed into this plunge in value: a production bottleneck and renewed competition from entrenched automakers. What can we learn from Tesla’s current position when it comes to managing critical infrastructure?

 

The early bird gets the worm, but can it keep it?

Early adoption can lead to quick wins, but a business that cannot grow at the right pace won’t be able to sustain those wins (or add to them). Tesla carved out a large portion of the electric car market by being quick on the uptake, but its most recent earnings call points to the danger of a poorly-managed expansion, in which they said a “severe production shortfall of 100 kWh battery packs, which are made using new technologies on new production lines” was to blame for a 12% drop in earnings.

Production hiccups can derail any operation, and this also is true when it comes to the generation and storage of content.

Think of SharePoint (or any content management platform) like a giant, empty warehouse. When it is time to stand up a new site, does it make sense to just start loading content in? Or does it make sense to designate where that content should live, who is responsible for it, and how it moves throughout the storage facility? Unlabeled filing cabinets are simply places to store clutter.

When a business needs to grow (to a new brick-and-mortar location or to a new way of storing digital content), planning and intentionality are critical to successfully integrating this new component into how the organization works. Always consider capacity, materials (i.e. software), and process, or your vision will rarely line up with your results.

Enter competition

Capacity and workflow issues are the last things that come to mind when one thinks of Volvo Cars, which makes their announcement that all Volvo vehicles will be hybridized or completely electric by 2019 sound like an invasion declaration. Can Tesla sustain their market share when a 90-year-old organization with a well-developed infrastructure is looking to out-innovate them?

Some are calling this a publicity stunt on Volvo’s part, while others are impressed by the risk inherent in the strategy. But as The New York Times reports, Volvo CEO Hakan Samuelsson says “a much bigger risk would be to stick with internal combustion engines.” In recognizing the danger of failing to adapt (whether it be to changing market forces or content management paradigms), Volvo signals that they are worthy competition for Tesla.

Likewise, Gimmal finds using traditional ECM platforms to be far riskier than managing content and records within the Microsoft ecosystem. All the pieces needed to automate processes and ensure compliance exist – it is simply a matter of finding the right tools and fitting them together. What purpose would a diesel engine serve if you had an electric motor that could haul more for less?

Be early, be adaptive, be iterative

The early bird can keep the worm if he is aware of his surroundings and prepared to respond to threats from other birds. If Tesla can iron out production roadblocks and continue to refine its product, they have nothing to fear. If Volvo proves more agile and is able to leverage the scale of their production to undercut the smaller, younger company, the story may turn out differently.

Likewise, an honest assessment of the content management space in 2017 necessitates an openness to reevaluation. Are your bigger, older systems up to the task of managing content for a digital workplace, or are they choking on the fumes of document clutter?

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