Tesla has reportedly eliminated its PR department — a first in the automotive industry.
The Public Relations Society of America called the decision “alarming.” Here’s what 10 PR executives had to say.
Alexander Kruse, VP, consumer, WE Communications
Tesla is a prime example of a brand navigating complex challenges at the intersection of two incredibly fast-evolving industries: auto and tech. In these categories, communications teams play a critical and strategic role in helping to shape and maintain a brand’s reputation with both customers and its industries at-large.
While in the short term, rallying around one voice at the top can be effective in unifying a brand’s message, this approach is not without risk.
For a brand as visible as Tesla, misinformation and speculation can spread quickly and decisively. Without a strategic communication function to manage this, the risk of customer and industry confusion grows and can drive unwanted volatility around the business itself.
Katie Huang Shin, president, AxiCom North America
This is a lot more complex than meets the eye. Was communications ever ‘strategic’ at Tesla? And did the function earn a seat at the table? A truly strategic communications department goes beyond media relations or information dissemination. It supports the company’s business objectives, protects its brand and reputation, mitigates and prevents risks, engages the organization’s stakeholders and employees and helps bring its purpose alive. The pandemic has brought on profoundly unique challenges that many organizations have never experienced before. Amid this uncertainty, successful companies have prioritized communications vs. abandoning it. As we prepare for reentry and recovery, transparent and inspiring communication will be central to a distressed workforce's health and well-being.
James Wright, global CEO, Red Havas, and global chairman, Havas PR Global Collective, Red Havas
It’s a business that is used to breaking the mold and attempting firsts. With such a high-profile CEO, most of the big news coming from Tesla comes from Elon Musk, very often via his Twitter. The concern here is how to get accurate information speedily from the business, where we have seen numerous unofficial information or rumors doing the rounds before eventually being confirmed or corrected. Musk has criticized the media previously in terms of their reporting, but they aren’t there just to tout the good news. Whether this is good or bad, we will soon find out; it depends whether this is a genuine move to disengage from the media or whether the communications function will move to other departments and be integrated. But the fact that it is not clear, and that we don’t know, probably speaks for itself.
Matt Burns, VP, head of communications, Grail, and former VP, external communications, UnitedHealth Group
PR department or not, the company will continue to communicate with its stakeholders. Time will tell whether it’s good business practice to broadly disintermediate traditional media from a company’s external communications. The reality is, brands have been moving toward ‘hybrid’ models for years, relying less on earned media and shifting dollars to owned channels.
All of this said, organizations‘ need for, and employment of, communicators with strong business acumen doesn’t disappear with the ‘PR department.’ Those people probably just get dispersed with new aliases in the org design equivalent of a witness protection program.
Eric Hollister Williams, managing principal, Precision Strategies
Tesla’s move dissolving its PR shop really isn’t a surprise based on how little it engages the media these days. One might call it Trumpian. A few things come to mind though. First, Tesla doesn’t need a PR shop to make big, bold and highly successful moves. They’ve cornered the market on that already. Where I think having a well-staffed PR team in place comes into play is for crisis and being able to respond in real-time to unforeseen challenges. While companies usually hire outside firms to address crises, there needs to be a competent internal team to lead and manage unplanned investor worrying events – again, something Tesla knows a bit about. The other thing in-house PR gets you is stakeholder relationship-building that comes with consistent engagement versus one-off events or stunt communications. But let’s be clear, in order for any of this to work, it means the CEO and founder needs to be bought in and supportive. It’s clear by his move that PR in its traditional form does not have Mr. Musk’s support.
Aaron Kwittken, chairman, KWT Global, and CEO, PRophet
The move feels a bit Trumpian and misinformed and likely reflects a deity-driven culture at the company that places mystique and opaqueness over communications and transparency. Trailblazers like Tesla have an even greater responsibility to have journalists report, question and analyze the company’s progress and setbacks, especially being publicly traded.
Jennifer Hallahan, director, communications and marketing, Union Square Advisors
With a dynamic CEO, who is often outspoken on a number of topics beyond electric cars, eliminating Tesla’s PR department and its most senior trusted comms advisers is a mistake. The main point I’d make is that while PR is a tool for raising visibility, it is even more important for use as a tool for reputation protection and management. Having a senior PR adviser or advocate on the side of its founder and Tesla, the company, is essential.
Dan Rene, MD, KGlobal
While my position as a communicator makes me biased, abolishing a communications department without another plan in place can be dangerous. Effective delegation is the foundation for strong leadership. Leaders need strategic communicators to help them achieve business objectives. Without a PR department, leaders’ ‘to-do’ lists get longer, distractions increase, message discipline fails and reputations suffer. PR departments do much more than the tactics of engaging with the media, they contribute to the achievement of company objectives when performing strategically.
Stephan Koller, president of Koller Communications
This might be news to Tesla and like-minded organizations: PR pros build trust in leaders, companies, technologies and markets. They motivate and inspire vital stakeholders to act, including employees, customers, investors and suppliers. It takes great skill, expertise and experience to succeed in what we do. Simply let PR experts handle PR.
Jon Amar, CEO, Vetted
Elon [Musk] just shined a spotlight on the future of public relations. As the chief executive, he can single-handedly generate significant publicity without the help, or cost, of an entire department. We've seen it time and time again. There's no doubt that his PR department provided value over the years, but this present moment doesn't require them. I think it's a short-term play. Elon knows how to play the media game, and he'll know when to bring back the department. I think more companies will follow suit, whether it means shedding their internal PR team, outsourcing to less expensive boutique firms or freelancers or going it alone.