The Algorithm: The Five-Step Framework That Drives Business Success

From a former President of Tesla, Jon McNeill, comes The Algorithm—the first book written by any of Elon Musk’s direct reports—a transformative guide for leaders, entrepreneurs, and innovators who want to emulate the paradigm-shattering approach used to launch Tesla and SpaceX to success. And that transformed Lululemon and General Motors.

McNeill had already founded and sold six startups when Sheryl Sandberg introduced him to Elon Musk, who was looking for help at Tesla. McNeill was steeped in the lean principles that had made Toyota a global powerhouse—principles focused on achieving efficiency and optimization by incrementally improving existing systems and processes. What he learned at Tesla was an approach that required radical rethinking to explode the status quo, attack complexity, and set seemingly unrealistic goals. Elon Musk at Tesla called this five-step framework “The Algorithm.”

1. Question every requirement – “Question everything—from product requirements to human-resources policies to sales methods. Everything. Only then can you spot which rules and regulations are necessary, and which others are enshrined by tradition” says McNeill.

2. Delete every possible step in the process – Ask if you really need each task. Ask if you can combine tasks. “By making the effort to see your business through the eyes of the uninitiated, you can start to ask, again and again, the most important question in the Algorithm: Why?,” shares McNeill.

3. Simplify and optimize – The goal of this step is to get rid of almost all of the steps in the current process as possible. Strive to create a process that is fast and repeatable, which is core to optimization.

4. Accelerate cycle time – “Aim for 50 percent increases in speed each week. As a leader you can take any process, speed it up and then watch where it breaks. This will show you where to focus,” says McNeill. “A process can go only as quickly as its slowest step. Working on that faulty step speeds up the entire process.”

5. Automate – Hold off coding software until the end, and after you’ve designed a new, simplified process, optimized it, and know exactly what you want. The coding will go much faster if you have the discipline to wait according to McNeill.

“The Algorithm features a set of best practices, yet one overarching idea infuses them all,” explains McNeill. “Question the status quo. The more entrenched the norms, the greater the chances that people haven’t questioned the assumptions behind them for a long time. This is where the question ‘Why?’ becomes important. The simple questioning of the status quo is fundamental both to the Algorithm and to business improvement and discovery.”

Since McNeill’s departure from Tesla, he has used The Algorithm in every enterprise he has worked with to supercharge speed, efficiency, innovation, and growth. Featuring case studies from Tesla and SpaceX, as well as from Lululemon, GM, and companies of many sizes across industries, he reveals in the book how any business can do the same and achieve the unimaginable.

Jon McNeill

McNeill is the co-founder and CEO of venture capital firm DVx Ventures. A serial entrepreneur and business leader with a proven track record of boosting revenue and scaling companies, he served as the president of Tesla, Inc., and the COO of Lyft.

McNeill currently holds positions on the board of directors of General Motors, CrossFit, and Lululemon, among others.

Thank you to the book’s publisher for sending me an advance copy of the book.

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