Robyn Denholm: The Australian executive ‘hand-picked’ by Elon Musk to replace him as Tesla chair
Tesla chair Robyn Denholm takes after her boss, Elon Musk, in at least one way – the Australian is fearless when it comes to risk.
Robyn Denholm, the Australian chair of Tesla, takes after her boss Elon Musk in at least one way – she’s fearless when it comes to risk. Here she talks frankly about her “zigzagging” rise to the top, how there’s never a dull moment when working with the controversial billionaire, and why Australia needs to take more chances in business if it means to thrive on a global stage.
It is the $1 trillion global colossus that Robyn Denholm calls a “proverbial underdog”.
Denholm is talking about Tesla, the electric vehicle and battery company that the Australian technology leader chairs.
The business founded and run by chief executive Elon Musk, probably the world’s most famous entrepreneur thanks to not only Tesla but personal investments such as his $US44bn ($67bn) purchase of Twitter (now X), his SpaceX rocket venture and his current status as the richest person on the planet.
It is now almost a decade since Denholm joined the Tesla board in 2014 while working in Silicon Valley as executive vice-president of software firm Juniper.
As with just about anything associated with Musk, there has generally not been a dull moment for Denholm at Tesla, which she became chair of in 2018 (succeeding Musk in the role) after returning to Sydney and being five weeks into a new position as Telstra’s chief financial officer.
Her elevation also came after Musk reached a settlement with US regulators regarding tweets he had posted saying he’d received offers to take Tesla private, which violated securities laws.
Denholm is generally reluctant to talk in much detail about Musk, but admits to The List that waking up each morning to the latest headlines her CEO has attracted on the other side of the world can be somewhat enthralling.
“There’s never a dull moment. Isn’t there a proverb about how you’re blessed if you have an interesting life? I have an interesting life,” Denholm says dryly.
“The relationship between the chair and a CEO I think is a very important one. So I don’t tend to talk about that publicly.”
Denholm has had to talk about Musk in several US court appearances though, including a lawsuit that challenged the massive share options package that made him the world’s richest person and was approved by Denholm and the Tesla board.
A lawyer for dissatisfied shareholders told a Delaware court in February that Denholm had been “hand-picked” by Musk to become Tesla chair and within a few years of joining the board had become “screamingly and dynastically rich” from her own Tesla share options, some of which she has subsequently exercised and sold.
Denholm told the same court last November Musk had the “vision and tenacity” to turn Tesla from a start-up into one of the world’s biggest companies and that he would “do whatever he needs to achieve the results”.
More recently, Tesla directors agreed to return $US735m ($1bn) in stock awards and cash to settle a lawsuit brought by other investors accusing them of improperly awarding themselves big compensation packages.
The constant swirling of controversy around Musk and by association Tesla, including the numerous lawsuits, may then partly explain why Denholm stops short of even uttering the billionaire’s very name.
In the context of Tesla at least, Denholm is happy to talk about risk. How risk is a good trait for a founder and companies. Why she thinks Australia has become a little too risk-averse. The risks she has taken during her own career. Why one shouldn’t be afraid to fail, and how risk leads to much-needed innovation.
Also, how to maintain that culture of innovation the older a founder and company, in this case one that is so closely identified with Musk and his boundary-pushing founder mentality, gets. And why she thinks Tesla is that “underdog” given it is at the vanguard of the push towards mass adoption of electric cars, even with market capitalisation of more than $US800bn ($1.2 trillion), as well as how a company like Tesla represents a “new form of capitalism”.
“(Tesla) is the proverbial underdog because, you know, the reality is it’s a whole industry that it is trying to influence and change and the world’s penetration of electric vehicles is still relatively low,” Denholm says.
“And (it is) the same on the sustainable energy side, because Tesla’s mission is to accelerate the move to renewable and sustainable energy for the planet. And we’re still really in the early phases of that.”
Denholm points out that when she joined the Tesla board in 2014, “most people didn’t think the company was going to survive, let alone thrive”.
There’s been some tough times along the way, including Tesla racking up a combined $US5bn ($7.6bn) in losses between 2015 and 2019 before breaking even the following year and producing a bumper $US12.6bn ($19bn) profit in 2022.
This is a feature from The List: 100 Innovators 2023, online and in The Australian on Friday, September 15.
Denholm says the company’s progress has been supercharged by having a founder and people across the business property who are prepared to take risks.
“Whether that’s on the engineering side, the business side, the societal side, the board side, you’ve got to have people who are willing to do that. I don’t mean take uncalculated risks or do things that are completely crazy, but to me most risks are worth taking. If nothing else, you’ve learned from them.
“It has also benefited by having a clear goal on what it wants to achieve – the want to influence and change the car industry and move to renewable energy across the world – and also the fact that the goal is massive.”
Given that mission, Denholm says, is bigger than the company itself, means that the focus on achieving the mission leads to it taking calculated risks to actually achieve its goals.
“And that’s really part and parcel of the new wave of companies that are coming through. I think they (Tesla) are probably one of the best examples of it, but there are many others as well.
“Where the purpose of the company is far bigger than the company itself; to drive some sort of change in the status quo and really put large objectives out there – and I think that’s healthy.
“I think it’s the new form of capitalism, I like to call it, because it’s good companies doing really good things and it’s a virtuous cycle because those companies then prosper and they’re able to actually create that change for everybody.”
Denholm herself has taken plenty of risks during her career, having grown up in Sydney’s working-class southwest as the daughter of parents who bought a petrol station when she was aged seven.
She would spend plenty of time working there as a teenager and then while studying economics at the University of Sydney.
Denholm worked at accounting firm Arthur Andersen after university and went on to become national finance manager at Toyota’s Australian business. Her Toyota stint lasted seven years, after which Denholm moved to technology business Sun Microsystems, firstly in Australia running the finance team, then Colorado and later in Silicon Valley.
She had moved to the US in 2001, a newly single mother with then 13 and eight-year-old children and heading to a job she wasn’t sure she could do – but Denholm would rise through the ranks to eventually become chief operating officer.
“I’ve got a background in finance and ops but basically I’m not afraid to take risks, particularly career risks,” Denholm says. “You’re not going to find me jumping out of a plane or skydiving … but from a business point of view, my view is you assess the risk and, if you can live with the consequences of something not going right, then you go for it.
“I often say it is worse not to take a risk than to take a risk and fail, you’ve always learnt something. If you don’t take the risk in the first place, then you won’t have learnt anything.”
A turning point would come when Denholm missed out – as the only internal candidate – on a promotion to a role as Sun’s chief financial officer. At the time, Denholm admits to being devastated. But after a couple of weeks, her then-CEO told her he wanted her to stay at Sun and could choose what she wanted to do.
So instead of leaving and seeking a similar financial role at a new company, Denholm headed up strategy and strategic planning for Sun for two years at a time when management was attempting to turn the company around.
“I like learning new things,” she says. “I bore easily if I have to do the same things. I will do them, but I’d rather be learning something new than doing the same thing over and over again.
“So it was a great learning (experience) for me. You don’t necessarily have to go up vertically in a career, that a zigzag approach or lattice approach can be very fulfilling and for me it has been. I’ve moved industries, I’ve also moved roles and I’ve zigzagged my way through this strange career.”
After Sun, Denholm worked at Juniper for nine years before moving back to Sydney to join Telstra, but would leave her position of chief financial officer after serving out a six-month notice period in May 2019 due to taking the Tesla chair role.
At the time, Denholm admits to being unsure about whether she could do the Tesla job from Sydney in those pre-pandemic days, but took it and was travelling to the US twice each quarter before Covid-19 hit. The Tesla board now mostly meets remotely.
Denholm has also become an operating partner of venture capital fund Blackbird and has joined the board of several Australian technology companies, including the workplace-safety-app-unicorn SafetyCulture and Harrison.ai, a Sydney healthcare start-up.
She also chairs the Tech Council lobbying group for the technology industry, which was launched in 2021, and features a board of luminaries including billionaire Atlassian and Canva co-founders Scott Farquhar and Cliff Obrecht.
Denholm admits she likes the more “collegiate” nature of the Australian tech scene compared to cutthroat Silicon Valley, but is also concerned that Australia has had it too good for too long in an economic sense and that it may have become a bit too risk-averse as a result.
“I grew up in Australia in the ’70s and ’80s and our risk appetite was much higher then. I think 30 years of uninterrupted economic growth has muted that risk appetite. Growing up you always knew someone having a go at something or taking on a small business.
“When I came back to Australia in 2017 what I found, and maybe it was because I was also joining a large corporate and so spending a lot of time with the larger companies in Australia, was that the risk appetite was dialled down.
“I wouldn’t say it was a fear of failure, but more about why we couldn’t do something as opposed to why we should.”
Denholm says Australian business needs to consider failure a “stepping stone to success”, particularly in the technology sector or in innovative firms. “If you’re not failing, you’re actually not pushing the envelope far enough or fast enough.
“And so, my view is that permission or that ability to fail actually enables you to take more risk because you feel protected and safe as opposed to, you know, ‘if I fail, I lose my job’ or ‘I fail I lose everything’.”
She says that mentality is still the main difference she sees between doing business here or in the US, where founders “pick themselves up and actually try again. That is still a muscle we are developing in Australia.”
Part of her role at Blackbird is helping some of the founders in the venture capital firm’s portfolio build out the basics of their business, the typical things a company has to put in place to get bigger, such as hiring staff, figuring out what drives more revenue, review strategy, communications and so on.
Denholm says there is a level of “maturity” among many of the founders who can now base themselves in Australia and build a global business from here, but there are still some systemic issues holding back the wider technology industry.
One is getting more women into the sector. She says diversity of thought is a crucially important factor in fostering innovation.
“My big thing is pathways for women into technology. I think firstly, awareness of the great roles that you can have not necessarily just in the coding side, but in other areas within the technology industry will help.”
Another is finding good talent. The tech council has a target of having 1.2m workers in the sector by 2030 and Denholm wants greater discussion of retraining programs and digital apprenticeship programs for people who have gone into a different industry earlier in their careers.
She gives the example of lawyers making “brilliant” cybersecurity analysts because of their attention to detail and the questioning of whether something is right or not. “It’s the same set of skills just applied to a different problem.”
Denholm again harks back to her own experience. “I didn’t get into tech until I was 33, and I’d been working for 12 years then, so a lot of people would have said ‘oh you can’t change industries’ then.
“Yes, you can though. As long as you’re willing to learn about that industry and that set of disciplines.”
Or, put another way, take some risks.
The List: Top 100 Innovators 2023 launches online and in The Australian on Friday, September 15.
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