In a wide-ranging discussion at the Air Warfare Symposium held by the U.S. Air Force, Elon Musk touched on some old and new themes, but one highlight of the discussion was the small window into hiring and firing practices at SpaceX — arguably one of the world's most demanding engineering companies.
The company prides itself on innovation, and, for its chief executive officer, that apparently extends to the interview process itself.
"[When we] interview people we ask for some evidence of exceptional ability that includes innovation," says Musk. "At the interview point we select for new people who want to create new technology."
The mercurial chief executive didn't elaborate more fully on what proof of innovation looks like in the interview process or in an applicant's previous work, but it's an interesting bullet point on the company's practices.
And the emphasis on innovation extends to the company's incentive structure, advancement decisions and ultimately how long someone will remain at the company, Musk said.
"Incentive structure is set up that innovation is rewarded and making mistakes along the way but failure to try to innovate comes with a big penalty," Musk said. "You will be fired."
It's not just a failure to innovate, according to Musk. If the employee's "innovations aspirations are not very good, they will no longer be at the company."
This emphasis on innovation is critical for companies and nations to remain ahead of their competition. Musk said he doesn't necessarily worry about intellectual property theft at either Tesla or SpaceX because hopefully the companies are developing technologies that are at least three years ahead of the competition.
"The way you achieve intellectual property protection is by innovating fast enough," says Musk. "Speed of innovation is what matters. I do say this to my teams quite a lot. Innovation per-year is what matters."
Although a company like IBM, with a massive patent portfolio and thousands of innovations locked in its laboratory might take issue with the sentiment, Musk says his point extends not just to companies, but to competing nation-states too.
Specifically, Musk mentioned the need for innovation if the U.S. is going to compete effectively against China, a country that could have an economy twice to three-times the size of the United States in the coming years.
"The foundation of war is economics," Musk said. "If you have half the resources of the counterparty then you better be real innovative because [otherwise] we’re going to lose... The U.S. will be, militarily, second."