Most organisations are bad at the same thing: hearing about problems while they’re still small enough to fix. The best cure I know of began with a round of applause in a Ford boardroom. In September 2006, Alan Mulally left Boeing to run Ford, which was on its way to losing $12.7 billion that year, the worst result in its history. Every Thursday he sat his senior team down for a Business Plan Review, where each executive colour-coded their projects: green for on track, yellow for at risk, red for in trouble. Week after week, the charts came back green. Mulally pointed out that you don’t lose billions of dollars on an all-green chart. Nobody budged. Then Mark Fields, who ran Ford in the Americas, put up a red slide. A fault had surfaced on the new Ford Edge just before launch, and he’d stopped cars from leaving the factory in Oakville, Ontario. The room went silent. At least one colleague assumed Fields would be gone within the week. Mulally clapped. “Mark, that is great visibility,” he said. “Who can help Mark with this?” One executive offered to send quality experts to the plant. Another offered to get on to the suppliers. The following Thursday, the charts were covered in red and yellow. Ford had exactly as many problems as the week before, and now its bosses could see them. Three years later, it was the only one of Detroit’s big three carmakers to survive the financial crash without a government bailout, and Fields eventually became CEO. Your office has a version of this. It’s the project that has been green on every status report since March and will turn red the week before launch. Project managers call it a watermelon: green on the outside, red all the way through. Nobody is exactly lying. They’ve just watched what happened to the last person who said “we have a problem”, and concluded that green is cheaper. The one key takeaway When someone brings you bad news, say thank you before you ask a single question. The first person to bring bad news sets the price for everyone after them. Mulally’s applause cost him nothing and changed what every executive brought to the room the following week. It also helps to read the numbers differently. In the 1990s, Amy Edmondson, now a professor at Harvard Business School, studied eight hospital nursing units, expecting the best-led teams to make the fewest drug errors. The best-led teams reported the most. They probably weren’t making more mistakes; they were the ones prepared to admit them. So when a new manager arrives, and the number of flagged problems goes up, that may be the best news the organisation has had all year. “Team psychological safety is defined as a shared belief that the team is safe for interpersonal risk taking.” Amy Edmondson, Psychological Safety and Learning Behavior in Work Teams, Administrative Science Quarterly, 1999 How to use this at work Give people the words in advance. Many hospitals teach staff a three-step script: “I’m concerned”, then “I’m uncomfortable”, then “This is a safety issue”. Each step turns the volume up, and everyone knows the third one means stop. Nobody has to invent a polite way to tell a senior surgeon he’s wrong, because saying the phrase follows procedure rather than starting a fight. The same idea works in a creative review or a client meeting: agree one phrase that anyone can use to slow things down, and agree it never needs justifying. Swap “any problems?” for “what’s worrying you?” The first question has a socially correct answer: no. The second assumes something is, which makes it far easier to say what. Add one column to the status report. Next to green, yellow and red, add “what would turn this red?” People who would never volunteer a red will happily describe one that hasn’t happened yet. Go first. Tell your team about something you got wrong recently and what you did about it. Teams copy what the boss does far more closely than anything the boss says. Move the bad news up the agenda. Make “what’s off track” the first item of the weekly meeting, rather than something squeezed in under any other business when everyone is tired and has one eye on the clock. Every time someone brings you a red, you decide what red costs on your team. Make it cheap, and the problems start arriving while they’re still small enough to fix. Want to go deeper This idea runs right through The Anti-MBA, our course with Professor Jules Goddard of London Business School. One lesson is exactly this: why sensible, considerate people keep quiet about what everyone knows, and how to make honesty less expensive than silence. And if your challenge is leading creative people, Creative Leadership with Sir John Hegarty and Cindy Gallop is a brilliant next step.