Alan Mulally arrived at Ford in September 2006 and began running the same meeting every week. The same leaders, the same charts, and every project on them marked red, yellow or green. The company he had joined had already mortgaged almost everything it owned, including the blue oval itself, to raise about $23.5bn. It would close the year with a loss of $12.7bn, the deepest in its 103-year history.
Yet, week after week, every chart was green.
Let’s have a quick detour to how people decide what not to tell the person above them.
James Detert and Ethan Burris surveyed 3,149 employees and 223 managers across 105 restaurants in a single chain to find out what made people raise problems upward. What predicted whether employees spoke up was whether their manager was seen as open and whether it felt safe to be the person who said it.
Frances Milliken, Elizabeth Morrison and Patricia Hewlin reached the same place from the other end. They interviewed 40 employees about the things they had not told their bosses, and most of them described a situation where they were worried about something at work and did not raise it. What went unsaid included process problems and doubts about a colleague’s competence. The most frequent reason they gave was the fear of being viewed or labelled negatively, and of damaging a relationship they valued.
The two studies describe the same thing from opposite ends. People withhold bad news because of what they expect will happen to them when they do.
So the gap between a problem starting and you hearing about it is a measurement of you. Your team takes that measurement every time, and they recalibrate it on whatever you did last.
Those few seconds are the only part of this you directly control. Four actions, and the first one runs before you know anything at all.
The four actions
Say you are glad they told you. Ask three questions before anything else. Buy time in one sentence if you do not have the facts. Review what happened before you review who did it.
Four actions, in that order, and the first is the one your team will describe to each other afterwards.
1. Say you are glad they told you, before you say anything else.
Thank you for telling me.
That’s it. Say them in front of whoever else is there. Say them even when the person standing in front of you is the reason for the news, because the alternative teaches everybody watching to wait until they have a defence ready, and the wait is costing.
This is what Detert and Burris measured. In their data, openness was a set of first responses people could see. Thanking the messenger is one of them.
2. Ask three questions before you say anything.
What exactly happened? What do we know for certain? What do you need from me now?
Write them down. The questions aren't clever, and they aren't meant to be. Their job is to occupy the first thirty seconds after receiving the bad news.
Susan Ashford and Anne Tsui asked 387 managers what kind of feedback they went looking for, then asked 2,447 of their bosses, peers and subordinates how effective those managers were. The managers who sought out negative feedback were rated more effective. The managers who sought out positive feedback were rated less effective. The people around you can tell which of the two you are doing.
3. If you do not have the facts, buy time.
Say this:
I will come back to you by four, and before then I need to speak to two people.
Then keep to it.
4. Review what happened before you review who did it.
Any conversation about an individual’s performance happens separately and later, and everyone should know that before anything goes wrong.
Running the ‘what happened’ and ‘who did it’ discussions together means everyone present becomes their own defence counsel. You will get a defensible account instead of an accurate one, which is the only thing you need.
Where this goes wrong
The fix-it reflex. Your first instinct is to send an instruction. You have established no facts, and you have already committed to a remedy, which means the remedy is now yours and the problem is now solved in your head. The person who brought it leaves knowing you didn't hear the half they hadn't got to yet.
“Are you sure?” Disbelief reads as an accusation, however you intend it, because it asks the person to defend their competence. They will wait for certainty before they bring you the next issue.
The weather report. Your team works out what mood you are in before deciding what to raise. This one you cannot see, because by the time anything reaches you it has already passed the test.
The instant answer. High stakes, incomplete facts, and you respond immediately to be seen to act. Then you reverse it. The reversal costs more than the delay would have, and it teaches the team that your first answer is provisional, so they stop acting on it.
The meeting that turned Ford
Back to the charts. At one of those early reviews, Mark Fields put up a chart with red on it: the launch of the Edge was in trouble. In Fortune’s account, “all the chairs moved away from me”. There was dead silence. And then Mulally started clapping.
Two things had to happen for that to work.
The format did the first. Every project carried a colour every week, so reporting trouble was a field to complete.
The applause was the first action in its crudest form: a signal that Fields had done the right thing before anyone knew what the Edge problem was going to cost.
By the end of 2008 Ford was the only one of the three Detroit manufacturers not to take federal money. Many things went into that, and I would not hang it on one round of applause. What the applause bought was time. Ford knew about the Edge in the week the problem existed.
The two seconds before you speak
You might be thinking, “This is not me. I do not shoot messengers.”
Nobody sets out to. The word “shoot” is what lets you off, because you have never shouted at anybody, so the description does not fit. The question is not whether you raised your voice. It is what your face did in the two seconds before you spoke, and whether the next thing out of your mouth was a question or an instruction.
Of course some of this is temperament, and some people are steadier than others. The first response is still a habit, and habits can be trained.
Take ten minutes
Review the next three big problems that reach you. For each one, write two dates: the day somebody in your organisation first knew, and the day you found out. You can usually establish the first date with one question to one person (who will have been waiting for somebody to ask).
Now look at the three gaps.
If they are getting shorter, something you are doing is working, and you should find out what it is. If they are the same length every time, you are looking at your own steady state, and it won't change just because you noticed it.
So take the shortest of the three gaps and ask the person who closed it:
What made you decide to tell me when you did?
Then say nothing until they have finished.