David Michels: Red Is Good

In many companies, employees will avoid delivering bad news to the higher-ups. However, talking about challenges can lead to growth and progress. David Michels, who leads Bain's Results Delivery® practice in Europe, the Middle East and Africa, outlines how company leaders can create an environment in which real issues are addressed and dealt with.

Read the Managing Change Blog post: Red Is Good—Why Smart Leaders Question the Green in Performance Dashboards

Read the transcript below.

DAVID MICHELS: So I recently asked a worried executive who's going through a major change program, "How are things going?" His answer to me was, "Well, Dave, if I look at my dashboards, it's a sea of green. So ostensibly, everything is going great. But you know what? I don't believe it for a second."

Now, this issue of false greens happens all the time. And we understand from the world of behavioral science that there are powerful incentives, often subconscious, that drive employees to avoid communicating bad news. [What] we often don't talk about enough is what leaders can do to address this and create the kind of environment in which the real issues, the unvarnished truth, is put on top of the table in a way in which leaders and management teams can actually address it and deal with it.

What leaders need to do, which at first feels sometimes a bit counterintuitive, is adopt what we call a "red is good" posture. What do I mean by that both in terms of words and actions? Imagine if you started out an update meeting saying something like the following: Look, the initiatives that we're discussing today are absolutely mission-critical, and they're hard, and I know that at any given point in time, that there is going to be...implementation challenges that we face and that we're going to need to figure out how to address. I want to use this meeting to harness the brain power here that we have in the room to figure out what our top three challenges are at the moment that are holding us back from moving faster, and I want to put them on top of the table and address them.

Now, if you did something like that and backed it up with action, like, for example, the first brave person who brings a "red" to you—instead of hitting them on the head with a 2-by-4, you thank them for doing that and say, "OK, excellent." Now, instead of having these issues underneath the table, they're now on top of the table so that we can actually do something about them.

Read the Managing Change Blog post: Red Is Good—Why Smart Leaders Question the Green in Performance Dashboards