How Leaders Build Self-Aware Teams and Organizations - Part Four: The Bigger Picture

Insight: Why We're Not as Self-Aware as We Think, and How Seeing Ourselves Clearly Helps Us Succeed at Work and in Life - Tasha Eurich 2017

How Leaders Build Self-Aware Teams and Organizations
Part Four: The Bigger Picture

The truth is incontrovertible. Malice may attack it, ignorance may deride it, but in the end, there it is.


As Mike appeared in the doorway, his boss smiled warmly. Not only was Mike a brilliant and talented aeronautical engineer; he was the 25-year-old manager’s very first employee—and in a very short time, Mike’s boss had grown quite fond of him.

“Mike!” he said. “Great to see you. Come in. Do you have your latest coordination sheet for me?”

“I do,” said Mike, slapping the sheet onto the desk with surprising force. “But before you suggest any more changes, I just want to let you know that I’m quitting.”

Mike’s boss was stunned. He had worked hard to instill his attention to detail and commitment to excellence in this eager engineer, sparing nothing in helping Mike tackle all of the challenges their work presented. “Wh—what? Why are you quitting?” he stammered, his smile now replaced by a look of abject panic.

“Because you are driving me nuts!” said Mike. “This is my fourteenth round of revisions.”

“But I just want—”

“We’re at the point of diminishing returns here, sir.” said the young engineer. “I just think that it would be better for both of us if I moved on.”

Mike’s boss was shaken to the core. He could barely speak. “I would hate to see you go,” he pleaded. “Is there anything I can do to change your mind?”

But before his boss could even finish asking the question, Mike shouted, “No! I have to get away from you!” and left abruptly. My management career sure doesn’t seem to be off to a very good start, the rejected leader realized as he stared helplessly out the window.

A few days passed, and Mike’s now former boss asked if he would be willing to share what had gone wrong. And Mike did—in excruciating detail. Apparently, the young leader had a big problem. His nitpicking went beyond micromanagement: he seemed to think that his way was the only way. He’d been trying to teach Mike to think exactly like him, work exactly like him, and be exactly like him. Though Mike wanted to learn from his manager, he certainly didn’t want to become him.

Mike’s boss never forgot that feedback. Though it was hard to hear, it turned out to be the alarm-clock moment that marked the beginning of his incredible journey as a leader. You see, Mike’s boss was 25-year-old Alan Mulally, the unicorn and future CEO who would go on to save not just one, but two of America’s most iconic businesses: Boeing Commercial Airplanes and the Ford Motor Company.

In a 2012 commencement speech at his alma mater, the University of Kansas, Mulally coined a term for those moments of unexpected insight that challenge our beliefs about who we are. “A gem,” he explains, “is a learning that enables us to reevaluate what we’re doing.” And the gem he received from Mike that day was that it was wrong to try to make employees in his own image. That as a leader, his role wasn’t to control their every move, but instead to help connect them with the bigger picture, to give them the right tools, and to provide them the space to make mistakes but still hold them accountable.

Grabbing my arm and grinning as he recounted the story, Mulally exclaimed, “I was so lucky that Mike made me aware of this behavior so early in my management career! Can you imagine if no one had told me for years, or for decades? What a gift!”

Up until now, we’ve focused on self-awareness at an individual level. In this chapter, we’ll explore what self-aware teams and organizations look like, and what you as a leader can do to get yours there. As Alan Mulally learned at a young age, such teams start with a self-aware leader who makes a commitment to instill insight into the very fabric of the team and organization. Indeed, Mulally believes that this passion for creating collective awareness was one of the key factors in his immense success. As he told me, “Every time you learn something that isn’t working in yourself, your team, or your organization, you have a gem on your hands. Here is something we know now, that we can work on. I really can’t think of anything more exciting. If you don’t know what’s going on, that’s what’s really terrifying.”

This chapter will help you discover these kinds of “gems” in the team or company you lead, too. And even though we’ll focus on teams in a business setting, you’ll likely find other applications outside the workplace: your immediate and extended family, religious or community groups, school projects, PTA, garage bands, beer-league hockey teams, etc. (And by the way, if you’re not in a formal or informal leadership position, I’ll show you how to deal with unaware bosses and peers in the next chapter.) You’ll discover that no matter what kind of team you’re leading, whether you have one direct report or a thousand, you can’t create awareness by just waking up one day and deciding that everyone should be brutally honest with each other. In fact, without laying the foundation, you might find yourself with more trouble on your hands than you had to begin with. But while teams rarely start out self-aware, with the right ingredients, most can get there and reap the substantial rewards that such insight brings.


It was a chilly November morning in Dearborn, Michigan. As Ford executive Mark Fields walked into the Thunderbird Room on the 11th floor of the company’s world headquarters, he had, by his estimation, a 50-50 chance of walking out without his job as president of the company’s Americas region.

The year was 2006, and Ford was on the brink of bankruptcy. Saddled with sky-high cycle times, plummeting quality levels, astronomical labor costs, and rising fuel prices, Ford’s business model had become untenable. Unable to compete domestically or internationally, the company had lost a whopping 25 percent of its market share over the last 15 years. But these failings most certainly weren’t due to a lack of effort by the man in the top job.

Forty-four-year-old chairman and CEO Bill Ford had taken the reins four years earlier to try to save his great-grandfather’s company. He was sharp, self-aware, and possessed a humility and work ethic that belied his privileged upbringing. When he assumed his role in 2001, he’d promised that the company would hit $7 billion in profit in five years. But though he briefly got Ford back in the black that same year, by 2006, the company was facing its worst yearly loss in its history—almost $17 billion. After five years of herculean efforts (during which he never took a salary), Ford was finally forced to come face-to-face with the reality that he couldn’t save his beloved company on his own.

In truth, the organization’s problems ran far deeper than it appeared. It wasn’t just their flawed business model or inability to grapple with increasing global competition; these things were certainly issues, but they were merely symptoms of a larger ailment. As journalist Bryce Hoffman described in his superb book about Ford’s turnaround, American Icon:

[Bill] Ford found himself unable to overcome an entrenched, careerist culture that resisted all change and put individual advancement ahead of corporate success. In their dark-paneled offices, executives plotted ways to undermine one another’s efforts, while on the factory floor, union bosses jealously defended their members’ rich benefits and scoffed at attempts to boost productivity.

The company’s culture, in other words, was completely broken. And in July of 2006, Bill Ford announced to the board that he wasn’t up to the challenge of fixing it: “This company means a lot to me. I have a lot tied up in it. But the one thing I don’t is my ego…help me find a solution.”*1 Although his successor is credited with one of the most impressive turnarounds in corporate history, it was Bill Ford’s unflinching self-awareness that made it possible.

That help would come in the form of 61-year-old Alan Mulally, the then-president and CEO of Boeing’s Commercial Airplane division, a spirited, red-haired Kansan with a track record of technical excellence, bottom-line results, and most importantly, dramatic turnarounds. After 37 years at Boeing, Mulally had not only saved the company from near-bankruptcy in the aftermath of 9/11; he’d led their program to design the 777—the five-year, $5 billion project that single-handedly propelled Boeing ahead of its competition for years to come.

From the moment he arrived at Ford’s world headquarters on September 5, 2006, it was clear that Mulally was radically different from his predecessors. In an industry plagued by megalomania, secrecy, and paranoia, he was open, approachable, and completely unpretentious. He ate in the employee cafeteria and greeted strangers with a hug, a kiss, or a pat on the back. But those who confused Mulally’s agreeableness for weakness were quickly disabused of that notion. A friend of his once remarked, “Don’t mistake Alan’s smile for a lack of purpose or awareness. The man has a backbone of titanium.”

Mulally knew that the foundational challenge of Ford’s turnaround wouldn’t be improving fuel efficiency standards, or simplifying their product mix, or getting costs under control (though he would certainly do all of those things). Rather, it would be to start transforming the company’s secretive, change-resistant, siloed culture into a more open, collaborative, transparent one. And in his very first press conference as CEO, Mulally made it clear that under his leadership, the truth would be king: when asked what model of car he drove, he stunned reporters by replying, “A Lexus. It’s the finest car in the world.” (It’s worth noting that Ford’s executives didn’t drive Fords, either, stealthily parking their Jaguars and Land Rovers in the garage beneath the company’s world headquarters. They just weren’t admitting it to reporters.)

One thing was clear from the outset: if Mulally was going to transform his new company’s culture, he had to start with his executive team. The first change he introduced was a weekly meeting to review the status of the business, which he called the Business Process Review, or BPR. Replacing all other pointless and inefficient corporate-level meetings, the purpose of the BPR was awareness—to ensure that everyone knew the plan, the status of that plan, and the reality of the challenges the company was facing.

The BPR would be held on the same day and at the same time each week—Thursday mornings at 7:00 a.m.—and it would be mandatory for all members of the executive team. They’d review 320 metrics on everything from vehicle launches to revenue streams to productivity. Each metric would be assigned a color: green if it was on track, yellow if it had potential problems, and red if it had definite ones. Each of Mulally’s nine executives would have 10 minutes to deliver a succinct report on, as Mulally puts it, “their respective progress toward creating an exciting, viable, profitable, and growing Ford for the good of all stakeholders.” Mulally emphasized that this meeting would be safe—that no one should hesitate to surface problems and no one would be punished for telling the truth. There would be a learning curve, he told them, so if they didn’t know something, that was okay. “We’ll all be here again next week…and I know you’ll know it then.”

Ford’s first BPR took place on September 28, 2006. Mulally’s team had no idea what to expect as they nervously streamed into the Thunderbird Room, many with lieutenants in tow and all toting heavy three-ring binders. They took their seats at the large round wooden conference table, and Mulally called the meeting to order. First, he repeated his vision: People working together as a lean global enterprise for automotive leadership. To get there, he reminded them, everyone would have to be open about everything that was going on in their area of the business. “This is the only way I know how to operate,” he said. “We need to have everybody involved. We need everybody to be aware. And we’ll work together to turn the reds to yellow and then to green.”

Although early BPRs took as many as seven hours, by October, the team had settled into a rhythm. Unfortunately, however, the process still left something to be desired. Despite the fact that the company was at the risk of extinction, every chart that every executive presented in every meeting was green. This was, as Bryce Hoffman quips, “nothing short of bovine scatology.” Things weren’t “green”; they were far from it, and Mulally knew it.

One week, after being presented with yet another forest of verdant charts, he decided he’d had enough. “Guys,” he said, interrupting the meeting. “We’re going to lose seventeen billion dollars this year and all the charts are green.” No one said anything. “Do you think there’s anything that’s not going well? Maybe even just one little thing?”

The meeting room filled with a thick and itchy silence. Seats were shuffled in, throats were cleared, and eyes darted toward patent-leather shoes. The executives smelled danger. And they knew exactly what would happen to the first fool to show a red slide: the framed family portrait on their desk would be at the bottom of a cardboard box before lunch. This whole exercise was surely a trick.

Mulally tried to allay their fears. “We’re not going to be able to manage a secret,” he said. “The idea is that we can share what the situation is and help each other.” He looked around the room once more. Yet again, seats were shuffled upon, throats were cleared, and eyes darted toward shoes. The executives hadn’t felt safe bringing up problems under the previous leadership, so why should this new hotshot CEO be any different?

The days passed and the drill remained the same. Green slides, green slides, and more green slides. The truth, of course, was far less rosy. Take, for example, what was happening with the company’s much-hyped first crossover vehicle, the Ford Edge. It was in full production and just weeks away from its much-anticipated launch when mechanics at the factory in Oakville, Ontario, discovered a problem with an actuator on the lift gate. This left the executive responsible for the Edge, Mark Fields, with no option but to call the entire operation to a halt.

As 10,000 lonely Ford Edges languished on the halted assembly lines, Fields was rather on edge himself. This, he figured, was the catastrophe that would cost him his job. After all, he’d been the man in charge of Ford’s turnaround strategy before Mulally’s arrival and he suspected he was seen as a threat to the new CEO. For longer than he cared to think about, the entire company had been buzzing with rumors of his imminent dismissal. This business with the Edge couldn’t have come at a worse time. But he figured he could do his colleagues one final favor: he’d call Mulally’s bluff. Somebody has to figure out if this guy is for real, he thought. If I go out, it might as well be in a blaze of glory.

And with the fearlessness of a man who had nothing to lose, as Fields and his team prepared for the next day’s BPR, he decided to list the product-launch metric as red.

“Are you sure you want to do that?” asked one member of Fields’ executive team.

Fields answered with a question, “Is the launch on track?” The executive shook his head.

“Well then,” Fields told him, “we’re going to make it red.” Everyone skeptically looked at him as if to say “Good luck with that.”

So when Fields walked into the BPR on that chilly November morning, he really had no idea of how things would play out. He figured the best-case scenario was that he’d get reamed out but keep his job. Worst case, he’d get reamed out and be shown the door. Never did it dawn on him that there was another possible outcome.

That week’s BPR began as it always did. His colleagues presented their slides—and as usual, it was a veritable forest of green. Then it was Fields’ turn. As Mulally recalls, “Up came the red slide. And WHOOM—the air went out of the room.”

Fields cleared his throat. “On the Edge,” he said, “we have an actuator issue, so we had to delay the launch.” The entire room cringed as one. “We don’t know the solution, but we’re working on it.” As Mulally recalls, this was the moment when people thought, Well, that’s that. Two large men are going to burst into the room, grab Mark, and cart him off, and we’ll never see him again.

And then, in the midst of that heaviest of silences came a surprising sound: Alan Mulally’s exuberant applause. “Mark, this is great visibility!” he grinned. Turning to his team, he asked, “What can we do to help him out?” Right away, one of the executives suggested a solution, and they were off and running.

After all this, Mulally was optimistic that finally, the executive team would have their first successful BPR. Yet the next week, to his great disappointment, all the slides were still green. But Mulally’s team saw something that day that spoke volumes. When they entered the Thunderbird Room, Mark Fields was sitting right next to a smiling Mulally. Not only had he not been fired, he had actually been commended. This was evidently the final proof that the cynical and battle-weary executives needed. They actually believed it now—they were in a new world. The following week, the decks they brought to the BPR were a glorious rainbow of red and yellow gems.

According to Mulally, if there was a single defining moment in Ford’s turnaround, this was it. Up until that point, Ford’s executives had been afraid to surface problems; to tell each other the truth; to give and receive honest feedback. The same mentality that had kept them MUM about the realities of the business also kept them MUM about their individual failures, team dysfunctions, and cultural challenges. But now, for the first time, the team was confronting reality.

From that point forward, they were on the open road (no pun intended) to self-awareness, on many levels. As individuals, they understood expectations and were facing their limiting beliefs and behaviors; as a team, they knew the business environment, the plan, and the status of that plan. But it wasn’t just the executive team who possessed this information. Everyone in the company was trusted and expected to know the direction, the role they played, and how things were going. This information also flowed to their stakeholders outside the organization—their customers, investors, dealers, suppliers, and the public.

And the results speak for themselves. By 2009, in the midst of the biggest economic crisis since the Great Depression, Ford was back in the black, and it was the only one of the “Big Three” American carmakers who didn’t take a cent of taxpayer bailout money. By 2011, their profit had swelled to more than $20 billion. It was their second-most profitable year in history.

If being individually self-aware means understanding who you are and how others see you, a self-aware team commits to that same understanding at a collective level. More specifically, there are five things that self-aware teams regularly assess and address: I call them the Five Cornerstones of Collective Insight. First, their objectives: what are they trying to achieve? Second, their progress toward those objectives: how are they doing? Third, the processes they’re employing to achieve their objectives: how are they getting there? Fourth, their assumptions about the business and their environment: do they hold true? And finally, their individual contributions: what impact is each team member having on the team’s performance?

As a result of their collective insight, self-aware teams are more efficient, more effective, more innovative, and more rewarding to be a part of. Unfortunately, as many can attest and studies often show, few teams are naturally self-aware. After all, it’s hard enough to cultivate self-awareness in ourselves without the added challenge of our pesky peer relationships. And while our boss is theoretically required to tell us the truth once a year in our performance appraisal, our teammates have no such obligations. Though the people who work alongside us every day are often the ones with the most critical information about how we’re doing, they’re usually the most likely to stay MUM. This constant ambiguity doesn’t just sap our confidence and stoke our paranoia (remember, your peers are probably sharing what they think about you with everyone but you); it can also be damaging—even fatal—to a team’s collective success.

The Five Cornerstones of Collective Insight can admittedly be difficult to achieve. Not only does the MUM effect make people reluctant to share this information, they often see individual feedback as a “nice to have” rather than an essential ingredient for success. Yet though leaders should take their team’s tentativeness to tell the truth seriously, they needn’t be disheartened by it. With the right approach and a true ongoing commitment, you can foster a culture that encourages communication and feedback at all levels; one where honesty trumps hierarchy and even the lowest-ranking member feels safe putting problems on the table.

Specifically, there are Three Building Blocks that must be in place for a leader to drive a self-aware team. First, if the team doesn’t have a leader who models the way, the process will be seen as insincere or even dangerous. Second, if there isn’t the psychological safety to tell the truth, the chance of candid feedback is almost zero. But even with all this in place, you also need an ongoing process—not unlike Mulally’s BPR—to ensure that the exchange of feedback isn’t just a one-time thing but rather is built into the team’s culture.

In a moment, we’ll look at each of these building blocks a bit more closely. But before we do so, it’s worth mentioning a critically important point. If your team doesn’t have a clear and compelling direction, you are missing the reason to become self-aware in the first place. Imagine if Alan Mulally’s team at Ford had started having BPRs without a solid, mutually understood set of goals. As Mulally explains, “If you don’t have a vision, a smart strategy, and a detailed plan to get there, the process of self-awareness is just talking.” In other words, if a team doesn’t know where it’s headed, they are missing the “because” of self-awareness, and trying to get there would therefore be both frivolous and pointless!

Building Block #1: A Leader Who Models the Way

When Doug Suttles first stepped onto the platform of the 250-by-200-foot oil rig in the middle of the North Sea, he recognized that his new assignment would test both his technical and interpersonal skills. What he didn’t know was that he was about to learn one of the most important leadership lessons of his career. Suttles, a mechanical engineer by training, had just been appointed BP’s offshore installation manager of the Miller platform in the North Sea, just off the coast of Scotland. On top of their number-one objective, which was keeping everyone safe, Suttles had been tasked with improving the rig’s operating performance. And not only was he the sole non-Brit on the rig, he was also one of the youngest people there.

This unique situation presented Suttles with a few unique challenges. For one, he would be living with his 196 new teammates—in close quarters and many miles out at sea. He quickly discovered that in this multifaceted role of boss/ship captain/counselor, he wasn’t just on display during working hours—his team had eyes on him virtually around the clock. Even the smallest choices spoke volumes: Would he sit with managers or technicians at dinner? Would he participate in their weekly TV game show? How well would he help them deal with the interpersonal problems that such close quarters tend to breed?

Though Suttles had always been a big believer in cultivating self-awareness, his time on the rig provided him with a new and critical insight. Whether or not he was living in close quarters in the middle of the ocean, because he was a leader, each and every choice his people saw him make would serve as a model, profoundly influencing their attitudes, their behaviors, and their overall effectiveness.

Many years later, this lesson would help Suttles manage an absolutely unthinkable crisis. On April 20, 2010, the crew of the Deepwater Horizon, an oil rig located in the Gulf of Mexico just off the coast of Louisiana, was settling in for the evening. Earlier that day, BP officials and workers had gathered to celebrate seven years of operation without a single injury. At around 9:45 p.m., 23-year-old Andrea Fleytas was monitoring the computer system that maintains the vessel’s position in the water when she felt a sudden jolt. A few minutes later, the crew heard a loud hissing sound. Then came the massive explosion that would ultimately kill 11 people, injure 17 others, and spout an estimated 4.9 million barrels of crude oil into the Gulf of Mexico.

Suttles was chief operating officer of BP’s exploration and production division when he was tapped to lead the company’s response to the largest oil spill in history. In the midst of this massive emergency, it would certainly be easy to incite panic, to place blame, or to speak without thinking. (Many BP leaders fell prey to these traps, none more notably than CEO Tony Hayward, who made headlines by calling the spill “relatively tiny” and telling the press that he’d “like [his] life back.”) But recalling his time on the North Sea rig, Suttles reminded himself to model the way, no matter how difficult things became.

Suttles’ response team of BP employees, private contractors, and government workers faced a cacophony of criticism—both legitimate and spurious—from the government, the media, and the public. Which made it even more important for him to ensure that each of the Five Cornerstones of Collective Insight was in place: awareness and communication about their objectives, their progress, their processes, their assumptions, and their contributions, starting with his own. Suttles was self-aware enough to know that in such a complex and emotionally charged situation, there would inevitably be mistakes. He also knew they would need to fix them quickly. To do so, the team would have to remain cool-headed and not take criticism personally—and the only way that could happen was if Suttles was willing to acknowledge his own missteps, model emotional control, and handle the crisis calmly.

His team faced what seemed like every possible obstacle until finally, on July 15, they stopped the leak. By September 19, they’d managed to seal it completely. The lesson is that no matter what challenges you’re facing, self-aware teams must begin with a self-aware leader who models the way. “It’s easy to get isolated at the top,” Suttles told me, “But if your team isn’t performing as you’d like, the first place to look is at yourself. If I glance over my shoulder and there’s nobody back there, that’s called feedback. If I glance over my shoulder and people are following me, that’s probably a good sign.”

Or, as Alan Mulally once told me, “How far the team gets is completely dependent on the leader’s level of self-awareness.”

So how can leaders model the way? At the most basic level, as Doug Suttles and Alan Mulally have shown us, a leader must communicate her principles and act in accordance with them. Psychologists often refer to this constellation of behaviors as “authentic leadership,” and their business value is unmistakable. For example, when researcher Joanne Lyubovnikova and her colleagues surveyed teams in a variety of industries across the United Kingdom and Greece, they found that those led by authentic leaders were more self-aware and, in turn, more productive than those with less self-aware leaders.

And these effects aren’t just confined to the corporate world; they also extend to our homes and families. In one study, when mothers could successfully identify and manage their emotions, their children were happier and more self-aware a full year later. Having seen self-awareness modeled through a parent, they were more likely to develop this valuable skill themselves.

On the flip side, it doesn’t take a degree in psychology to know that human beings have amazing BS detectors. When we sense that leaders aren’t being authentic—whether they’re intentionally misleading us or simply behaving in opposition to their values—we can smell it a mile away. This causes team members to avoid bringing up issues for fear of retribution, as Mulally’s executive team initially did, and reality gets buried under a torrent of excuses and finger-pointing.

However, when a leader commits to confronting his flaws while also striving to improve, his team is motivated to do the same. In fact, this is a great example of preeminent psychologist Albert Bandura’s theory of social learning, which suggests that followers tend to imitate the attitudes and behaviors of their leader. When a leader is authentic, team members learn that it’s not just okay but expected to honestly reflect on the Five Cornerstones of Collective Insight (and the Seven Pillars on an individual level, for that matter).

So whether you are leading hundreds of employees or a handful of kids, the actions to model self-awareness are the same. First, you have to go all-in and make a total commitment to your team’s self-awareness, starting with your own. As Mulally explains, “My role is to ensure awareness for everybody. To watch all the time—watch myself, watch others, watch the organization.” Equally important is to know and communicate your credo—that is, the values that define the behaviors you expect from yourself and your team. At Ford, Mulally’s credo—something he calls his Working Together Principles and Practices*2—didn’t just help his team understand him, it drew a line in the sand for what he expected of them. It’s not enough just to ask for feedback and encourage your team to bring up problems; you need to listen—really listen—to what they have to say. When I asked Doug Suttles, who is now the CEO of oil and gas company Encana, the secret to a successful team, he replied:

A lot of people use the word “trust”—I’m not big on that because it’s too emotive for us engineers, and the meaning is set too wide. What really matters is: Do they have confidence in you? Not just that you’ll point the ship in the right direction, but do they believe you’ll listen? Do they believe you want an open and transparent environment where successes and failures are talked about? When the team is challenged, are you baiting them or actually giving them support and help?

Remember, as we’ve seen throughout this book, most leaders are fighting an uphill battle when it comes to their own self-awareness. And since unsolicited critical feedback rarely flows freely, leaders who want to change often have to take rather direct measures. Unfortunately, this creates a bit of a catch-22: If employees are reluctant to provide their opinions to begin with, won’t they feel even more stressed when you ask them for it point-blank? Can leaders really overcome the MUM effect and elicit raw, candid feedback from those they lead? Fortunately, there is a way: something I call the Leader Feedback Process.

Modeling the Way: The Leader Feedback Process

A few years ago, I was approached by Jamie, the president of a hospitality and property-management company. As only the third president in its 40-year history, he’d been brought on a year prior to break the inertia that was starting to threaten the organization’s very survival. His long career had given him a wide range of experience, but this was his first time in the top job.

Jamie had set the audacious goal of doubling the size of the company in the next five years, and in order to succeed, he would need to instill a sense of urgency and insist on excellence in every area of the organization. For this to happen, his executives had to feel safe voicing problems, confronting the brutal truth, and having tough conversations with one another about each of the Five Cornerstones—their objectives, progress, individual contributions, and so on.

On the surface, Jamie’s executive team had all the right ingredients. They were committed to his vision. They were aligned on how they would achieve it. They were generally comfortable working together. But since Jamie arrived, there had been obvious posturing, and he never felt like he was hearing the complete truth. When I interviewed each member of his team, their responses confirmed those suspicions. They believed he was the right person for the job, but many were struggling to trust and connect with him.

Jamie and I agreed that we needed to address these issues directly—to rip off the Band-Aid, so to speak—and provide a forum for a confidential but candid discussion. We decided to devote two days to an off-site retreat that would begin with an exercise that has become a gold standard in my consulting work. Jamie would later tell me that it gave him some of the most powerful feedback he’s ever received.

The process was famously pioneered in the early 1970s at General Electric and has been described as “a super-intensive getting-to-know-you meeting [where] team members raise candid observations and questions” about their leader. Though it was originally developed to help new managers and their teams get to know one another, the so-called “New Leader Assimilation Exercise” has been shown to be valuable regardless of a leader’s tenure—that’s why I call it the Leader Feedback Process. It helps managers earn nearly instantaneous insight into their team’s perceptions and expectations of them while improving their leadership, communication, and well-being. What’s more, empirically, their teams experience better, more trusting relationships and a greater sense of commitment to their mission.

So on a stifling summer day a few months after our first meeting, Jamie, his team, and I gathered in a mercifully air-conditioned meeting room at a local country club. “Thank you all for making the time to be here,” Jamie began. “We have one goal: to become a better team. And I’m up first. Over the next three hours, you’ll have the chance to give me feedback about my first year on the job. The ground rules are simple. No comment is out of bounds and everyone participates. Can we all agree to that?”

He paused, surveying their reactions. A few people hesitantly nodded, but there was a palpable sense of uneasiness. Attempting to allay their fears, he added, “To help you be comfortable being completely candid, I’m going to leave the room and have Tasha lead the discussion. I’ve asked that under no circumstances should she tell me who said what. Does that sound like it would work?” The fear now significantly abated, they responded with a chorus of surprisingly eager yesses.

After I (gently) kicked Jamie out of the conference room, I stood up and gestured toward seven flip-charts covering one long wall. On the top of each sheet was a question written in blue marker:

1.What do we know about Jamie?

2.What do we want to know about Jamie?

3.What should Jamie know about us as a team?

4.What concerns do we have about Jamie?

5.What expectations do we have of Jamie?

6.What do we want Jamie to stop doing, start doing, and continue doing?

7.What feedback do we have about our vision, our strategy, and our plan?

“This part of the discussion will last about forty-five minutes,” I told them. “And we’ll answer each question in order. Your job is to give me as many ideas as you possibly can, and my job is to write down everything you say.” Positioning myself in front of the first flip-chart, I removed the cap of a large black marker. “Let’s start by discussing what we know about Jamie.” Three answers came instantly: “We know he has been working in the industry for twenty-five years.” “We know that he has insanely high expectations.” “We know that he must be really brave, because he’s doing this exercise!”

And just like that, we were off and running. The comments were flowing so freely that I started to write smaller just to fit all of their replies on the giant sheet of paper. We moved to the second question, and the third, and so on. Forty-five minutes later, all seven flip-charts were covered with their comments.

I gave the team a 10-minute break and went to find Jamie. As we walked back to the room, I asked him, “Are you ready?” He grinned confidently. “Ready as I’ll ever be!” But when we approached the wall of flip-charts, his grin faltered and his eyes grew wide. I gave him a few minutes to read his team’s answers and helped clarify the meaning of a few comments. Before I fetched the team, I reminded Jamie how important it was to remain calm and non-defensive in the next part of our discussion.

Soon everyone was assembled around the conference table. But before we dove into the feedback, I asked Jamie to spend a few minutes giving his team some background on his life: favorite things to do growing up, number of brothers and sisters, funniest childhood memories, most important values—I’ve found that in the right context, sharing such information has a near-immediate impact on the team’s level of trust even if they’ve known the leader for many years.

Next, Jamie responded to their feedback one question at a time. For some comments, a simple acknowledgment was sufficient (“Yes, I do have insanely high expectations.” “I am glad you think we’re headed in the right direction even if this first year hasn’t been easy.”). Others required more discussion, and in some cases, a commitment on his part to try a different approach. For example, many members of the team were frustrated that Jamie would sometimes go around them and approach their staff directly. Exploring that feedback helped him understand that this was embarrassing for his executives and confusing for their employees.

During the course of our 90-minute discussion—which Jamie started to refer to as his “proctology exam”—his insight into how the team was perceiving his behavior grew exponentially, as did their understanding of his expectations. And when Jamie and I sat down a month or so later, he told me that he was absolutely awestruck at the improvements he had seen—both in his own effectiveness and the overall functioning of the team. The retreat, he said, had accelerated their trust. They were talking more openly about real, substantive issues. And though some had occasionally slipped into their old habits, they were more engaged and collaborative than they had ever been. Not coincidentally, less than one year later, the company’s revenue had jumped more than 20 percent.

Jamie and his team had certainly reached an important milestone in their journey toward collective self-awareness. In showing them that he was truly open to hearing the truth about himself, they felt safer sharing it even without being directly asked. But to create a truly self-aware team, this is only the first step. Even once leaders have opened up these channels, they must also work to ensure that they stay open, and not just between employees and the leader but among members of the team.

Building Block #2: The Safety (and Expectation) to Tell the Truth

In 1996, doctoral candidate Amy Edmondson began what has since become a landmark study on the science of team self-awareness. Edmondson, now a professor at Harvard, wanted to better understand the reasons for medical errors among hospital-care teams; a pressing issue given that the average hospital patient is exposed to between 480 and 960 potential errors, which kill hundreds and injure more than a million people each year in the United States alone.

Edmondson followed eight hospital-unit teams in two urban teaching hospitals over the course of six months. At first, she was puzzled to find that teams with better unit performance (quality of care, collaboration, efficiency, leadership, etc.) reported more errors. But as she examined the data further, she discovered the reason for these surprising findings.

The poorer-performing units weren’t making fewer medication errors—they just weren’t reporting the ones they’d made. The reason? These nurses, quite simply, were terrified to do so, telling Edmonson that those who did got “put on trial” and “blamed for mistakes.” (When I worked in a hospital, I personally experienced the challenges of raising an issue that might negatively impact a closely watched metric.) In contrast, in the highest-performing units in Edmondson’s study—that is, those with the most reported errors—the nurses were comfortable openly discussing mistakes. On these teams, they weren’t afraid to tell the nurse manager that something had gone wrong.

Edmondson coined the term psychological safety to describe the shared belief that it’s safe to ask one another for help, admit mistakes, and raise tough issues. “The term,” Edmondson explains, “is meant to suggest neither a careless sense of permissiveness, nor an unrelenting positive affect but rather a sense of confidence that the team will not embarrass, reject, or punish someone for speaking up.” Though somewhat counterintuitive, her comment about “unrelenting positive affect” is particularly important: in highly cohesive teams, members might be less likely to challenge one another, often because of a misguided desire to maintain group harmony. But as “good” as this might feel, it’s detrimental to the team’s self-awareness and therefore to its success.

Google’s People Operations Department reached a similar conclusion after a five-year research program examining what it took to build the perfect team. Early on, after the team of organizational psychologists, engineers, sociologists, and statisticians had reviewed thousands of studies on what made teams successful, they couldn’t isolate any specific patterns. So they tried a different approach, studying hundreds of Google teams on factors like personality, background, and work style. Still no answers. It seemed that the team makeup—the “who”—didn’t matter, whether they were introverts or extroverts, subject experts or polymaths, worker bees or queen bees, or any combination of the above.

Interestingly, the Google team reached a breakthrough only once they began to examine the “how”—or the unwritten rules that governed the way a team worked. Their findings were consistent with what Edmondson had discovered in her hospital study 15 years earlier: psychologically safe teams consistently outperformed those that aren’t.

But how does psychological safety relate to team self-awareness? A few years after her study with hospital teams, Edmondson began another investigation—this time, with a company that manufactured office furniture—extensively studying more than 50 teams via interviews, surveys, and direct observation (i.e., she essentially followed people around with a clipboard, which is also one of my favorite pastimes). Again, when team members felt psychologically safe, they were more comfortable raising issues, more likely to deal with reality, and more likely to speak the truth. They were also infinitely more successful. In fact, the precise reason that psychologically safe teams performed better was specifically because of their higher levels of self-awareness.

It’s worth noting that for high-profile companies, a psychologically safe culture isn’t just good for morale and productivity, but also for the company’s public image. According to Ed Catmull, because Pixar’s executives tell employees the truth, they naturally appreciate the importance of confidentiality. As a result, Pixar has never had a single leak to the press—not even during the dramatic due diligence period when they were being acquired by Disney. Even when Catmull, John Lasseter, and Steve Jobs announced the deal to employees, not one spoke to reporters camped outside their headquarters.

Let’s look at an example of how leaders can create the safety—and the expectation—for telling each other the truth. As a new day was about to dawn during an especially stressful week, Levi King (the entrepreneur we met in the last chapter) was clearing out his inbox before attempting to catch a few futile hours of sleep. The last e-mail he sent before his head hit the pillow was an exasperated rant to his business partner about an issue that had been bugging him at their company, Nav. But the second he sent it, he knew it had been a mistake. The tone was unnecessarily rude—borderline hostile, even. Levi knew he had really messed up when his normally lightning-quick-to-respond partner waited a full 24 hours to reply. The response was measured but direct, pointing out Levi’s incendiary language and politely asking whether he really felt that way.

First thing that next morning, Levi found his partner. “I am so sorry,” he said, “I don’t know what I was thinking. It was late. I was tired. I was an asshole.” Thankfully, his partner accepted his apology, but instead of patting himself on the back and moving on, Levi was self-aware enough to see the larger opportunity in his gaffe. During the company’s next monthly meeting, Levi hooked up his computer to the conference room projector and pulled up the offending e-mail. He watched his employees’ eyes grow wider with disbelief as they scanned his message. “Is anyone proud of this?” Levi asked. They shook their heads. “Okay, then. Let’s talk about what I did wrong here.” They then engaged in a frank post-mortem to deconstruct exactly why the e-mail had been rude and agree on what Levi could have done differently. And though the conversation was certainly uncomfortable, he pushed through it because of the learning opportunity it provided to his team.

It should come as no surprise that the first step for leaders wanting to cultivate psychological safety in their team is to work on building trust. But though it’s important, trust alone isn’t sufficient for psychological safety. More than merely trusting that team members have one another’s best interests at heart, psychologically safe teams go a step further to show each other respect, sensitivity, and caring. And to do this, they have to see one another as real human beings with weaknesses and flaws. In fact, Google’s research program found that the single most powerful contributor to psychological safety was vulnerability, or a willingness to openly admit our failings. And it has to start at the top. “Many leaders,” says Levi King, “say ’Yes it’s safe [to be vulnerable,]’ but they’re not willing to go there themselves. I can’t just talk about this figuratively. I have to show that at our company, it’s okay to make mistakes—because we forgive each other and assume positive intent.”

To be sure, as research professor and author Brené Brown demonstrates in her book Daring Greatly, doing so can often feel scary and even wrong, especially for people in positions of power. I once worked with a successful executive who saw vulnerability as a weakness earlier in his career. “If I even hinted,” he told me, “that I had made a mistake, I thought my team would lose respect for me.” But as time went on, he realized that the truth was actually the exact opposite. As Doug Suttles observes, “I’ve learned over time that being a bit vulnerable deepens people’s respect for you, particularly when you’re willing to acknowledge it. They walk away and say ’Holy smokes! I’m going to screw up someday. But maybe it’s okay and it’s a good idea to talk about it openly.’ ”

In addition to modeling vulnerability, leaders can foster psychologically safer teams by working together to create clear norms. Years ago, I was asked to help a leadership team that oversaw women and children’s services at a preeminent hospital with their strategic planning process. Their newly promoted director, Tracee, along with her four nurse managers, had been tasked with keeping the department competitive. Because the facility was recognized as the city’s “baby hospital,” many people, including countless celebrities, traveled from all around the country to deliver there. But in recent years, local competitors had stepped up their game, offering then-unheard-of amenities like luxury suites, personal chefs, and sparkling new facilities. Tracee’s team had to keep up, not just by ensuring compassionate and world-class medical care, but by offering the kind of top-notch service found in a five-star hotel.

While some managers might have simply thrown money at the problem—say, by upgrading the accommodations or trying to one-up the competition on amenities—Tracee and her team took things a step further. Understanding the direct link between their willingness to tell one another the truth and achieving their aggressive goals, they decided to focus on making their department a safer, more supportive place for their nurses and techs to work.

So before we even dove into business planning, our first step was to have a frank discussion about how Tracee’s team was functioning (i.e., the cornerstone of processes). They admitted that while they usually worked well together, there was sometimes an undercurrent of tension that no one was willing to call out. For that reason, I suggested that we create a set of team norms. “The objective,” I told them, “is to agree on your rules of engagement as a team. What behaviors will help you achieve your strategy? What kind of environment do you want to create? What do you need to do to make this a safe and supportive team?” To define these behaviors, we used the Start/Stop/Continue Model that we learned about in chapter 7 (while I don’t think this model is particularly effective at the individual level, it can give teams a common framework to discuss what’s working and what isn’t).

Tracee’s team’s final list of norms looked something like this:

•No gossip: open, honest, safe communication.

•Always go to the person: have difficult conversations with each other in the spirit of support.

•Business is business: have crucial conversations and still be on good terms.

•Assume the best: support each other in front of staff, patients, and physicians.

•Practice forgiveness: we’re human. We make mistakes. Address it and move forward.

To ensure that their norms became a living, breathing document rather than something they stuffed in a drawer and forgot, they plastered their offices and meeting agendas with them so they stayed top-of-mind. When the team members demonstrated the principles, they commended one another; when they didn’t, they called one another out. Eventually, they took their norms to their own teams, and in turn started to hold the entire department accountable. The increase in performance was undeniable: employee engagement jumped from 71 percent to 86 percent in less than a year; they were among the top 10 performing hospitals out of 163 national facilities; and they even managed to grow their service line in a shrinking market. As Tracee and her team discovered, the time and energy they invested in creating a few simple norms to support psychological safety among their leadership team had paid off in spades.

Building Block #3: An Ongoing Commitment and Process to Stay Self-Aware

As the bright afternoon sun streamed in through the window, I surveyed the cluttered, colorful office I’d just entered. To my right was a long, neat desk with a huge Apple computer monitor as its centerpiece. To my left, a wall of bookcases crammed with action figures, family photos, awards, and other tchotchkes, including the cast of a hand that has become world-famous in the computer animation community. Just minutes before, I had stepped onto the 22-acre campus in Emeryville, California, traversed a long, shady walkway, and entered the atrium of the Steve Jobs Building. Flanking the front desk were life-sized versions of Monsters, Inc. characters Sulley and Mike on one end and a giant sculpture of Toy Story’s Woody and Buzz on the other. On the back wall was a giant print of Scottish princess Merida from Brave riding through the forest on her noble steed.

It was a Thursday afternoon at Pixar headquarters, and I was sitting in the office of its brilliant president, Ed Catmull. Like many people, I had adored his 2014 book, Creativity Inc. But because I am a self-awareness researcher, there were a few elements of it that had piqued my interest so much that I simply had to talk to him. Among other things, I wanted to learn more about Pixar’s now-infamous “Notes Day,” which Catmull chronicled in the last chapter of his book.

The year was 2013, and despite a series of record-breaking box-office hits, Pixar was experiencing a frustrating sense of inertia. On top of surging production costs, Catmull and his team had noticed a subtle but worrisome trend, especially for Catmull, for whom a core tenet is what he calls “leading by being self-aware.” In recent years, as the company had grown, the culture had also changed. Instead of sustaining the “unhindered communication” that made them so successful, employees seemed to be censoring themselves more and more. Catmull wanted to know why people were so hesitant to speak the truth and, equally importantly, what to do about it.

Clearly, it wasn’t enough just to encourage feedback: they needed a dedicated process to generate it. So on March 11, Pixar closed to hold a “day of honesty,” which they called “Notes Day.” In the weeks leading up to Notes Day, Pixar executives posed a question to employees: “The year is 2017. Both of this year’s films were completed well under budget. What innovations helped these productions meet their budget goals? What are some of the specific things we did differently?” They received more than 4,000 responses about more than 1,000 unique topics, ranging from reducing the amount of time required to make each film, to developing a better workplace, to reducing implicit gender bias in their films. The executives had chosen a few more than 100 of those topics for employees to tackle in 171 separate sessions spread out across the three buildings of their campus. Employees chose which sessions to attend, and all were led by a trained internal facilitator. Each one concluded with a series of “Exit Forms”—red for specific proposals, blue for brainstorms, and yellow for best practices, as well as assignments of “idea advocates” who would help advance suggestions that came out of the conversations.

Pixar co-founder and chief creative officer John Lasseter kicked off the day by reminding everyone how important candor was to their success. He underscored how difficult it was to give and receive tough feedback, but implored everyone to do their best to be honest anyway. “This is going to feel like it’s directed at you personally…” he said, “but put your tough skin on, and for the sake of Pixar, speak up and don’t stop the honesty.”

In the months following Notes Day, Catmull received many e-mails from employees applauding its concept and execution. The experiment seemed to have, as Catmull put it, “broke[n] the logjam that was getting in the way of candor” and “made it safer for people to say what they thought.” It also served as a reminder for everyone that “collaboration, determination and candor never fail to lift us up.”

But now that a few years had gone by, I wanted the final verdict. Had this exercise just been a one-off success, or had it truly had an ongoing impact on their culture? Were leaders still hearing the truth from their employees? Were employees actually more comfortable giving and receiving candid feedback?

With these questions swirling around in my head, as if on cue, Catmull appeared in the doorway. Dressed in a black short-sleeved button-down shirt and jeans (and, naturally, sporting an Apple watch), he hobbled over to the chair across from mine. Gesturing to the cast on his right foot, he quipped, “I got drunk in a biker bar and did a roundhouse kick.” I chuckled, sensing that that probably wasn’t how he’d actually gotten the injury.

As our conversation progressed, I was struck by Catmull’s depth of thought. He was focused and professorial, eschewing simplistic or neat explanations at every turn. This was especially true when I asked him about what had happened after Notes Day. He sat back in his chair and adjusted his glasses. I smiled, expecting him to regale me with tales of how Notes Day had solved all of their candor problems and now everyone was telling the truth about everything.

But Catmull chose a slightly different path. “It was definitely a valuable exercise,” he stated. “But a few big things slipped through the cracks.” He explained that a few months after Notes Day, they were having a “major meltdown” with one of their films. Both their traditional channels and their back channels for feedback to leaders had failed, to the point where the film was in danger of not even being made.

Catmull paused as I connected the dots. “So these issues were there on Notes Day?” I asked, furrowing my brow. Catmull nodded. “And everyone knew they were there?” He again nodded. Flabbergasted, I asked, “And no one said anything about them on the day of honesty?” Catmull nodded a third time, looking at me with an expression that said bingo.

He went on, “We realized that we had a deeper issue that we needed to figure out. Notes Day originated from a very successful process we’d developed with our Braintrust, which is a group of our directors and best story people. That group had done a great job of making their meetings safe for notes and criticisms. We had been trying to model this style of safety for the whole company.”

However, he told me, there were two problems. The first was that not every manager had the skills to solicit ongoing feedback. “People take their cues from what they see and observe,” he said, “not from what we say.” No matter how often the executives assured everyone that this was a safe organization for criticism, if their team didn’t feel safe, they would be cautious about what they said.

The second problem, as Catmull described it, was that notes are well-intended criticisms, but they are not solutions. “Solutions,” he said, “require a great deal of effort, both in understanding them, and then working out how to act on them.” At the end of Notes Day, they had thousands of “notes” but still needed to sort through the information, find patterns, set priorities, and then develop solutions.

But the biggest shock of all was that a few big problems still went completely unmentioned. Catmull is convinced that no one brought them up because they assumed someone else would. And since the leaders didn’t know about these problems, they hadn’t created the right opportunity to discuss them. “It’s hard to make a safe venue for a problem that we didn’t even know existed,” he noted. In other words, they didn’t have the right data to be questioning their assumptions about how the company was functioning (i.e., assumptions being one of the trickiest of the Five Cornerstones).

Clearly, if the Pixar executives wanted to further open the floodgates of feedback, an ongoing process was needed—though it would take some adjustment to reap real rewards. Two employees, one technical and one artistic, proposed a system: if people didn’t feel comfortable talking to their manager about something that wasn’t working, they could approach a designated Peer Pirate for help. Catmull explained that “in the days of real pirates, the crew would elect one of their peers to take issues and complaints to the captain with the agreement that he wouldn’t be killed for what he said.”

Pixar implemented Peer Pirates as a back channel to reveal the kinds of problems that were still going unmentioned. But after eight months, it still wasn’t yielding valuable information. That’s when Jim Morris—Pixar’s general manager at the time, and now the president of Pixar—suggested that each Peer Pirate select four to six colleagues from their departments who could communicate feedback to Catmull and Morris together. Each department assembled a group that was diverse, comfortable with each other, and therefore more likely to be comfortable with Catmull and Morris.

With this, they were onto something. The Peer Pirates took their presentations very seriously, and many issues that had gone unmentioned on Notes Day were brought to the surface. “Now we had a mechanism for finding deeper insights and patterns within and across departments,” Catmull said, beaming. “Now we had gold.” These insights set in motion a few significant organizational changes that are now bearing fruit.

But Catmull is quick to point out that the process wasn’t a silver bullet, either. Some issues have been easy to fix, others took a lot of work, and others they’re still wrestling with. “It would be a grave mistake for us, or people on the outside, to somehow think that we’ve got it figured out,” he said. Yet the great value of the Peer Pirates was that they uncovered a few systemic problems that were getting in the way of ongoing honesty. And by addressing the underlying reasons for why employees weren’t telling the truth, they helped their already smart and talented managers create a culture where they could.

Pixar’s approach is just one example of how leaders can instill an ongoing process and therefore a culture of awareness. Let’s look at another slightly more extreme case. In 1975, 26-year-old Harvard graduate Ray Dalio founded Bridgewater Associates in his New York City apartment. The company would go on to become the world’s largest hedge fund, and Dalio credits their success to the principles of “radical truth” and “radical transparency.”*3

At Bridgewater, employees are encouraged to call out unproductive behavior, and criticizing others behind their backs is a fireable offense. All conversations, unless they are personal or proprietary, are tape-recorded and accessible to anyone in the company. Bridgewater has even invested in technology to support the free flow of feedback. Using company-issued iPads, employees publicly record problems and failures in an “issues log.” Each person, including Dalio, also has a “digital baseball card” where they score each other on behaviors like creativity and reliability on a scale of 1 to 10—the average of which is then displayed on the card for all to see. Through another app, employees give one another “dots”—“good dots” are awarded for behaviors that support the team, and “bad dots” help employees understand how they might be hurting it. Of such processes, co-chief investment officer Bob Prince observes, “What we’re trying to do here is to pursue the truth at all costs.”

But what are the costs? And are Bridgewater’s extreme practices something that other companies should emulate? Their financial results are certainly impressive—they’ve returned more money than any other hedge fund in history. And indeed, many employees say they love working there so much that they can’t imagine being anywhere else. But other insiders believe that the company is successful not because of this “constant drumbeat of criticism,” but in spite of it. One former employee explained, “What you see at Bridgewater [is] people practicing armchair psychology. You have a bunch of 23- and 24-year-olds running around supposedly diagnosing problems that I wouldn’t trust someone with a PhD in psychology to do.” It is perhaps for this reason that a shocking 30 percent of new hires leave—either voluntarily or involuntarily—within two years of being hired.

So is Dalio a brilliant visionary or an Orwellian autocrat? It depends on whom you ask. Though I certainly don’t disagree with his unflinching commitment to the truth, my view is that Bridgewater’s methods may be unnecessarily costly, and that most teams can achieve a feedback-rich environment without such extreme measures. Let’s look at one way to do that: the Candor Challenge, a process I have refined over many years to instill ongoing self-awareness in teams.*4

The Commitment to Ongoing Team Self-Awareness in Action: The Candor Challenge

“We’re…we’re going to do what?” asked one indignant vice president.

“With respect, I honestly don’t see why this is necessary,” said another. “Business is booming. Our year-over-year growth is busting all projections.”

“I agree,” said Sarah, the VP of finance. “We all respect your work, Tasha, believe me. The morning session was great. But you must understand, we’re already the most self-aware team I know. We have a clear direction as a company. John’s a fabulous president and does a great job modeling the way for us. Everybody knows they can speak up without getting in trouble. Honestly? We like each other. We trust each other. We hang out together. So, thank you, Tasha, but I really don’t think we need to spend three hours exchanging feedback.”

In all my years as an organizational psychologist, I’d never experienced such a brilliant and well-informed pushback. These executives not only knew exactly what to say; they were right—mostly. Theirs was a successful company that already had most of the building blocks of self-awareness in place. But, perhaps ironically, their success had created a new problem. When things are going well, people are more apt to ignore the reality of potential issues, suppress difficult conversations, and put up with bad behavior. In recent months, John had noticed an increased prevalence of turf wars—his team members had hunkered down in their departments, seemingly popping up only to squabble about minor cross-functional issues, and sometimes bringing in John himself to arbitrate.

“They’re bickering like siblings!” he moaned.

“I’ve seen this so many times,” I told him. “It’s far easier for the VP of sales and the VP of marketing to lock horns in a budget battle than talk about the deeper, subtler issues getting in the way of their working together.” We needed to figure out what those issues were.

Back to the retreat, and the team’s well-intentioned pushback. “Okay,” I said to Sarah, “I definitely hear you.” I took a deep breath, knowing that what I said next would either make or break the rest of the afternoon. “Let me ask a question. How many of you are nervous?” Every hand shot up.

“Nervousness is understandable and totally normal,” I said. “But the level of fear in the room suggests to me that something’s still stopping you from being truly open with one another. Maybe some of you are afraid to rock the boat when the waters are so calm. Maybe some of you prefer to avoid conflict or are just keeping quiet because everyone else is. Could it be, I wonder, that you guys are missing the final building block? Have you truly made an ongoing commitment to staying self-aware as a team?” Before anyone had the chance to respond, I continued, “It would be unfair for me to tell you this will be easy, but I can promise two things. First, the process works. And second, this will be one of the most important conversations you’ve ever had.” Nine sets of eyes stared back at me, each as wide as saucers.

I’d made my promises. Now all I had to do was keep them.

Working in my favor was the fact that we’d already had a great start. This was the afternoon of a one-day retreat that John and I had designed to look at how the organization was functioning and lay the foundation for the open exchange of feedback on an ongoing basis. The morning had been devoted to briefly verifying their strategic direction, creating team norms, and, most importantly, participating in a Leader Feedback Process for John. This exercise had gone quite well, with John discovering a few strengths and weaknesses he’d never known he had. As we just saw, seeing him model the process of receiving feedback was an important prerequisite for his team to feel more comfortable giving feedback to each other—which was what we were about to spend the next three hours doing.

The Candor Challenge takes place over a period of months or years, but most notably begins with a Team Feedback Exchange, in which every team member gets the chance to give their peers feedback on their strengths, their weaknesses, and what they can do to increase their contribution to the team’s success. And if that isn’t intimidating enough, each team member delivers that feedback in front of the entire team. To lead the exercise, leaders can enlist an outside facilitator (in John’s case, it was me) who has expertise in group dynamics, like an organizational psychologist or HR professional. Alternatively, they can appoint a team member to facilitate the process. Beyond the essential requirement that this person be both trusted and socially savvy, he or she should also be neither the team’s most senior nor its most junior member. (And as a general rule, the larger the team, the more helpful it is to engage a skilled facilitator; with groups larger than five or six, this is absolutely invaluable to ensure an efficient and effective process.)

John’s team had been warned that the Team Feedback Exchange was coming. Three weeks ago, he’d asked them to start thinking about each of their colleagues’ contributions—what they were doing that was helping the team, what could they be doing differently, and what they personally needed from each person to be successful. Now it was time for them to speak up. I stood up and walked over to a flip-chart where I’d outlined the process. It looked like this:

Process (20 minutes per person)

•Prepare feedback

•Deliver question 1 feedback (30 seconds per question)

•Deliver questions 2 and 3 feedback (30 seconds per question)

•Questions for clarification

Then I explained how it would work: each person would give feedback to each other person at the table by answering three questions—and everyone would have the chance to ask for clarification on the feedback they’d been given at the end of their turn. The nine participants would be randomly assigned to one of three groups, and the exercise would progress in rounds, with short breaks in between. At the end, we would take some time to process and debrief.

After confirming that the executives in the first group felt comfortable kicking things off, I turned to another page of the flip-chart where I’d written the three questions they would be answering about their colleagues.

1.What, behaviorally, does this person do that most contributes to our success?

2.If this person could change one behavior to be more successful, what would it be?

3.What behavior do I need from this person to help me be more successful?

“Okay,” I said. “Now it’s time. You have a few minutes to prepare your feedback for the first group. Remember, though, that the purpose isn’t to tell your teammates everything you think about them—we’re looking for one piece of feedback for each question, a thirty-second response or less.”

I stressed that their feedback should focus on behaviors rather than generalities. “By behavioral feedback, I mean focusing on specific examples of what they said, how they said it, or what they did rather than generalities or interpretations,” I said. “For example, telling someone, ’You’re being aggressive,’ is not behavioral; it’s an interpretation of their behavior. Alternatively, if I said, ’During our last team meeting, you interrupted me three times and raised your voice each time,’ that is about behavior. Focusing on what people are doing rather than our interpretations or judgments not only helps us better understand the feedback, it helps you hear it openly and non-defensively.”

Just as I thought they were finally getting with the program, Sarah once again raised her hand with the enthusiasm of a straight-A student. “I understand what you’re saying,” she said, “but this all seems a little bit over-the-top. Is there a reason that we have to give each other our feedback verbally? Can’t we just write it down and give it anonymously?”

Her colleagues began nodding and hmm-hmm’ing around the table. “I’ll give you three reasons why it’s always better to give it verbally, Sarah,” I said. “First, the richness and detail you get in a conversation is unmatched by written feedback. Second, believe it or not, anonymous feedback can often be more hurtful. When people’s comments can’t be traced back to them, they’re not as careful with how they word things. And third, delivering feedback out loud offers the opportunity to practice this habit in a safe, controlled environment, which makes you more likely to continue it in the future.”

Sensing their continuing disquiet, I gave them the ground rules that would ensure that everyone stayed honest, open, and respectful of one another throughout the process. They were:

Getting feedback ground rules*5:

1.No pushback or defensiveness: be curious and remember that perception is reality.

2.Take notes and ask questions only for clarification.

3.Be open-minded and assume good intentions.

4.Thank your team members. Giving feedback isn’t easy!

Giving feedback ground rules:

1.Avoid generalities (“you always” or “you never”).

2.Focus on the behavior rather than the person.

3.Don’t give your interpretations of others’ behavior—just the behavior itself.

4.Provide examples.

With that, it was finally time to get started. I gave them a few minutes for everyone to prepare their answers for group 1: first up would be an executive named Doug. We went around the table, with each person sharing their answers to question 1, then 2 and 3.*6 Doug wisely took notes to capture the feedback, and when everyone was finished, they looked at him expectantly. He smiled, thanked them, and asked a few clarifying questions. And because he appeared to have made it through unscathed, they all seemed a little more at ease. The team was now getting into a rhythm. We moved to the rest of group 1, and after a quick break, we continued with groups 2 and 3.

When we finished, they broke into a loud, exhausted round of applause at what they’d just accomplished. The team had followed the ground rules perfectly and, in my eyes at least, unearthed some incredibly powerful issues. And just as important, I could tell that each one of them had managed to hear and absorb the feedback without defensiveness, denial, or hysterics. Were there some tears? Sure—there often are. Interestingly, though, after years of using this exercise, I’ve seen just as many shed during the positive feedback as I do with the constructive feedback.

Our three hours almost up, I issued a challenge. “To close out the exercise, we’re going to go around the table. I’d like each person to make one commitment based on the feedback they just heard.”

“I’m going to play devil’s advocate and share the voice of the customer more often,” said one executive.

“I’m going make more time to meet with each of you instead of charging ahead without your input,” said another.

“I guess I’d better stop harping on what’s wrong and be solutions-oriented,” said a third.

It had been a long afternoon. All that was left was to agree on the plan to keep the process going—something I call Accountability Conversations. The team decided to circle back monthly and devote 30 or so minutes to a discussion: each person would provide an update on what they were doing to make good on their commitment. Then, they’d ask the team for their feedback, support, or anything else that would help them stay on the path toward improvement. But Accountability Conversations, the team astutely realized, weren’t an excuse to sit on feedback for days or weeks. So they also agreed to point out, in real time, when they saw behavior that either supported or contradicted each team member’s commitment.

Before bidding John and his team farewell, I gave them a crucial reminder. “Now that this feedback-rich culture has hopefully started to take hold, try to resist the temptation to think your work is done,” I told them. “Your work is not done. In fact, this is only the beginning. Staying on top of the truth requires an ongoing commitment.” This is why I recommend that at a minimum, all teams should hold a Feedback Exchange at least once per year—after all, there are always new behaviors, new challenges, and new team members, and keeping the feedback flowing is crucial to addressing new issues as they crop up.

With that, John’s team filed out, exhausted, exhilarated, and, yes, deeply relieved. But did I live up to my promise of giving them one of the most important conversations they’d ever had? A few months later, I found out. If the Feedback Exchange was successful, the progress they made after it was equally hard-earned and equally extraordinary. Like any team comprised of mere mortals, they had a few slips into old behaviors here and there, but the difference was that they were now brave and committed enough to call each other out. When I asked John what the net effect of all of this was, he said, “As a team, we’re getting more done in the same amount of time. We’re surfacing critical business issues and fixing them before they get out of hand. And what amazes me most is that the silos are basically gone—we’re working together as one team.”

And while the Candor Challenge is designed primarily for the work setting, all teams can use it to cultivate and sustain a culture of self-awareness—whether they’re executives running a business, families trying to get along, or volunteer groups working to change the world. (Accordingly, if you would like to implement this process in your own team, you can download a workbook to help you do it at Indeed, no matter what your goals are, the commitment to the process of getting and staying self-aware can be the difference between failure and energizing, spectacular success. The good news is that candor creates a virtuous cycle: the more honest you are with one another, the easier it becomes to be honest in the future. Of course, it takes work and courage to get there, but the results are well worth it. You’ll deepen your relationships, foster real collaboration, and dramatically improve your progress toward fulfilling your mission.


In 1888, while visiting his mother at his childhood home, 34-year-old George Eastman was tinkering with an anagram set, trying to conjure a name for his new company. He wanted something short, unique, and easy to pronounce. Eastman loved the word they finally invented—especially the first letter, K, which he saw as “strong [and] incisive.”

Later that year, he leased the third floor of a building at 343 State Street in his hometown of Rochester, New York, and an American icon was born. Eastman’s business model was almost immediately profitable, in part because his relatively inexpensive cameras required customers to repeatedly purchase high-margin items like film, chemicals, and paper. For nearly a century, Kodak thrived, gobbling up 90 percent of the film market. By the late 1970s, they made 85 percent of cameras sold in the United States. And the brand wasn’t just profitable—it seemed to capture the ethos of the American Dream. As just two examples, Neil Armstrong famously took a roll of Ektachrome film to the moon, and Paul Simon paid tribute to Kodachrome, the company’s 35mm film, in a song of the same name.

But Kodak’s failure to grasp the changing realities of its consumer base—specifically, the birth of digital photography and the subsequent death of film—would be the company’s undoing. In 1975, when Kodak electrical engineer Steven Sasson assembled a prototype of the first digital camera, management scrapped it because they believed the product would hurt their film business. In a textbook example of delusion, Sasson described the managers’ reaction as something akin to, “That’s cute—but don’t tell anyone about it.”

In the late 1970s, as Paul Carroll and Chunka Mui reveal in their book Billion Dollar Lessons, Kodak’s challenges soon mounted on the back of increasing pressure from its partners—from photo finishers to film retailers—to evaluate the long-term viability of traditional film. Their 1981 report concluded that their current business model would remain competitive only until 1990 (not because customers preferred film, but because digital cameras and photo printers were initially prohibitively expensive). Yet instead of using the results as a rallying cry to reinvent their business and tell their stakeholders the truth, Kodak executives burrowed their heads deeper into the sand. And though they made a trivial foray into the digital space, their languid pace meant they were undercut by competitors who had already responded to this new reality. The final nail in the Kodak coffin came in January of 2012, when the company filed for Chapter 11 bankruptcy.

This is a chilling tale of what happens in the absence of self-awareness at an organizational level. If team self-awareness means confronting reality by fostering candor among team members, organizational self-awareness means confronting market realities by actively seeking feedback from all stakeholders—employees, unions, customers, shareholders, suppliers, communities, legislators—and keeping those stakeholders informed about how the company is adapting to serve their changing needs. Alan Mulally calls this “awareness for everybody”—where everyone knows the goal, the status, and the plan, and has a voice in deciding on the steps needed to get there. And as technology and social media open up new channels for communication and the demand for transparency in business increases, the importance of organizational self-awareness will only continue to grow.

But this practice flies in the face of the way most companies function. Paradoxically, as we saw with Kodak, it’s not always that organizations don’t have the information, but rather that they can’t or won’t accept it. Specifically, unaware companies fail to ask the rather arresting question that my colleague Chuck Blakeman likes to ask his clients: “What are you pretending not to know?” Put simply, companies who fail to appreciate their market realities are fostering a collective delusion that will almost always sow the seeds of their undoing. Though there are many reasons for this kind of delusion, it is often due to what Chuck calls “Quarterly Report Syndrome”—prioritizing short-term results over long-term success.

Organizational delusion, however, isn’t just confined to ignoring external realities—the same can be true for internal truths. When Alan Mulally first arrived at Ford, it seemed that every day he would open the Detroit News to find some horrible story about his new company—engineering issues, manufacturing problems, harassment claims—that had been leaked by internal sources. Previous leaders may have reacted by finding out who leaked the story and reading them the riot act. But for Mulally, this was an opportunity to learn why employees were airing the company’s dirty laundry in the first place.

So he called up reporter Bryce Hoffman. “Bryce, I want to talk to you about these pieces you keep publish—”

Hoffman interrupted, “Mr. Mulally, they’re all true.”

“I know they’re true,” Mulally replied. “That’s not why I’m calling. What I want to know is how you’re getting such accurate and detailed stories.”

“Well…it’s pretty simple,” Hoffman explained. “I walk into my office every morning and I push ’play’ on my answering machine. Most employees even leave their name and number in case I want any clarification.”

Mulally was speechless. “Bryce, why are they doing that?”

“Mr. Mulally, they love this company,” Hoffman told him. “And they’re scared to death because no one is telling them what’s going on. The issues they’re leaking are so serious that since management isn’t talking about them, they figure calling me is the safest way to bring them up!”

Mulally couldn’t believe it. He was reeling. He now had no choice but to push even harder to ensure that all of Ford’s stakeholders knew everything—the good, the bad, and the ugly. He would personally respond to every employee e-mail he received. He’d wander the halls and factories and really talk to people. He’d send frequent company-wide updates. Mulally and his executive team also began inviting guests to their BPRs—engineers, analysts, technicians—as well as soliciting their feedback on the meetings.

But that wasn’t all they did. In a sweeping move to ensure that all employees understood the company’s path forward (i.e., “awareness for everybody”), Mulally and his team worked with Ford’s head of Human Resources to design a small blue card they gave to every employee in the company. On the front was the company vision, under the headings of “One Team,” “One Plan,” and “One Goal.” On the back were the expected behaviors that would get them there. It would be easy to dismiss this as mere optics, or a superficial HR stunt aimed at artificially engineering employees’ loyalty, but for Mulally, these weren’t just words on a laminated card—they were a way of life. As Hoffman explains in American Icon, “it was all there, everything he wanted Ford employees to know and understand.” As Mulally passed them out, he made a joke that wasn’t really a joke: “Take two of these and call me in the morning. It’s the cure for what ails you.”

Just months after Mulally asked Bryce Hoffman about the stories being leaked to the Detroit News, they stopped completely. Mulally again called Hoffman. “Bryce, there are no more nasty articles about Ford in your newspaper.”

“I know,” he replied. “That’s because there are no more messages on my answering machine.”

“Why do you think that is?”

“Well, it’s pretty obvious,” Hoffman replied. “You’re listening. You’re including them. They know what’s going on. They don’t need to call me anymore.”

By opening up the channels of communication, Ford had fundamentally transformed its relationship with employees. By the time Mulally retired in 2014, morale was at an all-time high of 87 percent (for comparison, the average engagement level in the United States that year was 31.5 percent). Thankfully, his successor was committed to sustaining a culture of awareness for everybody—a culture where leaders modeled the way, where it felt safe to share the truth, and where a rigorous, ongoing process supported the free flow of feedback throughout the organization. But wait—who was Alan Mulally’s successor? You guessed it. It was none other than Mark Fields.

*1 One board member called this brief but stirring speech the most moving one he’d ever heard in a boardroom.

*2 “Our expected behaviors and culture: People first; Everyone is included; Compelling vision, comprehensive strategy, and relentless implementation; Clear performance goals; One plan; Facts and data; Everyone knows the plan, status, and areas that need special attention; Propose a plan, positive “find a way” attitude; Respect, listen, help and appreciate each other; Emotional resilience…trust the process; Have fun. Enjoy the journey and each other.”

*3 Dalio codified his credo in a 123-page document containing 201 of his most strongly held life and management principles. The tome is required reading for new hires, and Dalio often uses it as the basis for nightly homework assignments for employees.

*4 The seeds for this process came from Patrick Lencioni’s excellent book The Five Dysfunctions of a Team, which I consider required reading for all current and aspiring managers.

*5 If your team isn’t already familiar with the 3R Model for getting feedback from chapter 8, I strongly suggest that you briefly review this process when presenting the ground rules.

*6 I’m often asked why I suggest this structure (i.e., all team members answer question 1, then everyone answers questions 2 and 3) rather than having each team member deliver all their answers at once. First, hearing every team member’s answer to the same question at the same time, versus answers to multiple questions at once, is the best way to spot patterns. Second, I find that the urge to deliver all answers at once often stems from a misguided desire to “soften” the negative feedback (“If I tell Doug what I like about him first, it will be easier to tell him what I don’t like.”)—but this isn’t the way to build a lasting culture of candor. Self-aware teams bite the bullet, follow the ground rules, and give it to each other straight!