- ELITE TEAM TACTICS
- Posts
- The $15 Billion Lesson: Ford CEO's Secret Weapon (Psychological Safety)
The $15 Billion Lesson: Ford CEO's Secret Weapon (Psychological Safety)
Ford's turnaround story: The power of psychological safety and how to use it to increase team resilience and skyrocket profits.
Coming up in today’s edition:
Ford CEO’s Framework That Transformed Their Fortunes.
Three Tactics To Improve Psychological Safety.
An Exercise To Build Trust Within Your Team.
THE FRAMEWORK THE CEO OF FORD USED TO TURN AROUND IT’S FORTUNES
In 2006, when Alan Mulally became CEO of Ford, the company was in dire straits.
The iconic automaker had lost $12.7 billion that year, its worst financial performance in history.
The internal culture was toxic, characterised by fear, blame-shifting, and a reluctance to admit mistakes or surface problems.
Why? Here Are Two Common Cultural Issues To Watch Out For:
Fear-Driven Leadership
Ford executives were terrified of admitting failure in a culture where bad news was met with blame or dismissal.
Leaders frequently presented glowing reports during meetings, even when major projects were struggling or failing.
No Transparency
Issues were hidden or downplayed, leading to poor decision-making and repeated crises.
Teams operated in silos, avoiding cross-functional collaboration out of fear of stepping on toes or exposing vulnerabilities.
Mulally knew that Ford’s turnaround wouldn’t just be about restructuring or cost-cutting—it would require a radical cultural shift.
At the heart of his strategy was creating psychological safety: making it safe for leaders and teams to surface problems and collaborate effectively.
Mulally’s Five Pillars To Turn The Ship Around
1. Launched “No-Blame” Weekly Business Plan Review (BPR) Meetings
What He Changed:
Mulally required all senior leaders to attend a weekly BPR meeting to discuss the company’s performance.
These meetings became a forum for open communication, with a clear rule: no blame for surfacing problems.
How It Worked:
Each leader was asked to present their projects using a colour-coded system:
Green: On track.
Yellow: Potential issues but manageable.
Red: Serious problems.
Initially, everyone marked their projects as “green,” even though Ford was haemorrhaging money.
So here is what Alan did 👇
In one of the following meetings, Mark Fields (then Head of the Americas) bravely marked a key project as “red.”
The room fell silent, expecting Mulally to reprimand him.
Instead, Mulally clapped and said, “Great visibility! Who can help Mark with this?”
This moment set the tone: it was safe to admit problems without fear of backlash.
2. Celebrated Cross-Functional Collaboration
Breaking Silos:
Mulally encouraged departments to help each other solve issues.
For example: When a production delay was flagged, other teams brainstormed solutions rather than ignoring it as “not their problem.”
The Result:
Ford’s culture began shifting from internal competition to collaboration, where teams genuinely supported one another.
Ford’s product portfolio became more streamlined and focused which led to successful launches like the Ford Fusion and Ford Escape.
3. Modelled Vulnerability as a Leader
Admitting His Own Weaknesses:
Mulally openly acknowledged Ford's challenges and admitted he didn’t have all the answers.
This vulnerability signalled to others that they didn’t need to pretend to be perfect.
Positive Reinforcement:
Mulally consistently praised openness and transparency, reinforcing that the new culture rewarded honesty, not perfection.
Mulally introduced his mantra: “One Ford.”
You can watch how he delivers the message in less than five minute on stage here:
This philosophy emphasised collaboration, shared accountability, and a unified vision across the organisation.
Everyone from executives to factory workers understood they were working toward the same goals.
5. Eliminated “Business Jargon”
Mulally banned speak and over-complicated reports.
Meetings were simplified to focus on actionable issues, making it easier for teams to communicate openly.
The Result? Ford’s Epic Turnaround Story
By 2009, while competitors like GM and Chrysler declared bankruptcy during the financial crisis, Ford posted a $2.7 billion profit.
Mulally also refused a government bailout, strengthening public trust in the brand.
Issues were resolved faster because teams felt safe surfacing problems early.
By removing fear of punishment, Mulally allowed leaders to focus on solving problems rather than covering them up.
When people feel psychologically safe, they share ideas, take risks, and invest fully in their work.
THREE ADDITIONAL QUICK WINS TO BUILD PSYCHOLOGICAL SAFETY IN YOUR TEAM
Share Failures With Your Team
By openly sharing failures, you can:
prevent the duplication of unsuccessful efforts
stimulate the development of new ideas
foster a culture of continuous experimentation.
One tactic that has worked a treat is the “Deck Of No Shame” where employees reflect on where they went wrong, share the lessons they learned from it and signal to others that it’s essential to experiment for the team to be successful.
Deck of No Shame - Wiser
Strong cultures leverage their mistakes to create learnings.
Make sure the leaders in your company share failures early and often.
This information represents a form of intellectual capital: team learnings + foundations for future experiments.
Hug The Messenger, Don’t Shoot Them
"Shooting the messenger" has a detrimental impact on team performance and psychological safety.
It creates a culture of fear and silence, where individuals are afraid to speak up or share concerns.
So next time someone brings you negative news, let them know how much you needed that feedback so they always feel safe enough to tell you the truth.
Tell them how much you need it to keep improving in the future.
Tackle Your Team’s Undiscussables
In 2022, Theranos founder Elizabeth Holmes was sentenced to 11 years in prison after being convicted on four counts of defrauding investors.
But the lies from the leadership team could have been spotted 14 years earlier when Theranos engineer, Aaron Moore, created a prank advert for a prototype of the company’s blood testing device, calling it “mostly functional”.
Even though this was taken as a light hearted joke at the time, in hindsight this shows a desperate bid from inside to raise a taboo subject that the device didn’t work and the CEO Elizabeth Holmes and her top team were unwilling even to acknowledge concerns that were obvious to many of their engineers.
Moore’s actions massively highlighted the undiscussables at Theranos.
They exist because they help people avoid short-term conflicts, threats, and embarrassment - typically described as the elephant in the room.
Most teams suffer from all four categories of undiscussables according to MIT Sloan here. So use this checklist below to see if this is an underlying issue with the psychological safety in your team:
Start with ironing out the first two sections in the checklist above (this could be as simple as implementing a check-in routine at the start of meetings to iron out niggling concerns).
Then work with individual team members on the second two to help build the psychological safety when the group come together.
A QUESTION TO ASK YOURSELF…
How well do you actually know your teammates?
According to Polyvagal Theory, our brains are wired to respond to the social conditions, social cues, team mates and working environment around us.
The vagus nerve, which plays a key role in regulating our heart rate and digestion, helps us gauge whether we feel safe or threatened in social situations.
When employees feel safe and respected, they're more likely to contribute new ideas and invest more effort into their work, leading to greater productivity and innovation.
When employees are in a constant state of stress, they’re more likely to feel threatened and not openly acknowledge mistakes or seek feedback.
Simple practices, like allowing time for casual conversations before meetings or scheduling collaborative work sessions can deepen relationships.
But the one exercise/question from the Marketing Leadership Academy that builds the highest levels of trust, connection and psychological safety is called: Mask Off.
How To Do The “Mask Off” Exercise With Your Team
Make sure everyone feels comfortable sharing ahead of the session.
Give each person five mins to speak about three foundational topics:
Key events that have defined who they are.
Something people don’t know about them which would help people understand them more.
The moments, decisions and events that have defined their life and extended family.
Importantly, nobody is allowed to interrupt or feedback during this time.
This exercise will give your team a window into each other’s whole self, building a strong foundation for psychological safety to be built.
You can see the power of exercises like this by the emotion in the South African rugby team’s camp on the road to winning their second World Cup in a row:
Hope you enjoyed this week’s tactics. I’ll be back next Sunday with a new lineup 👋 - Alex
P.S. Did you get something useful from this email? Do me a solid by sharing this link with 1 newsletter pal… 🙏
P.P.S. If you’re ready to take your leadership to the next level and gain personalised guidance tailored to your team’s needs, the Elite Team Leadership Programme is your next step. Join a community of senior leaders and founders, where you’ll receive expert training, actionable support, and the accountability needed to unlock your team’s full potential.
If you are about to build a high-performance team, there is no way you want to miss this!
I’ve known Alex for more than a decade and without a doubt I can say that he is the best at what he does.
What did you think of today's newsletter? |