A True Story of Creating a High-Performing Culture With "The Gift of Red"

Companies are under pressure to deliver better performance at lower costs in today's competitive environment. This requires leaders to build strong cultures where employees collaborate effectively and share knowledge across teams.

Organizations should adopt a time-tested approach called the "Gift of Red" to achieve these goals. Rhythm Systems has utilized this concept for over 15 years, helping companies execute through better leadership and accountability. We have found that the key to building high-performance cultures is permitting employees to speak their minds without fear of reprisal or punishment. I recently spent some time with a customer of mine that I have been working with for years; here is that story.

How do you define a high-performing culture?

It was going to be a bad day. Tony received news from his supplier in China last night that they could not get critical components shipped and delivered in time to meet his deadlines. It seems like everyone has their own issue with their supply chain. His first thought was, "It's not my fault. I did everything on my end, but the supplier can't get their shipment to us, so I will provide a status of "GREEN" because I did everything right on my side."

But this did not feel right to Tony. He recalled his CEO sharing that if a goal is in danger of not being met on time, it should be stated RED. His internal chatter continued, "Man, I hate being red on this priority. It's not my fault. I don't want to be embarrassed in our weekly meeting that's about to begin. But Jack (his CEO) thanked someone a few weeks ago for sharing a RED status instead of embarrassing or even telling him off. And it was ok. Ok. I think I should status it RED and give everyone a heads up that we will have a problem in about nine weeks from now". Tony took a deep breath and braced himself for the meeting.

What does it take to create a high-performance culture?

Then the weekly meeting started. Regarding this priority, Tony shared sheepishly that it was RED and that the supplier could not get transportation arranged in time to make the deadline. Jack smiled and reassured Tony, "Tony, thank you for providing today with the gift of red. We still have nine weeks, and you were courageous enough to share the issue today. This means we won't be blindsided or surprised, and we have nine weeks to solve this problem." Tony breathed a sigh of relief. Jack continued to lead a discussion to explore ideas on how to solve this problem. The team devised three possible ideas to fix the issue before it became more significant. Tony and two other team members were tasked to explore these ideas to see if they would provide solutions in time for their deadline.

How to use the gift of red as an early warning system for business

What we can all learn vicariously through this real-life example (actual names and company have been hidden to protect the heroes) is the following:

Encouraging team members to warn early on projects and goals that are in danger can save critical projects. Let them know that this is your early warning signal, and the earlier you can hear it, the more time you have to adjust to allow you to hit your quarterly rocks and priorities.
If you have nine weeks to solve a problem, you will have many more options available to find solutions compared to being surprised with one week to deliver on a deadline. Don't waste this opportunity; use the challenge to make adjustments and get back on track.
There are many interdependencies. Should marketing make adjustments to their schedule due to the lack of supply of the product? Is purchasing exploring other options to get the material? What other cross-functional team needs to be brought in so that we can avoid creating departmental silos.
The priority, or project, is red - not the individual. We have to make sure that we attack the problem, not the brave (and smart) person to bring us the problem early when only a slight course correction may be needed.
Team members are naturally embarrassed when they have to report bad news and will try their best to rationalize why it's not bad enough yet to report it. But you want bad news early to solve the problem and keep the teams aligned.
Does your work culture and language provide you the advantage of the "Gift of Red"? Do you thank people when they deliver bad news? Do you encourage such sharing intentionally? Do you treat it like the early warning system in a business that it can be?
Does your team move to a criticizing and excuse-making discussion? Or do they get galvanized by the problem and hand and shift to a solutions mindset?
Create a culture of team accountability. Accountability is the process by which individuals are held responsible for their actions and decisions, and this responsibility extends beyond the individual to include the entire team. Team members must be willing to accept responsibility for their own mistakes and those made by others on the team.
Company culture is best in companies where employees feel empowered to contribute to the high-performance company and provide room for employee growth and development.
Give regular feedback to your employees. Don't wait for performance reviews to meet with your employees - the employee experience is every day, not just once a year! If you aren't checking in often, you'll have much higher employee turnover as things linger that could have been avoided.
Track employee KPIs on a regular rhythm of work, especially those that track employee engagement and growth. It is hard for you to motivate employees; they need to be motivated themselves, and letting them know how they are being measured will empower employees to control their own careers.

How do you get started with a high-performance culture?

Culture is intentional, even when you think it is unintentional. If you want a high-performing culture that can have candid conversations to solve problems, you need a rhythm of work that will provide the process, language, skills, metrics, KPIs, and OKRs to solve such issues as they arise. Doing this well will help you address problems before they become crises. Just like Jack's CEO did in this story, you will need to create a language that promotes the sharing of bad news to turn it into action that yields performance even when there is bad news. The intentional use of phrases like "thank you for the gift of red" is one of many language cues that create a culture of performance with accountability to results without unnecessary negative energy.

Let me know if you would like to learn more about the language of performance or if you would like to share your own story of success.

Patrick Thean