The Birmingham Yardley MP warned today that the party will see more crushing defeats like the last general election if it does not recognise politics has changed in a "fundamental way".
The long-term Corbyn critic also warned that Labour is in "big trouble" if it cannot win back the trust of its working-class base.
Ms Phillips became the third candidate to formally announce their bid to lead the party after it suffered its worst general election since 1935.
Earlier in the day she had been backed by former Grimsby Labour MP Melanie Onn who said her ex-colleague would be in a "very good position to be able to reach out to ordinary people".
In a statement, Ms Phillips warned that voters have lost trust in the Labour Party and stressed the need for the Prime Minister to be challenged with "passion, heart and precision".
Among her criticisms of the current leadership were the "woeful response" to anti-Semitism within the party's ranks and for Mr Corbyn's ambiguity on Brexit.
"We have got to be brave and bold and bring people with us, not try and look all ways. Trying to please everyone usually means we have pleased no one," she said.
"Now is not the time to be meek. Boris Johnson needs to be challenged, with passion, heart and precision. We can beat him. We need to speak to people's hearts, and people need to believe we really mean it when we do.
"Now is not the time to play it safe. What I've heard so far in this debate is totally inadequate to the scale of the problem. Voters have changed.
"We need to recognise that politics has changed in a fundamental way by electing a different kind of leader. More of the same will lead to more of the same result."
The MP, who supported victims of domestic abuse for Women's Aid before entering Parliament in 2015, said only "when we are clear and straightforward" will voters again back Labour.
"We're a party named after the working class who has lost huge parts of its working class base. Unless we address that, we are in big trouble," she added.
Tomorrow she will meet with former Labour voters in the Bury North constituency which the party lost to the Tories.
Ms Phillips also announced her candidacy on social media with a video in which she visited the North Wales constituency of Delyn that Labour lost to the Tories for the first time since 1987.
She joins Shadow Foreign Secretary Emily Thornberry and Shadow Treasury Minister Clive Lewis as those to have formally declared their bids.
Others are also expected to announce their intentions soon, with Shadow Brexit Secretary Sir Keir Starmer, close Corbyn ally Rebecca Long-Bailey and Wigan MP Lisa Nandy considering challenges.
But Normanton, Pontefract and Castleford Labour MP Yvette Cooper, who previously said she would consider her options over Christmas, was reported to have decided not to stand.
Ms Cooper fuelled rumours she would run over the weekend by saying Labour must resist “pressure to be a factional or narrow hard-Left party”.
But a friend told the Mirror: “The party membership is currently looking for someone that was part of Jeremy’s shadow cabinet, rather than somebody who has been in the actual cabinet under Gordon Brown.”
Ms Phillips would appear to be a relatively popular choice with the Labour members who will help select the leader
She came third in a YouGov survey of the membership behind both Sir Keir and shadow business secretary Ms Long-Bailey.
Sir Keir would beat Ms Long-Bailey, who is the favoured candidate of key figures in the current leadership, in a run-off 61 per cent to 39 per cent, according to the early survey.
But the other candidates will be hoping to boost their profiles with the race not expected to formally get under way until Tuesday and a new leader not expected until the end of March.
Labour's disastrous election performance that helped Boris Johnson's Tories win an 80-strong majority has been the subject of an intense post-mortem examination.
The party's Brexit position, Mr Corbyn's unpopularity and his ambitious left-wing programme have all been the subject of scrutiny.