From the October 1999 issue of Startups

Dan Caulfield, 32, runs what many would deem a successful venture: $4 million in 1998 sales with 60 employees. So when the founder of Hire Quality Inc., a Chicago firm that matches current and former military personnel with prospective private-sector employers, announced he was going to dramatically change his business model, he expected to catch some flak. But one criticism bothered Caulfield the most: "You're not focused!"

"A year ago when people would say I was unfocused [about my business model], I took it very personally," Caulfield says. "I'd think to myself, `You're not as smart as I am. You obviously don't understand what I'm saying.' "

Approximately a year later, someone Caulfield deeply respects and trusts confronted him with the same criticism. This time, the entrepreneur listened. "I came back from that meeting and went directly to my business plan and worked on it for several hours, trying to simplify and clarify it. That was one of those moments in life where I finally said, `They're right. I have to go back and fix something.' "

No matter how successful you are, you'll eventually face criticism, whether from customers, other entrepreneurs, family and friends, or even employees. How do you effectively handle criticism and keep yourself and your company moving forward? Here are five tips:

1. Listen openly. "When people say something to me that I don't like to hear," Caulfield says, "I immediately stop, take a deep breath and try to find out why they said it. [The criticism] might not be true, but what's more important is that the person perceived it as true. Therefore, I need to find out how I can change the person's perception or address the facts [if it is] true."

2. Don't take it personally. It's easy to want to vindicate yourself when you feel unjustly criticized by, say, a customer. But no matter how off-base a customer's complaint might be, resist the temptation to lash back. Otherwise, you risk losing that client--and the potential referrals he or she brings to the relationship. Who knows? The person could be going through a tough divorce or dealing with a loved one's terminal illness. Cut people some slack.

3. Get a second opinion. Not everyone has your best interests in mind. Some people, for example, will deride you out of envy. When you sense this is the case, don't get defensive. If you have to, force a smile and say "Thank you for your feedback. I'll take some time to evaluate what you said and see if I should make any changes based on your suggestions." This will help you maintain your composure. Then consult someone you trust to see what part, if any, of the criticism is valid.

4. Ask yourself "What can I learn from this criticism?" For example, suppose a customer complains that the late-payment policy outlined in your contract is grossly unreasonable. If you take the posture of wanting to learn from this criticism, you may discover that other customers are turned off by the policy as well, revealing a problem that, if ignored, could hurt your sales in the long run.

5. Get used to the heat. If your goal is to avoid or suppress criticism, you'll consistently feel discouraged, angry, frustrated and ready to give up your entrepreneurial dream. Instead, make peace with the fact that as long as you're the Big Kahuna, you're going to be a prime target for criticism. When people point out that you're not perfect, take solace in the knowledge that you're in good company.

Fire Drill!

When you find yourself under fire, for whatever reason, here are three quick tips for taking the heat without getting burned:

1. Stop! Take a deep breath and count for as long as it takes to calm yourself down. Realize that a calm response will help you defuse the situation more quickly than a vigorous defense.

2. Drop! Put down your defenses. Listen openly and ask questions to understand the possible root causes of the criticism. You may learn valuable lessons that benefit you and your business--if you look for them.

3. Roll! When you roll with the punches, you're less likely to get hurt by them. Remember, all entrepreneurs have shortcomings. Mature business owners admit this and take criticism in stride, often laughing at themselves in the process.

Contact Sources

Hire Quality Inc., (800) 414-4733, http://www.hire-quality.com

Sean M. Lyden (seanlyden@mindspring.com) is the principal and senior writer of The Professional Writing Firm Inc., a Kennesaw, Georgia, company that specializes in ghostwriting articles. Lyden writes frequently on motivation, management and marketing issues.

What psychological obstacles to success are you trying to overcome? Tell us at bsumag@entrepreneurmag.com