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Building A Culture Of Honest Feedback And Strong Results: The How-To By welcoming tough feedback, not only do you improve your company's responsiveness and innovation, but you also set it up for sustainable growth.

By Anton Skornyakov

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In the business realm, especially among top executives, vulnerability is frequently perceived as a sign of weakness. Leaders are typically viewed as paragons of relentless strength and absolute certainty. Yet, adopting a stance of vulnerability can be a profoundly strategic decision for a CEO, with substantial effects on the company's financial performance.

Entrepreneurs typically face the most difficult decisions with the least amount of information. Whether you are choosing a business partner, picking a project to invest in, or deciding on the direction for your marketing campaign, it's always done under conditions of high uncertainty and unpredictability. Here, the Pareto Principle is always at work. Only 10-20% of features in most apps are used by customers, and around 10-20% of startups that get venture capital funding actually make money for their investors. In such risky situations, it's crucial for entrepreneurs to keep an open mind, and be willing to rethink their choices and plans regularly.

Yet, many businesses, including startups, often continue investing in projects that aren't working well beyond the point they should. Why does this happen? A major reason is the cultural fear of admitting failure or mistakes. This hesitation is based on the false belief that every investment must produce a profit- a myth that can result in even bigger losses.

Creating an environment where it's safe to express doubts or concerns can help pinpoint struggling projects before they use up more resources. Consider this: what percentage of your business's ideas are ultimately discontinued? As an entrepreneur, your behavior and mindset set the tone for your entire business. If you act as if you never make mistakes, a comfortable stance for any human, you unintentionally create a culture where everyone aims for perfection, and fears criticism. In such environments, team members might be reluctant to speak up, or challenge the way things are done, particularly if it means critiquing ongoing projects. This often creates a false sense of harmony. And when criticism does finally surface, it can cause significant disruptions, leaving a mess that's hard to clean up.

For a business to succeed, it's essential that team members regularly pinpoint and address weaknesses without getting caught up in personal conflicts. Accepting that not finding the perfect solution on the first attempt is a normal part of work, not a personal failure, is key.

Related: Transforming Customer Feedback Into Actionable Business Outcomes: The How-To

Building A Culture Of Constructive Criticism

Here are three key strategies to create a business environment where tough feedback is seen as a strength, not a weakness:

1. Lead by example Show humility, and be open to feedback. Demonstrate how much you value others' input by how you react and adapt- whether that means changing your strategies, or openly discussing your own mistakes. Make it a daily practice to:

  • Seek advice from your team
  • Openly confess when you don't know something
  • Admit to a mistake

These actions set a positive example for everyone. But be careful, it's crucial how you internally view these admissions- whether as failures or as opportunities, to prevent bigger issues in your business.

2. Establish safe spaces for feedback Changing a business culture often requires new structures that support the desired changes. One effective method for encouraging honest feedback is "ritual dissent," developed by Dave Snowden.

Here's a short version of how it works:

  • A team member presents a plan or idea to a group as if it were potentially problematic.
  • The group's job is to find as many faults as possible, and critique the idea thoroughly.
  • The presenter, facing away from the group, listens without responding, focusing only on the feedback that resonates.

This setup, where the presenter cannot see the group and does not interact directly during the critique, promotes honest feedback, and helps the presenter absorb it without becoming defensive. This method avoids quick agreement, and shallow group discussions. After a ritual dissent session, asking participants to reflect on their experience and the value of harsh criticism can lead to valuable insights.

Initially, many may find this uncomfortable, but it helps them understand the importance of critique. This reflection can initiate meaningful discussions and mark the beginning of a shift from a feedback-averse to a feedback-seeking business culture. Implementing these approaches can transform how your startup handles feedback, turning what might seem like harsh criticisms into opportunities for growth and improvement.

3. Embrace diverse perspectives As an entrepreneur who is open to vulnerability and actively seeks out feedback, you must also ensure that your business is not isolated from external viewpoints.

The famous advice from Steve Blanc, a Stanford entrepreneurship professor, to "get out of the building," highlights the importance of this. As the leader, it's crucial for you to build connections with people outside your immediate circle. These might be current or future customers, users of your products, or industry experts, some of whom might need to sign confidentiality agreements, or be compensated for their insights.

Yes, you're asking these outsiders to critique your business, and you might even pay them for their feedback. But the benefits are worth the investment, as this external feedback helps you separate the viable ideas from the ineffective ones. Many businesses shy away from this approach due to fear, but those who embrace it gain a lasting competitive edge. Incorporating vulnerability into your leadership is not a sign of weakness; rather, it's about creating a transparent and flexible business environment that can adapt and thrive.

By welcoming tough feedback, not only do you improve your company's responsiveness and innovation, but you also set it up for sustainable growth. Entrepreneurs who recognize the power of vulnerability prepare their businesses to succeed in a fluctuating market, demonstrating that true strength often involves recognizing our own limits.

Related: Maximizing Workplace Success Through Mental Well-Being: The How-To

Anton Skornyakov is a certified scrum trainer with Scrum Alliance and Managing Director of Agile.Coach based in Berlin, Germany. His new book, The Art
of Slicing Work
, is a real-world, low-jargon guide that teaches the main skill of a successful manager in the 21st century– the ability to master unpredictability.
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