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Why Creating a Culture of Feedback is Vital to Business Survival Startups operate in a constantly evolving environment where adapting and improving are essential. Feedback is an important tool for startups to achieve this. It helps increase productivity, improve decision-making and create stronger teams in a fast-paced environment.

By Roland Polzin Edited by Micah Zimmerman

Opinions expressed by Entrepreneur contributors are their own.

A startup is among the most exciting workplaces in today's business landscape. It suits problem solvers, people who love the challenge of figuring out how to get a promising idea off the ground. For others, what attracts them to a startup is the chance to be part of a company early on and see it through its growth stages.

But since startup environments can be unpredictable, working at one requires grit, flexibility, and openness to feedback. The last is particularly important because it directly contributes to team members' improvement. Feedback helps people understand why their actions bring certain outcomes. It also creates a team with a growth mindset.

Welcoming feedback is also crucial for helping the company grow. Startups must be agile and adaptable. They must innovate rapidly to suit changing customer needs while staying ahead of others in the field. Without feedback, companies grow directionless and people stagnate.

Related: How to Create a Culture of Feedback

How positive feedback benefits employees

It's simple but often overlooked: a little positive feedback goes a long way. Acknowledging when employees work hard or deliver exceptional work will help them feel valued, and their efforts are seen. Positive feedback also creates stronger relationships—after all, who doesn't like people who appreciate them?

Why constructive criticism is necessary, but tricky

While anyone would like it when their managers notice the good things they do, few people stay cheerful when others notice their shortcomings. Yet constructive feedback is an essential part of giving feedback. It can be difficult to deliver this type of criticism, though! To do this effectively, the first step is to focus on the behavior, not the person. The feedback a person receives should help them

Constructive criticism is essential for growth but can be difficult to deliver effectively. It is important to focus on the behavior rather than the person. The manager should show–through words and actions–that they are giving this feedback to be supportive. The message should contain specific, actionable steps the recipient can take.

Related: Open vs. Anonymous Employee Feedback — Which is Better?

Why give feedback, anyway?

I understand if managers or business owners might be reluctant to dedicate time to feedback. Especially in a startup, where there are endless things to do at any given moment. But letting your team know how they're doing leads to better performance. When employees receive feedback, they better understand what you expect from them. So they can align their work with your requirements and the company's broader goals.

Employees who receive high-quality feedback also gain a sense of ownership over their work. They can better identify improvements in their processes, which helps them identify obstacles before they become too big to handle.

For example, suppose you have a teammate who struggles with time management. Instead of telling them, "Just work faster," which is vague and offers no actionable information, you could give specifics on how they can stay on-task. For starters, you could review their list of things to do and help them prioritize these by urgency. When you teach someone how to course-correct once, they won't need repeated reminders in the future.

And this goes for peers, too. Feedback among team members of the same rank will help them build stronger relationships. Having a team that can let each other know areas of improvement without anyone feeling slighted is a special thing. These open lines of communication also allow people to address misunderstandings before they escalate.

Challenges of giving feedback in startups

There are many pros, but there are also challenges in giving feedback in a startup. For one, the pace at this type of company can be very fast. So, there could only be a small window of opportunity to give feedback about a crucial process before it becomes moot. This situation leads to missed opportunities for improvement.

Of course, you also risk losing valued employees when you give them feedback. Managers might be hesitant to provide honest thoughts on an employee's performance–they might be afraid of alienating their teammates.

Related: How Entrepreneurs Can Use Effective Feedback to Stay Resilient and Agile

How to deliver feedback

Given all these realities, the first thing to do is establish a feedback culture early. When people are used to opening up about work processes, managers need not worry about anyone getting hurt or missing the chance to say what they think. If you've established a different culture within your organization, turning it around is possible–it'll take a while, but it can be done.

Managers must also frame feedback so it considers a person's long-term growth. It's the difference between editing a junior software developer's code yourself and letting them know what needs to be changed. A manager who corrects the code might say that only the work matters. In contrast, one who corrects others' behavior shows that they care about their teammates, which builds trust and engagement.

How feedback contributes to startup success

Many successful startups have embraced the importance of feedback in their culture and have used it to achieve growth and success.

For instance, Slack, one of the most popular communication and collaboration platforms, encourages users to provide feedback to make decisions about future development. Another company that leverages feedback is Dropbox. Their "Smart Sync" feature, which lets users access files through the cloud, came from user feedback.

At Wing Assistant, we implemented a variety of mechanisms to solicit user feedback. Examples include NPS polls in our software product, email surveys (we are leveraging Voiceform to allow customers to speak their feedback freely), and one-on-one calls with customers conducted by our Client Success Managers. We also ask for feedback whenever customers leave us to monitor which areas need improvement constantly.

Feedback and its role in business growth

Letting your teammates know what works and what doesn't is crucial for their personal and professional growth. In the fast-paced, competitive world of startups, feedback is all the more valuable. But feedback isn't just for growing companies. By embracing and using it to drive innovation, companies of all sizes can reach their goals much faster.

Roland Polzin

Co-Founder & CMO

As a former German Army officer, I made the unusual decision to become a tech entrepreneur in Silicon Valley and found Wing. My background provides me with a unique perspective on leadership, decision-making, and change management, and I hope to help others drive change and progress for the better.

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