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The Best Business-Building Tool? Employee Feedback

It's easy to see feedback as something that only relates to a product or service. But feedback can be a powerful tool in many other ways.
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Entrepreneurs are typically amazingly good at handling feedback--at least when it comes to a product or service. They are knee-deep in the process of creating something cool, and they are open to any criticisms, feedback, and minor tweaks as long as they lead to a better product. And that's often what leads to a stellar, groundbreaking product.

Feedback about their leadership style, the financial decisions about the product, or how they handled a hostile customer? Not so much. It's too easy to see feedback as something that only relates to formal opinions about a product or service, not about a company process or leadership approach. In fact, a new book by Sheila Heen and Douglas Stone called Thanks for the Feedback: The Science and Art of Receiving Feedback Well makes it pretty clear that feedback can come in all shapes and sizes. Sometimes, a non-response about an issue from an employee is feedback. Sometimes, it's a sideways glance.

"In the early stages of a company, you as the the founder are concerned about the product or services you are creating, and that's overriding everything you do," says Heen, speaking to Inc.com. "That can mask a lot of people issues."

Heen told me that startups often have highly rigorous processes related to product feedback. (In my view, the whole concept of "the pivot" is about adjusting and adapting the product or service--but that's a different topic.) She says that feedback about the product does not translate well into feedback about how a company founder works with other people or if you dropped the ball on an issue. It's a different loop entirely. In leadership, she says, product development is often about what the founder knows and what he or she is capable of. At an early stage, it's much harder to recognize that you might have to bring in people with a different skill set in leadership.

Here's a simple example. Say you are starting a company and want to make a new mobile app. Then you realize you don't have any programming or marketing skills. Simple solution. Just hire people with those abilities. A focus on product usually means a focus on employee skill sets. Yet, you can't really replace yourself. You are typically stuck with whatever leadership skills you have, so the only answer left is to learn.

The concept can perpetuate as the company grows and you add more employees, some of whom may have similar attributes. Heen says, if the founder of a company is skilled in one area but doesn't listen to feedback about his or her leadership style, then the middle managers might suffer the same "feedback averse" ailment.

"The startup culture is driven by the founder's personality. If the person does not give people honest feedback until there is a crisis and then he yells at them, that is the tone. And that will be the tone for a while, so it's notoriously difficult for entrepreneurs to see their own blind spots. They are a particular breed of outsized skills," Heen says.

The solution, of course, is to ask for more feedback, but that can be extremely difficult in the tense early days of a successful company. Heen says the stakes are higher early on, and people in a small company tend to think in extremes--feedback leads them to think they are a total success or a total failure, that they are really good at something or really bad. The spotlight is superbright and any problems look more pronounced.

Worse yet, when employees in a successful startup do ask for feedback, the expectation is that the person giving the feedback has to give a really smart answer.

Heen says the solution is to lower the stakes. It's important to ask for one simple thing you can change in your leadership style. When you perceive someone could be providing useful feedback--even a pause before an employee responds or a weird look during a meeting--company founders in particular need to ask tough questions and get the feedback they need in order to grow, change, and improve in their leadership style.

Meanwhile, founders also need to be careful about shifting the blame. It's too easy to cast off good feedback and just say it's because of some external circumstance.

"Founders of companies fall close to the blame-shifting end of the spectrum," says Heen. "If the product launch doesn't go as planned, entrepreneurs might be quick to call people out. You have to work really hard to bring people in to supplement your own capabilities. And you have to work really hard to overcome your own deficiencies."

In the end, feedback reveals weakness and shows where you should improve in leadership and in many other areas. It's the most valuable business-building tool ever invented. How you use feedback can make all of the difference in whether the company--not just the product or service--proves to be a major success.

IMAGE: Getty Images
Last updated: Jul 11, 2014

JOHN BRANDON | Columnist

John Brandon is a contributing editor at Inc. magazine covering technology. He writes the Tech Report column for Inc.com.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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