The Art of Giving Negative Feedback: Part 2 – Build a ‘Feedback Process’

If you’ve set the right context within your team – established objectives, focused on professional development and clarified expectations – the next step is to make feedback part of your company DNA and build a ‘feedback process’. For me, having a structured process for feedback is the one of most critical elements that needs to be in place for any organization. I’m a strong believer that only those companies that focus on continuous improvement – both on an organizational and personal basis – thrive over the long term.

When I first began scaling my company after the dotcom crash, I struggled with how to how to train a very young team in online media, a space that was still very much in its infancy. There were few established roles and job descriptions and no proven processes to follow. We needed to write our own playbook, from establishing how to manage editorial functions to how best to service clients. I knew our culture needed to be nimble and  learning-focused to support multiple iterations of our business model and a rapidly evolving set of processes. To do that, I needed to create a structure for feedback and improvement.

I started by first putting in place a simple system for quarterly performance reviews. Both the manager and the report would bring for discussion a list of areas in which they were doing well and areas for improvement. Giving the report a hand in setting parameters for a discussion about their performance immediately established the reviews as constructive business conversations rather than top-down evaluations. During reviews, both the manager and report were encouraged to give frequent feedback – both positive and negative – and check in on progress toward areas of improvement from the previous review.

Afterward, the manager and I looked closely at any areas of disconnect in a particular employee’s self-assessment; for instance, items that were listed as an area of success, but were really an area for improvement. I’m a strong believer that reviews shouldn’t be a surprise in either direction, but reinforce the feedback given by the manager between reviews. When a review is a surprise, it’s a good indicator something’s wrong with either the employee’s ability to self-assess or the manager’s delivery of feedback.

We next added a 360 degree feedback mechanism where the manager emails everyone with whom the report works – at all levels – and asks for areas of success and improvement. Positioning the importance of candid feedback to the employee’s peers and stressing confidentiality of the feedback is critical to this process. Sometimes it takes a cycle or two for a new hire to fully engage in delivering feedback about their peers, but once they do it quickly becomes constructive. I can’t remember an instance where it’s led to a problem in more than 7 years and its uncovered some substantial areas for improvement which might have been overlooked had we depended only on managerial input.

As our organization has matured and grown, we’ve moved to more formal and rigorous reviews twice per year that are tracked electronically and can be better analyzed for trends, using a web-based interface called GoalSpan. But the core principles have remained the same:  Have a consistent, transparent process that is prioritized across the organization. Gather assessment from both the manager and the report. Leverage 360 degree review feedback. Give continuous feedback and improvement between formal reviews. Focus on having constructive dialogue about professional development.

I’m curious what process you’ve built for feedback in your organization or on your team. How often do you conduct reviews? How extensive are they? Any tips or best practices for making them work well?

Posted in Entrepreneurship, Leadership, Management | Tagged , , , , , | 1 Comment

The Art of Giving Negative Feedback: Part 1 – Set the Right Context

Learning to give negative feedback not only constructively, but gracefully, is one of the toughest and most important lessons of being an effective entrepreneur or business professional because it’s one of the skills that elevates you from being a manager to being a leader. However, if you’re like me, it’s probably high up there on your list of least favorite things to do. Often it’s not fun, but it’s essential to building an organization or team that’s always improving and advancing.  

And it doesn’t need to be that painful. If you’ve set the right context for your organization or team and if you deliver the feedback appropriately with the right ‘feedback foundation’ (which I’ll address next week), there is no need to be anxious about delivering feedback. It’s even possible to create an organization that embraces it.

negative-feedback-graceTake a moment and recall the last time you heard surprising feedback from a frustrated co-worker, manager or even an upset significant other. How much of your own reaction was driven by the ‘out of the blue’ nature rather than from the content of the feedback itself? When you’re surprised, it’s easy to spend more time defending yourself than working on a solution.

At its essence, delivering negative feedback gracefully is first about creating a culture where it can be delivered within the proper context and with the right structure. I’ve found when leaders take the time to build the right foundation, they create teams that are pre-wired to think critically when feedback is delivered rather than be left ‘reeling’. Take the time to build that right foundation.

Create Context

As you build you team or company, make sure that you’re creating an environment where you can frame feedback constructively as part of executing on a shared vision. For me, that means being rigorous in establishing context and setting expectations upfront both at the individual and team level:

  1. Set Objectives – Establish where your company or team is going. Maybe you’re launching a revolutionary new product or trying to double the size of a company within 3 years. Make sure your team is on board and gets it. It’s much easier to deliver negative feedback in the context of shared goals. For example, imagine a scenario where your team is counting on one of your developers, but you’re seeing too many errors in his or her code. Framing the feedback around pre-established and agreed upon team’s goals can be very powerful in changing behavior and driving improvement. You’re underscoring that the feedback isn’t about your dynamic with the developer, but about a team mission and bigger picture objective that is at risk.
  2. Embrace Professional Development– Take the time to develop a shared understanding of professional development objectives – both strengths and opportunities for improvement – with each person on your team upfront. Simply, if you know where your team members want to go professionally and you’ve had discussions about their career objectives, it’s a lot easier to identify roadblocks and areas for improvement. For instance, if you know your IT manager wants to be CTO one day, then framing feedback within that context can be very effective.
  3. Clarify Expectations – Set clear expectations for performance and behavior before any feedback is given. Expectations can come in many forms from simple deadlines and minimum performance requirements to detailed metrics. I’ve found time and time again that if you and your team develop clear expectations and standards for performance, it’s a lot easier to give feedback when they aren’t being met. Make sure they are well documented and explicitly agreed upon by everyone.

Without a doubt, it’s a lot easier to give negative feedback if you’ve set the right context and you’re working together towards shared objectives and mutually agreed upon expectations. And feedback that is delivered in the right context can be incredibly motivating. However, as an entrepreneur, a CEO or a manager, how much time have you devoted recently to setting context? Think about your last week. It doesn’t happen overnight and requires consistent communication, but I’ve found if it is done right and combined with the correct ‘feedback foundation’, it makes those difficult discussions much easier.

In the meantime, I’m curious if anyone has any tips on setting context or shared objectives or examples of cases where they may not have set clear expectations and it came back to haunt them? 

Posted in Entrepreneurship, Leadership, Management | Tagged , , , , , , | 3 Comments

Sleepless in Business: Tips for Managing Stress and Catching ZZZs

Getting ZZZsIt’s to no one’s surprise that sleepless nights and stress go hand in hand with running a business, starting a company or working to advance your career. There is always something to worry about – an important sales meeting or pitch, a new competitor, technology problems, a difficult personnel review, cash flow or even a lawsuit to name just a few. And that’s OK. While business challenges are inevitable, we’re all human and worrying is a natural reaction. I’m a firm believer that in business, ‘only the paranoid survive’. But at what cost? Well at minimum, that cost is a lot of sleepless nights.

It’s one of life’s ironies that although we need sleep in order to solve problems effectively, it’s the problems that keep us up. However, during my 14 years of running a business and tossing and turning, I’ve developed three techniques to help manage stress, compartmentalize the problems I’m facing and get more ZZZs:

1. First, I ask myself if I’ll remember the problem or situation I’m worrying about and if it will still be impacting my business in 1 month, 2 months, 6 months, 1 year, 2 years or 5 years. For instance, an email from one of your investors has you really fired up. The tone seems disrespectful and you’re lying awake planning your response and worrying about the looming confrontation. Simply, ask yourself if you’ll remember the incident or email in 6 months. And be honest. How many of the emails you received in the last 6 months that got you fired up can you even recall?

If you’re lying awake, challenge yourself to really delve into the business impact or implication. Ask yourself what’s the best case or worst case outcome? Does it matter to the business? And as importantly, why does it have you fired up? Generally, I’ve found that I’m looking at the problem in the wrong way and often letting my ego or emotions get in the way. With the investor example, for instance, perhaps the email touched a nerve about a bigger concern I have about my investor’s perception of my company. In these cases, I challenge myself to be objective, put whatever’s worrying me into a broader context and assess how much it matters.

2. Second, I pick up a pen, jot down my thoughts and attempt to put the issue on paper.  It’s often the case that once I have my thoughts written down and they’re on my ‘to-do’ list for the morning, my mind releases hold of the concern.  And more often than not, I realize the next morning after some rest that the issue really is something that I’ll likely not remember in a year, much less a couple of months.

3. Third, if it is one of the few problems that will have a lasting impact, that’s another situation entirely. My response is to reach for a glass of wine and acknowledge that I likely have bigger problems than a few sleepless nights. As solace, I remind myself that it’s rare to find a successful business leader who hasn’t had to overcome countless gnarly, difficult business problems. I often repeat a quote from Mike Herning, the Chairman of my company – “If it were easy, everyone would be doing it.”

Why do these techniques work? First, as business owners, we tie up a lot of our passion and energy in our business and we tend to be obsessive-compulsive.  When channeled correctly, this can be critical for driving success, but often it also means we seek out problems, strategize excessively and over-analyze even the smallest details. When I look back at the hundreds of sleepless nights and the vast amount of time I’ve spent tossing over the past 14 years, only 20 to 25 were actually warranted in the bigger context of my business. These techniques are effective because they forces you to step back and assess the relative importance of the problem you’re facing within the bigger picture and approach it within the proper context.

Every stressor elicits a strong response, but the key is to throttle back your response and stress to the appropriate level. Being fresh and awake the next day is much more important than worrying about something that – in most cases – won’t have a long term impact on you or your business.

I’d be curious to hear how other business owners and entrepreneurs manage stress. Any other techniques you’ve found helpful? How do you manage stress when you’re faced with a really big issue that will impact your business two or even 5 years from now?

Posted in Entrepreneurship, Management, Tips, Work-Life | Tagged , , | Leave a comment

Simple Rule: Don’t Give Negative Feedback in Email (or Via Text)

Negative Feedback EmailIn my 15 years of being a CEO, there is one simple rule I follow: Never send negative feedback via email. That includes chat or text message and essentially anything electronic. Particularly for those of you in the workforce under 30, this might sound surprising since electronic communication has become such a ubiquitous and often preferred business communication tool. It’s fast, it’s efficient and it’s accessible everywhere. But it’s a terrible tool for delivering negative feedback. Why?

It’s easy to misinterpret: Even when written in an emotionally balanced manner, email messages leave lots of room for interpretation. Complicating matters, they’re also frequently skimmed especially if they’re long. Remember that negative feedback is one of the hardest to receive, so even the seemingly most simple and innocuous feedback can be misunderstood or hit a nerve. Also, keep in mind that when the message is electronic, controlling tone is always challenging. Unless you’re Earnest Hemmingway, you’re not going to get it right. If you find yourself typing ‘don’t take this email the wrong way’, then you’re better off delivering the message in person.

It’s too accessible: It’s so easy to shoot off an email when you’re frustrated, disappointed, fired up or after a glass of wine. I’ve seen it happen hundreds of times with contents ranging from annoying and poorly conceived to highly unprofessional. Being an effective leader is about controlling your emotions and measuring your response.

It eats up time: Keep in mind that the more time you spend on the email, the more time whoever you’re sending it to will spend digesting and responding. Too often you could be looking at a 2 hour exchange before you know it. Across an organization, this can be an incredible productivity sink.

It’s too easily shared: Finally, in the case where you might be really fired up, shooting off an email can quickly become incendiary and leaves an indelible record that’s easy to forward, post or even use in litigation. Email is easy to show to colleagues, friends or even a spouse, who’ll provide color commentary that you didn’t intend no matter how well written.

Now I’m sure that some of you are saying, ‘But sending an email is so easy. I’m better when I write it out and I don’t like giving negative feedback in person.’ Feedback is not about finding shortcuts; and it’s definitely not about finding the path of least resistance to deliver the news. If you prefer to write something out to organize your thoughts, do that – it’s something I often do – but use it as an outline to deliver that feedback in person.

I urge you to go back and look at your email exchanges. You’ll likely find you give negative feedback in email more often than you think and that it can cost you a lot more than it’s worth. So make it a rule: If you’re giving negative feedback, do it in person or, in this increasing remote business environment, pick up the phone or use Skype. You’ll be able to better read the other person, quickly clear up miscommunication and make sure your points get across correctly. You’ll also show you respect the person by setting aside time during your day. It’s ultimately far more efficient and effective, and creates a much more productive, positive work environment.

But the bottom line is that if you’re not comfortable giving negative feedback in person, it’s time to learn and develop that skill. Effectively delivering negative feedback is one of the most important business tools you can develop and essential for getting ahead. In fact, some of the people I respect most in business – including some who report to me – are exceptional at giving negative feedback in a way that is inspiring and leads to better performance.

What you think? Does this work for you? Does it fit the realities of modern communication? I’d recommend trying it for a month and if you do, let me know what happened. Stay tuned as next week I’ll be addressing the topic of negative feedback and offering some tips on how to deliver it constructively with impact and grace.

Posted in Leadership, Management, Uncategorized | Tagged , , , | 1 Comment

Curate Your Company Culture – How to Build an Apolitical Company Environment

Politics and drama are often seen as unavoidable fixtures in business and corporate life. Is it possible to create a culture that spits out drama and minimizes the politics? I know a lot of accomplished business people who take a Hobbesian view of the world and suggest that people inherently like to complain and gravitate to drama. They’d say that there is nothing you can do about it other than ignore it or join the fray. Some larger companies even encourage politics and see it as an efficient way to get things done.

The other day, a new hire told me that my company has an amazingly apolitical culture. He’d been at a number of companies in the valley and was pleasantly surprised. We have a team of 60 people and I’ve never had to worry much about politics. My company is generally drama free. Everyone comes in, works hard and gets their job done. Our culture isn’t perfect, but people get along and there’s very limited conflict or confrontation. I asked myself what I’ve done to create a constructive, apolitical office culture.

1. Set the Tone as a Leader
Stay calm under pressure and be objective. Don’t yell or lose your cool. As a leader, you’re always going to receive infuriating emails or that nugget of information that drives you crazy. When you do, make sure to slow down, take a walk or sleep on it. It’s important to be thoughtful and measured in your response. And if you need to give someone on your team feedback, do it in private and not in front of their colleagues.

2. Create an Environment of Fairness
Always question if you are being fair when making compensation, promotion or bonus decisions; and always encourage your team to do the same. Assume that in a small company, everyone knows what everyone else makes.  One tip is to envision how you’d justify a comp increase or comp for a new hire to others in the organization? How would they respond? What questions would they have? You’ll likely not have to do this, but it’s a good gut-check. If you can’t or if it’s a stretch, rethink.

3. Root out Drama
Have a zero tolerance policy for drama and take an active role in enforcing it. If two people are not getting along, immediately bring them in. If they aren’t on your team, give the same direction to their manager and actively participate. Don’t wait or procrastinate and don’t feel like you need to be the arbiter or solve their problems. Simply let them know that regardless of who is right or wrong, that type of behavior is unacceptable and not part of your culture. Either it stops or neither will be working there. Emphasize that you expect members of your team to be able to work these issues out themselves. Instead of taking sides, view yourself as curator of the culture you want to create.

4. Avoid Favoritism as a Leader
Make sure to avoid the perception of favoritism by reinforcing that you put performance above all else and that regardless of their position they have a chance to do well with you and with the company. Be clear about performance metrics for both individuals and teams and make them transparent. It’s OK to like those who perform better, but don’t fall into the trap of putting favoritism over performance.

5. Eliminate Whispering
If your team is whispering at their desks or around the water cooler and the conversation stops when you or others appear, you have a problem. Pull whoever is whispering aside and state clearly that whispering is not a part of your culture and makes people feel uncomfortable regardless of the subject. Personal drama should be left at home or discussed outside the office and sensitive work issues should be discussed in a private conference room.

6. Implement a Consistent and Thorough Review Process
For a long time as my company was growing, I conducted formal quarterly reviews for my entire team. We’ve since moved to mid-year and annual reviews, but the review process is a critical factor. It’s extremely important to make cultural fit and contribution a key component. Also, implement a 360 degree format where you get feedback from direct reports, other managers and colleagues. The easiest way to tell someone that they’re being a jerk or are not aligned with your company culture is to say it’s the general consensus and although you agree, you’re there to help.

7. Stay Above the Fray
As a leader, you need to be pristine. Don’t get involved closely in your employees’ personal lives. Don’t date or get romantically involved with anyone on your team as tempting as that might be. Lend an ear if necessary or some words of wisdom, but refrain from being a therapist or providing too much advice to avoid being pulled into personal drama.

8. Walk Around
Don’t spend all day at your desk or in your office. Get up every hour or two. Talk to people. You’ll be surprised about how much you can learn about what’s going on. Watch body language and try to get in front of issues before they occur. If your team knows you’re aware and care, they’ll behave differently.

9. Care
Staying apolitical doesn’t mean you can’t care for your employees. Care about your team and their personal and professional development. Care about your culture. Put in the time to listen. Host events consistently and get to know your team. Let your employees know you care about them.  Make sure to let your leadership flow downward throughout the organization. Your team is family, not a bunch of machines or replaceable parts.

What do you think? How important is minimizing politics in the corporate environment? I’m curious to hear others’ perspectives or experiences dealing with company politics and culture at their companies.

Posted in Entrepreneurship, Leadership, Management | Tagged , , , , , , , | Leave a comment

Tip: Hire people who can grow with your company.

Hire for GrowthThere’s a lot of advice out there about how to hire. Clearly you need people who are smart, proactive, self-starters, team players and have the right skills. The list goes on and on. But if you’re running a small, growing company and you want to find people who will stick with you for the long term, it’s not just enough to hire skill sets. Tip: You need to hire people who can grow and scale with your company. This is particularly important not only for key positions but I’d argue also for more junior positions as well. They are the ones who are going to be moving up the ranks.

If a candidate is too experienced, they probably won’t stay long. Not experienced enough, and you’ll quickly leave them behind. In hiring, probe a candidate’s perspective on career trajectory and professional development. Where have they been? Where are they going? Do they think of their career as a trajectory? Can you see them scaling with your company and taking on more responsibility? How about a leadership role as you grow? If yes, they have a good shot of being with you for the long term.

Posted in Leadership, Management, Tips, Uncategorized | Tagged , , , | Leave a comment

If you’re interested in startups, where do you fall?

Where do you fall? This is right on. If you’re in the middle, this clearly depicts both both the excitement and challenge that comes with being a CEO or entrepreneur.

Start Up Ven Diagram

Look in the middle – The opportunity and challenge of being a CEO.

Image | Posted on by | Leave a comment

Answer these Four Questions to Raise Angel Investment

The other week, I received an email from a fellow entrepreneur asking that if I had just one piece of advice to offer someone who was looking raise angel investment for their business, what it would be. Here’s my response, which I think is helpful for anyone looking to start a company and raise financing.

Landing angel investment can be tricky. All angels seem to have their own set of requirements ranging from investment dollar amount to the market segment you’re focusing on to something even as detailed as whether you have a technology team or engineer in house. They also tend to place a high degree of value on relationships and how well they connect with you personally.

That said, there are commonalities across most angel investors and if you’re looking to position yourself most effectively to land angel investment, you need to think carefully about the fundamentals of your business model. In particular, consider how it works, why it’s unique or needed, and how the capital you’re seeking scales your business and generates a return for an investor. Consider the following four questions:

1. What’s the essence of your business model?
A unique idea is one thing, but the business model underlying that idea is most critical. It’s that nugget that lies at the foundation of your business model and is the formula for how it generates income and solves a deep seeded problem. What pain point is it trying to solve? What’s the cost structure and possible profit margin? Can you generate recurring revenue or repeat business or are you reliant on one time contracts or sales?

2. Do you have proof of concept?
Proof of concept demonstrates the feasibility of your business model and shows an investor the degree to which you have proven that your business model really works and can generate income. It can be in the form of revenue, customers or product utilization. It doesn’t need to be a lot but enough to show an investor that your business can function and has some degree of traction.

3. How does your business model scale?
Once you have proof of concept, any investor is going to want to know how the business scales. Theoretically, you’re looking to raise money to improve a product, drive more sales or acquire customers. They’ll want to know how much investment you need and how that capital will directly impact revenue and grow the business. Be prepared to have a detailed equation. For instance, a specific dollar investment leads to X incremental new customers at Y cost per customer and Z net income or return.

4. What’s the exit and potential return for the investor?
Unless you’re really lucky to find an investor who is engaged with your mission and investing because they like your business and market, most investors are looking for a tangible return on their investment. That return could come in the form of debt or equity or a combination of both. If you’re selling equity in the business rather than taking on debt, I’ve generally found investors are looking for a minimum return of 3-4 times (if not 10 in many cases) on their investment over a 2 to 5 year period. Correspondingly, you’ll need to have a concrete exit strategy. This means understanding the landscape of potential acquirers or whether an IPO down the road is possible. Be prepared to lay out your personal plans and long term objectives for the business.

Accessing capital to scale a business or execute your business idea is one of the most crucial aspects of being an entrepreneur or even running an established company for that matter. I’ve found these four questions to be critical in effectively navigating the process. Being an entrepreneur is far from easy, but accessing the right sources of financial capital can smooth the path at each step of the way.

Posted in Entrepreneurship | Tagged , , | Leave a comment

Quote: Steve Jobs on Focus and Simplicity

“That’s been one of my mantras — focus and simplicity. Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.” – Steve Jobs (BusinessWeek)

I’m a proponent of the theory that a CEO or entrepreneur cannot just be able to think big picture, but can also zoom into the gnarly details of a problem, sort through the complexity and come up with a clean, simple solution. It’s not easy to be able to process information on two levels – zooming in and zooming out – but ultimately it’s about understanding the big picture well enough to be able focus on what really matters and then distill that into a simple solution or strategy. That’s a big part of what this blog is about.

Quote | Posted on by | Tagged , , , | Leave a comment

“Salesmanship starts when…

“Salesmanship starts when the customer says ‘no’.” – Mike Herning

Whether you are in sales yourself or managing a sales team, sometimes it’s easy to get frustrated when customers aren’t lining up at your door saying yes on every call. I use the following quote to remind myself that anyone can take orders but true sales is about overcoming objections and winning a reluctant prospect over.

Quote | Posted on by | Tagged , , | Leave a comment