Being vocally self-critical

Being vocally self-critical

I have the opportunity to participate in a few company boards and I clearly see a big difference on the ones (and on its business performance) that adopts a more self-critical posture. Not all boards are equal, but the best ones are those where the founder does not sweep the bad news under the carpet: it is true that we should celebrate the wins and go over the reasons behind the successes, but the best discussions (and the ability to provide help from board members) happens when one brings what is not working, the challenges, the potential options to address the problem and an openness to collect (and apply) feedback. Sometimes founders and their teams are not comfortable to fully open all the information to investors and bring up the bad news or hard choices, given the existing tensions in telling the true (e.g. like the risk of showing difficulties and potentially impact a new round with existing investors). But the ones that adopt this posture are usually the winners in their sectors!

Spending many years at Amazon thought me that being vocally self-critical had a direct correlation to customer obsession and innovation. You can only truly innovate on behalf of customers when you assume that you make (a lot of) mistakes. More important, you need to create a culture where mistakes do not negatively influence how you compensate or promote people (or maybe the more mistakes you/they do, the better you/they should be paid ;-).?I recall one interesting phrase from Jeff Bezos, Amazon founder: “If the size of your failures isn’t growing, you’re not going to be inventing at a size that can actually move the needle”. If Amazon was not able to foster a culture permissive to mistakes, we would not be able to see so many important innovations like Marketplace (3P), Fulfilled by Amazon logistics, Amazon Prime, Alexa, and many other interesting innovations. For each of these successes there were many failures that never became public and some that did (like the Fire Phone).

Building a culture that favors self-criticism is not easy; you might have to rethink your performance reviews process to accept failure, a compensation program that takes a long-term thinking (maybe you should kill or reduce the short-term incentives in favor of long-term compensation, based on company-wide results), you might want to work on social cohesion norms that allow team members to come in front of others and not feel threatened by admitting mistakes and lastly, you might want to implement mechanisms where mistakes can be documented and then a solution debated in a way that you can have a solid process to revisit and avoid repetition as you scale.

There are multiple approaches to make a company culture change towards a more embracing self-criticism mode, but it takes time. One simpler way to start this process is to test it at how you hire. Why not start asking candidates, during the selection process, the following questions: tell me a situation where you failed; what was the impact and what have you learned with it? How have you addressed this with your leadership and colleagues? Which data points have you used at that time? How have you taught others about the failure, what would you do differently with the data you collected after the fact, etc….

From my experience, we should always celebrate wins but make the celebration quick and spend the other 90% of our time looking for a continuous improvement process and focus on what might not be working. Also allow you and the team to keep testing new ideas even when you know that statistically, some will not be successful. Implement mechanisms that favor your teams to be vocally self critically. If you do this well, you will create a positive flywheel where the sum of the wins will be bigger than the sum of the failures.