January 22, 2010
The other day I was sharing with one of my portfolio CEOs some constructively critical feedback about one of his team members, prompting the CEO to ask me to share this directly with the individual himself. He added the very refreshing explanation: “We’ve gone to great lengths to develop a culture where people receive and are expected to improve based on critical feedback.” Many CEOs and VCs I know who are decades beyond this entrepreneur in age and experience still haven’t mastered this simple but really critical management principle.
If handled correctly, criticism and conflict can be not just constructive but very valuable.
In truth, this is something that has taken me a fair amount of time to get comfortable with myself and is something I still need more work on. For most of us, conflict and confrontation just isn’t fun.
Just over the past couple of weeks I had two situations that highlighted the value of constructive conflict.
In one instance, a portfolio CEO was sharing his key objectives for 2010 with the board, which were largely customer and revenue oriented. From my perspective, I thought it was more important for this company to establish key distribution partnerships than to hit short term revenue targets, and so I thought they were prioritizing the wrong objectives. We went back and forth a fair amount on this. I purposely forced the issue to push the CEO to really clarify whether he agreed or disagreed with my view that establishing our distribution model was the number one strategic priority. While it felt a little tense at the time, we both later concluded that it was a very constructive exchange which helped get both of us on the same page regarding the company’s priorities.
In another instance, I was having a 1:1 meeting with one of my portfolio entrepreneurs and shared my view of what I thought the two paths for the company were. To his credit, the entrepreneur told me quite directly that he disagreed and didn’t want to pursue either of these. While we still disagree, I think we both d0 agree that it is much healthier to have this disagreement out in the open rather than lurking unspoken under the surface. The result of having this fairly blunt disagreement was that we both were led to think more clearly about the specific assumptions that led us to our differing views. I don’t know for sure yet, but where I think this is leading is that we will have some really tangible things to watch over the next several months to inform our decision on the best path forward.
As a recent post by GigaOm states:
Cognitive, or good conflict, helps companies eliminate groupthink and open up strategic possibilities. That’s because cognitive conflict is characterized by healthy debates about “what” to do and “why” to do it; it thus generates multiple strategic choices and allows us to weigh options. It also helps us think more clearly and broadly about our competition. And from a biological standpoint, it stimulates the parasympathetic nervous system, creating a positive emotional state which in turn supercharges our brains. Indeed, cognitive conflict has been shown to increase firm performance and shareholder wealth.
So, next time someone accuses you of being harsh or confrontational, just tell ’em you are “stimulating their parasympathetic nervous system to supercharge their brain.”