Constructive Criticism: The death of candor.

"When two men in business always agree, one of them is unnecessary." ~ William Wrigley, Jr.

"We would have had more time to discuss strategic objectives if Jeff dispensed of his comic routine." So went a piece of feedback I received from a participant in a strategic planning session that I was moderating. My internal reaction... argue back, defend my position, convince myself that the problem is with the person giving feedback.

But hold on, I tell myself. This is a valuable piece of information not designed to make me look foolish, but to make me a better consultant. I can learn more from a piece of constructive criticism than I can from self accolades or a feeling that all is well. Wouldn't I be better off to view this piece of constructive criticism as manna from heaven instead of an insult? In the heart of this piece of criticism is instruction on how to improve. I would be remiss to let it pass.

Dale Carnegie, in his 1944 book How to Stop Worrying and Start Living dedicates an entire section to how to keep from worrying about criticism. One technique he espouses is to constructively criticize yourself. It will help you become a better form of yourself, but also help you be more open and worry less about receiving constructive criticism from others.

I am a consultant. Community financial institutions ("FIs") pay my firm for helping them, primarily in an advisory capacity. I have found that those executives that are more open to constructive criticism tend to perform better. When performing a traditional SWOT analysis, I often quip that any bank that has significantly more strengths than weaknesses is a good sign to short the stock. High performing FIs tend to identify more weaknesses than strengths.

But today's business environment is difficult, and Community FIs' leaders are understandably more paranoid today than in the past. This elevates their defenses from accepting constructive criticism. This puts pressure on advisers to construct a message that all is well, or what is not well is somebody else's fault. But would I be doing my clients a service by telling them all is well when the facts are to the contrary? Why would an executive want to believe everything they are doing is the right thing up until the time they are shown the door?

Some resistance to criticism is healthy. In fact, I would put most criticism such as nagging, nit-picking, or the "see how I'm right and he/she is an idiot" in the unproductive category that should role off of one's shoulders like a droplet of rain. Not only is this type of criticism unhealthy in itself, but it closes us off to the constructive type.

I often write and speak about the pace of change in the banking industry. Strategic decisions made today will impact our institutions for years, and perhaps generations ahead. These decisions would be better if we had the ability to look back and evaluate our past, and openly debate the future. If we are closed to constructive criticism, our strategy will be inferior... period.

I have experienced many executives that are closed to criticism. Many are what may be termed, "message managers". They spend a lot of time managing what others say to them, their colleagues, and their Board of Directors. They set up meetings to filter and control the message. They hire advisers that tell them what they want to hear, and avoid ones they cannot control. This may appear to be a good short-term strategy, driving the institution forward without having to zig or zag. But an institution that can only be as good as one person is one that has a limited future.

Society is moving away from constructive criticism. Instead, we are gravitating to a non-constructive sound bite mentality. This makes for poor strategic decision making. As leaders, we must re-train ourselves how to give and receive constructive criticism. The future of our industry is dependent on the collective knowledge of all members of our team, be it colleagues or advisers. Let's get the conversation rolling!

Is your community FI open to candid, constructive dialog?

~ Jeff

Links to good articles on constructive criticism:

2001 Inc Magazine article:
http://www.inc.com/articles/2001/08/23257.html

Strategic Management Solutions (SMS) white paper:
http://www.sms-hr.com/articles/Criticism.PDF