Sunday, July 5, 2009

Seek Honest Feedback

Most of us intellectually grasp the importance for success in business of giving and receiving honest feedback. Why do so few of us do it well? Because it is difficult.

Many of us are averse to hurting someone's feelings and so are reluctant to deliver the full truth as we see it. We are also generally loath to receive feedback ourselves. It can be embarrassing and unpleasant. How many people (both supervisors and employees) actually enjoy the annual review process, which is all about feedback? Not many that I have met.

With all that said, I am still struck at how often in my ten-year career in human resources I came across even very senior leaders who would not give straightforward feedback when they should have, nor were they at all interested in what anyone had to say about them either. This fundamental unwillingness to tell and/or hear the truth costs organizations dearly over time.

Meg Whitman, during her decade-long run as CEO of online trading behemoth eBay, provided a dramatic example of a leader who not only sought honest feedback, but could not function without it. She listened carefully, mostly to her customers but also to anyone else who offered a useful point of view, and used what she learned to create a unique and powerful success story.

Whitman came aboard as CEO in March of 1998. Any number of skeptics felt that she was not qualified to run eBay for lack of technical expertise. She quickly demonstrated her willingness to roll up her sleeves and learn. In mid-1999, the eBay site crashed for 22 hours, and weeks of uncertainty and instability followed. Whitman sat through endless technical discussions to get at root causes, pulled all-nighters with the team and, when she did sleep, did so on a cot in the office. The problems were fixed and Meg Whitman impressed everyone, including her detractors, by acknowledging what she did not know and working to educate herself.

Whitman was also quick to credit eBay's success to its enormous community of buyers and sellers, who in essence run the business by determining which transactions will take place, and by managing inventory and shipping. The power of the business model, said Whitman, "is in the community of users who have built eBay."

Whitman spent considerable time monitoring feedback from buyers and sellers by perusing discussion boards. She said, "The great thing about running this company is that you know immediately what your customers think." She organized annual member conferences that brought thousands of eBay customers together to swap ideas and learn how to more effectively use the site. She spent time during these events on the floor interacting with as many customers as possible.

Numerous sellers have been able to make a handsome living trading on eBay full-time, and Whitman enjoyed interacting with them. Whitman declared, "Actually, most of these sellers know more about eBay than [eBay] employees. They use it every single day. They're the experts... The businesses that have been built on this platform are remarkable."

Whitman oversaw explosive expansion at eBay. In 2002, for example, revenues rose 62% to $1.1 billion, with an earnings jump of 172% to $249 million. By the time Whitman resigned her position in 2008, eBay had 15,000 employees, just under $8 billion in revenue, and 300 million registered users.

Meg Whitman was honored as Fortune magazine's most powerful woman in business in both 2004 and 2005. Much of what she accomplished can be attributed to her desire to hear what people were telling her, learn from it, and take appropriate action based on that new knowledge.

As a leader, if you arrive at a point where you lose interest in receiving feedback- assuming you had interest in the first place- or you say you want feedback but create an environment that is clearly not safe for providing it, you cannot succeed over the long haul.

Good leaders foster a culture in which it is okay to speak up, even if the message might be painful. The very best leaders not only accept feedback but actively, even manically, seek it out. They could not function without the information they receive, virtually always from multiple sources. It is like the air they breathe. They use that data to drive change in themselves and their organizations.

Meg Whitman is a shining example of just such a leader. She constantly sifted through countless bits of information, especially from her customers, the buyers and sellers who were foundational to eBay's success. She used what she learned to create one of corporate America's all-time growth stories.

Two final questions are critical: 1) Do you have someone in your professional life- at least one person- that pushes you and provides you with genuinely honest feedback? If yes, good for you; 2) If the answer is no, why not and what will you do about it?

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