But when entrepreneurs ask others where their business is weak, unfortunately, they often fall victim to employees and customers saying there's no problem. This becomes acuter as your business grows and you hire new employees, and it's further magnified when you add a layer of management. This three-part solution will ensure you know your thorniest problems.
1. Adopt principles that promote (and demand) candor.
Your employees are hounded by opposing views all day – it's you asking for honest feedback while others implore "don't tell the boss!" Your voice can get lost in that cacophony, but clearly stated principles will guide employees toward the behavior your business needs.
Include these five qualities among a list of character traits you share with every team member, and make it loud that you will use this list when determining pay raises and promotions. When an employee exudes these traits, praise them publicly. And when someone falls short, counsel them privately, so they are clear what behavior you expect next time.
Fortitude: Demonstrates moral courage. Does the hard thing. Encounters adversity or bears pain with a pleasant disposition.
Temperance: Exhibits self-discipline, emotional control, and thrift. Confronts personal failings; doesn't excuse them.
Honesty: Practices full disclosure, candor, and fidelity.
Humility: Is willing to admit personal faults, apologize, accept criticism, and give credit where credit is due.
2. Implement systems that result in employees talking with customers, employees talking with each other, and staff talking to their managers.
Annual surveys of customers and employees. This will help you uncover blind spots where your people and your customers are not being forthcoming with you. Conduct the surveys anonymously to ensure that respondents speak freely.
Individual employee meetings. Managers should conduct 60-90 minute, one-on-one meetings with their direct reports with the sole purpose of talking about the biggest issues in their world. For newer employees, this might mean weekly. For higher performing employees, this might mean monthly. But don't go more than 30-40 days without meeting to catch up and understand what's most important to them.
Annual reviews. Establish a system that asks specific, consistent questions to the employee and requests co-worker feedback on that employee. (Note: If you're receiving fluffy feedback instead of candid co-worker comments, sit down with those colleagues one-on-one and dig for the real story.) If you're running individual employee meetings correctly and candidly, the annual review should be a natural continuation of that process. Those individual meetings are also helpful for following up on initiatives discussed at the annual review.
Group meetings. If you are candid with your team about the company financials, goals, and strategies, and you host a regular meeting to openly discuss these issues (every 30, 60 or 90 days), frequently the team will follow your cue and be candid with you.
Meeting of the Minds. I recommend hosting this meeting every 18-24 months. Have an all-day, in-depth discussion about the company's biggest challenges and opportunities going forward. Solicit questions in advance from the entire team. If folks are not asking questions or providing feedback in advance, sit down with individuals just like the annual review process.
Quarterly Business Reviews. As you establish candor inside your organization, you should also conduct face-to-face QBRs with as many customers as appropriate to understand how you can serve them better. Without proactive, what-can-we-be-doing-better-for-you customer conversations, you'll only engage with clients when something goes sideways.
3. Produce reports that give you visibility into daily activities and prove your systems are alive.
Because every business is different and has varying back-office support systems, I would be out of my league to recommend specific reports by name. But if you have reports and schedule (and stick to!) a review of those reports with company leaders where you talk openly about what's going well and what needs to be improved, you are installing candor in your workplace.
You set goals, you measure the goals, you face the facts whether you hit the goals or not, and then you talk about what happened. Nothing fancy there … but it doesn't happen if you don't have the reports and the scheduled meeting. This helps you keep visibility of what's going on, even with an extra layer of management between you and your constituents.
If you as the business leader execute on these actions relentlessly – over and over and over without deviating from your schedule – in time the rest of your organization will start behaving in this manner, and your biggest problems will be in front of you, ready to be demolished.