Why do so many businesses fail? I believe one of the biggest contributors to business failure is the founder’s inability to get constructive criticism of their startup idea from people with very different viewpoints. Successful business leaders know that they need to go out of their way to seek unbiased feedback of their business idea from sources well beyond their support network, composed mainly of friends and family.
Growing up, I remember hearing the story of the Emperor’s New Clothes by Hans Christian Anderson. If you are not familiar with the story plot, it goes as follows. Two swindlers posing as weavers offer to make the emperor a set of new clothes. They add that the clothes will be invisible to the stupid or incompetent subjects in his kingdom. The emperor visits the weavers and sees that the looms are empty. Not wanting to be taken for a fool, he says nothing. Finally, the day arrives for the emperor to set off on a procession through the city in his new duds. The citizens not wanting to appear stupid go along with the pretense. Finally, a young boy not in the know blurts out that the emperor is not wearing anything at all.
For me, the story of the Emperor’s New Clothes described how some people recognize what might be obvious but fail to speak up because they may not want to appear stupid for not being in the know or to preserve a relationship. Therefore, I believe that many people prefer to avoid awkward situations and simply resort to telling people what they think they want to hear. Thus, business leaders receive filtered feedback that they believe to be accurate, and consequently, execute plans based on inaccurate feedback.
The problem of getting accurate feedback is two-fold. One is business leader based and the other is support network based.
Business leaders too often seek out a support network that thinks as they do. They tend to surround themselves with “yes” men who agree with every idea, regardless of its bearing or appropriateness. A support network of mostly “yes” men is not willing to provide any form of original ideas, opinions, or criticism, thus contributing to a disconnect between a business leader’s worldview and reality.
This concept is particularly visible when it comes to politics. Elected leaders appoint colleagues to important positions based on the fact they all share a set of common values and worldviews. From the perspective of the official’s support network, nobody is in a position to question the leader’s decisions, and instead, go with the flow in the same way as everyone, except the young boy, in the Emperor’s New Clothes parable.
Moreover, leaders have direct control of their appointees’ careers, and in some cases, their lives so there is an incentive to follow the leader even if some members of the leader’s support network disagree. This case is particularly visible in Russia and with Vladimir Putin.
Putin’s network of colleagues is forced to share his worldview. If anyone dares to raise a dissenting viewpoint, they tend to disappear. Therefore, everyone around Putin either has no opinion and is comfortable just following the leader or if they do disagree, prefer to keep their mouth shut to maintain their relationship with Putin and avoid being poisoned or sent to prison.
Founders often share their startup idea with their friends and family to get their feedback. By virtue of being friends and family, they share many experiences and have similar worldviews. Moreover, to preserve their relationship, the founder’s support network is very reluctant to share any negative feedback that could make the relationship awkward.
As a business mentor to small business founders, I have often been called a “dream crusher” or in one case “toxic” when I looked a business owner in the eye and told them they have an ugly baby. My honest critique of their startup idea is often the first time the founder has heard anything negative about their business idea. Moreover, as a mentor with no prior relationship with the client or any incentive to provide anything other than objective feedback, I’m free to share my best advice without any fear of blowback on the relationship. Having a diversely different viewpoint than the founder and no incentive to avoid an awkward situation is one of the best reasons why business leaders should always have a network of mentors. It is also why corporations have outside directors on their boards.
Too many business leaders live in a kind of echo chamber. They intentionally surround themselves with a support system of only “yes” men unwilling to provide constructive feedback or criticism.
Every week I have one or more clients that want to start a business because they are 100% convinced that they will be successful. That opinion is solely based on the fact that their support system, only made of friends and family, told them how great their startup idea was.
For clients who are sure they have a great business idea, I ask them to make a list of all the people they shared this business idea with and their relationship with them. I point out that friends and family are rarely a good place to get feedback, as they all have a dog in the hunt and are there mainly to support the person, no matter how crazy the idea or their ability to see it through. When it comes to friends and family, if there are any dissenting opinions voiced, it is rarely about the business idea itself but about trying to protect the person from taking any risk because they care about them.
As a business owner, you should have a formal or informal advisory board with very diverse viewpoints and experience that will give you honest and sincere feedback on all critical business decisions. Moreover, you need to get feedback on your ideas from potential prospects that have no prior relationship with you. Remember, even strangers will often avoid giving honest feedback on your business ideas to avoid an awkward situation. Therefore, business leaders need to make it abundantly clear that they want their advisory board to hold nothing back when it comes to delivering honest feedback.
As a business leader, you should endeavor not to surround yourself with “yes” men and assemble a team or support network of people from vastly diverse backgrounds and worldviews. Leaders need to create an environment in which it is safe to voice dissenting opinions and even be encouraged to poke holes in all of their business ideas.
How do you plan to get honest and unbiased feedback on your startup idea and make better decisions when you have a new business idea?
