How To Do Performance Reviews That Build Trust | Ep 300

Always reinforce what they do well. People grow fastest when they feel safe, they feel appreciated, and they feel like you also recognize what they're doing well. I have never, ever, ever, ever, ever, ever seen somebody that has worked for me or under me grow quickly when they were feeling like shit. I've seen them struggle, put pressure on themselves, work harder, but they didn't get better. And I think there's a big difference between working harder and getting better. What's up guys? So I just wrapped up another round of performance reviews with our team, and it got me thinking about some of the things I've learned over the years of doing this, and I've been doing it for a decade, and I haven't stopped doing them because I think that there's a lot of reasons to do them. There's a lot of reasons also not to do them, which I would say is like for anything in business, like if you're bad at something and you do it poorly, it's like you might as well not do it because it actually can be a detractor rather than add a tip to the team. But one thing that I was thinking about is just like I genuinely believe that the number one skill that you can acquire as a leader, as a founder, as a CEO is to give feedback in a way that makes people feel better, not worse. And if I had to sum up all of my learnings over the years, I think that is probably what I would say has been a superpower of mine, or at least I've made it into one because I tried so hard in the beginning of my career to make people feel good, but I wouldn't give them feedback. And then I tried to give people feedback, but then they wouldn't feel good. And so I just spent so much time, so much effort, and so many hours reading books, reading articles, reading podcasts, testing things, working with psychologists, like trying to experiment and understand how I was going to get the best out of people. And so I thought that I'd make this episode for any of you guys who are out there and you're trying to navigate like, how do I get people to improve without making them feel like shit? Because I think that there's a way to do reviews that drives performance and growth without crushing somebody. And oftentimes the reason that I'm actually against some companies doing these types of things is because the leaders of those companies aren't yet good enough to deliver feedback in a way that makes people feel better, not worse. And so what happens is that it becomes a very negative event rather than a positive one. So what I want to do is I want to share with you guys four lessons that I've learned over the years doing this for a decade that you can apply to your business to help you navigate not even just performance reviews, but giving feedback in general. Okay, so the first lesson is that nothing should ever be a surprise. Okay, so the first question that I started every performance review with this last round because I wanted to see because we hadn't done them in six months, I was like, I want to know where I see it. I said two questions for you to start. One, was any of this a surprise for you? Every single person said no. Two, was any of this unexpected for you to hear every single person said no? And they really thought about it too. And I asked every single person, I started every review with this question. And when they said no, it made me feel like, wow, I finally accomplished this because I remember a decade ago, right? When I first did this for the first time, getting on performance reviews, having feedback and conversations and people being like, I don't know where this is coming from. I don't understand. I thought I was crushing it in here and I was like, oh my god, and I was like losing my mind because I was like, fuck, like, I thought I gave this person feedback and I thought this and like, but they didn't hear me, right? And that was because I had a gap in my communication. So what I realized is like the number one thing that I did is that I didn't wait to give feedback until a performance review. Okay, like when you have a performance review with somebody, you should be reviewing their performance. It's not, make someone feel like shit review, it's not critical feedback review. It's performance review. Let's look at the good, the bad, the ugly, where we get improved, where we've done great. Like it's everything. It's holistic to use it as a time to give all the micro feedback and address all the situations that have occurred over the last six to 12 months is a terrible thing to do. It is, it's a substitute for people who just don't know how to address things in the moment and people who like to avoid confrontation. And so that's what you don't want to do. If somebody is surprised in a performance review, then you messed up as a leader. And so those two questions that I asked were because I wanted to know how I was doing. And honestly going into them, I felt really good because I was like, I don't think there's a single thing here that somebody would have heard. And if they didn't, it's because I haven't yet learned how to communicate with them in a way that they're going to hear me. And so why is this important, right? One, if you do performance reviews in a way that's negative and then if you just bombard people with all this critical feedback that you've been holding back almost like if you're in a relationship with somebody, it's like all of a sudden they've held in all this resentment and then they unleash it and you're like, where the fuck is this coming from? Like that happened two years ago, right? Well, one, it erodes trust because they're like, well, what the fuck else are you holding back? Like you haven't been telling you the truth about where I stand with you or my performance for how long now? Like how am I supposed to trust you as my leader to know that you're going to give me the right feedback in the moment, right? So think about that. If you're in a relationship with somebody and they never give you feedback until they finally explode one day, then you're always wondering like, do they like that I do this? Like where do I stand with this person? It just, it creates this unease and this egg shell walking because now you're not sure because you didn't get the feedback in real time. The second thing it does is it definitely makes people defensive. You know, a lot of the times when I hear that somebody gets defensive on a performance of you, I'm like, well, let me see how you presented things. And 99.9% of the time guys, it's not that the person's this ego-maniac defensive, you know, shithead. It's that the way they were giving feedback, it's like, oh, I only pointed out the five giant deficits they have that I've never told them about and pointed out all these scenarios that I never addressed with them over the quarter. It's like, well, no shit, okay, people defend because they're in shock and they don't want to cry, get angry, be disappointed, be depressed, and so they use anger. And so it's almost like a protection mechanism because they're just trying to process the fact that the reality that they thought existed is no longer. So that's how it feels. Now, what can you do instead? When I do not treat a performance review as an event, I treat it as a conversation. This is the thing is like the more that we over script these things, the more impersonal and the worse they become. You're just talking about them. And honestly, I think that's like the best take we could have is like, this is an hour dedicated towards you pouring into them, helping them, telling them what they can do to achieve their goals, explaining ways you can help them get there, putting together a plan. A lot of the time your day to day is just talking about the work, right? And so it's nice to kind of step back and say, all right, let's talk about you for a second. And people really like that. It feels like a great investment. It's like with your spouse, you're going to be married, go do your thing, but if you never talk about your marriage, it's like, okay, well, I just want to make sure we're still aligned, right? And so you want to treat it like a conversation, not an event, not this big formal, looming, thing over your head. And then the second thing you want to do instead is give feedback consistently. Okay, if you're the type of leader that you're listening to, like, fuck, like people do things in front of you, people say things to you, things happen, and you don't give feedback right then in the moment, that is a deficit as a leader because latency always beats intensity. People are more likely to change their behavior if you tell them sooner rather than if you tell them later in a more formal setting. It also saves you time because I was having this conversation with one of my executives. He got really good at giving people feedback in a formal structured way. I said, now the next step is, this is a huge time suck. Like having to prepare and having to put together all these scripts and really think through this feedback, like, the ideal is that you just tell them in the moment. And so we had a conversation about what that would look like and what you would have to do to up level his skills so that telling people in the moment felt like something he could do and he knew how to do. The goal is that by the time their views roll around, it's more like, hey, you know, we've already talked about X, Y, and Z over the past six months. Here's all that all ladders up and here's what I think you should focus on right now. It's really like repriot organization of their personal growth. Now the second lesson that I've learned is that if you anchor feedback to their goals, it almost never feels negative. Okay, so think about this, right? If you make feedback about the person, it often feels like criticism. It's like you're attacking them as a human. But if you anchor it to their goals that they have shared with you, it feels like help. Okay. So it's just a quick reframe. Like, think about this. Instead of saying you need to speak up more in meetings, say it like this. You know what? You told me that your goal is to become a VP one day. To get there, you're going to need to drive the room, the way that I drive the room in the meetings. Do you want to work on that together? How about the next one? You take a swing and I will give you feedback in the moment. Does that work for you? So notice there, it's like you're anchoring to a goal. Now why is this something that disarms people? Well one, because they want the thing, right? But two is, really think about this. They're like, wow, you remember I want the thing and you want the thing for me too. Now that creates a relationship of trust. And that's like, wow, you've got my back, not just the company, not just your own selfish desires. I'm not just here to be, you know, you're glorified assistant, like you actually want to help me achieve my goals, right? It also removes ego because it's now, it's not about flaws. Now it's not about what they're doing wrong. It's about how to do better to get what they want. It's very nuanced, but guys, this makes all the difference and it will make a huge difference to the people that you're leading. And it also creates buy-in because you're aligning with their goals and their ambitions that they have expressed to you. The moment that I started doing this, I started one growing people much faster. Two, never fearing feedback again. I do not get nervous anymore to give people feedback because I understand how to give it in a way that feels good, not bad, which means it's not that you're attacking somebody and their character. It's that you're collaborating with somebody on how to reach their goals. It's like a coach. And so if you think about yourself as more of a coach than a boss, I think this helps a lot. Now the third lesson is that when you're going through a performance review or even when you're just giving feedback, only focus on one thing at a time. Okay, I get what the trap is, which is you see everything. And if you're like me, you can probably immediately spot 10 ways that somebody could be better. But here's the thing, humans can't change 10 things at once. They can barely fucking change one. And think about yourself, you're probably trying to change multiple things. Maybe that's why you haven't gotten anywhere. Maybe if you just tried to change one, you would get much further. And what I've learned is that when I used to inundate people with like, here's your 16 step performance plan, it's like nothing happened. So instead, what I've learned is you have to prioritize, you have to pick the biggest lever for their role. And then you have to work on it until it's solid and not a constraint anymore and then move on to the next thing. At acquisition.com, we talk about the theory of constraints for businesses. I tell my team, you have a constraint as well. What's your constraint? Think about that for yourself personally. And then you work on it until you've got to move to the next thing. So for an example, right, maybe you have ahead of sales. And you know, the biggest thing is they need to be building a recruiting machine. And if they're not learning how to build a recruiting machine, then nothing else matters because you don't have enough sales refs to staff your company, right? Maybe with a new manager, it's learning to hold people accountable because you have all the systems, you have all the people, but they're just not enforcing. And so because they're not enforcing, you're not getting the output of the current team. So you're like, well, I'm not going to hire people because you're not holding people accountable. People are being effective. I'm also not going to hire people because you're the one who's messing up and not them. And so you don't want to dilute the real constraint by giving them this laundry list of issues. You have to ask yourself, what is the one thing that if this person changed would get them the best return on their effort? I ask myself the same questions, which is like, if I layla, as the CEO, invest in this one skill myself to get myself better, which one would take me the furthest would make the biggest difference, would make the biggest difference to my life, my company, my relationships, everything. And so don't dilute it. And oftentimes, well, how I kind of wrap a review or even a piece of feedback is I'll say, look, there's a lot that we can improve on. Shit, I have a lot I can improve on. But if we nailed this one thing, you will be fucking unstoppable. You will be a fucking weapon. You will be able to be the head of X. And that gives people one permission to only focus on one thing to focus to only focus on one thing and three relief. Because even though you say they only need to focus on one thing, they still feel they know all their deficits. They're aware and they feel self-conscious of the fact that they still exist. And so you giving them that permission to only focus on that one thing, it gives them so much focus and so much relief. Now, the fourth lesson is you want them to tell you how they will improve. Okay, this is probably the biggest unlock. And also it feels like cheating because it's less work for the leader. But I swear to you guys, like, I'm not afraid of the work. I'm guessing if you listen to my podcast, you're not afraid of the work either. But this is probably the biggest unlock. Most people think that your job as a leader is to say, Oh, okay, here's your problem. And here's exactly how you're going to fix it. And then all check it and make sure you're fixing it, right? But that makes them passive. It puts them in the passenger seat of their own growth and it also robs them of ownership of owning their own growth and problems. So instead, right, what I do is I share the observation or area to improve. And then I ask, what do you think you would need to do to master this? I want them to build the muscle of diagnosing and solving their own problems. Because one day, they'll be running a team or a department. And I will not be there to do that for them. And they will have to do it for others. Now, if their answer is off base, because I know what you think, you're like, Well, what if they're ins or shitty? Then I would die them. I don't say, Oh, that's bad. But I would say, Okay, that's great. Start. What else do you think you could do? What do you think it would look like if you worked on this every week? Okay, great. That's an awesome start. How would you measure progress for that? You don't develop people by telling them what to do. You develop people by asking them questions and getting them to fucking think, you cannot let them outsource their thinking, let them outsource their critical thinking, let them outsource all of their leadership to you and your brain. You have to force it back on them. And that is probably if you are a CEO or a founder, one of the hardest things that you have to learn to do. Because every time I'm in these conversations, like, Of course, I can do it for you. Of course, I can figure it out. It would probably take me literally a seventh of the time it's going to take you. But I don't learn anything from this because I already know how to do it. I've already mastered it. You learn. And if I do it for you, I rob you of those learnings. And that is why this is so critical. Because if you do it for the person, they never develop. Now, some other things that I wrote down that I picked up from doing performance reviews over the years that are just some rapid fire nuggets. I give you guys. Okay. One, always reinforce what they do well. People grow fastest when they feel safe. They feel appreciated and they feel like you also recognize what they're doing well. I have never, ever, ever, ever, ever, ever seen somebody that has worked for me or under me grow quickly when they were feeling like shit, when they felt like people hated them, when they felt like they were doing a good job. I have seen them struggle, put pressure on themselves, work harder, but they didn't get better. Reinforce their strengths, remind them of how amazing they are, give them the belief that they don't get having themselves. If you are so lucky to have people that work for you who fucking look up to you, then do not take advantage of it, use it to speak belief into them. It's like I have chills when I'm saying this, but it's like you're so much more powerful than you think. And even if you feel like they don't love you or respect you all the time, it doesn't matter where the compliments come from, it will mean something to the person. Now the second thing I would say is that don't rush. Performance reviews should just take the time they take. Now I allotted 45 minutes because I've got it down. I know a question is going to ask, I'm only going to focus on one thing. And I don't have this backlog of stuff to work through. There's also no trust issues with people in my team. Now for a lot of you, this is going to be 60 to 90 minutes. Because if you are like listening to this, you're like, I have not yet mastered this. It's like give yourself the time to navigate through and realize that it's not going to be perfect. So you need some buffer. And I would also suggest don't schedule these back to back. Like put them with three minutes in between so that you can refocus. You can re-center, you can review what you're going to go over with the next person and you don't feel rushed to get into the next one. I put a buffer in even though I know that I can end on time. And even though I know my refocus might only take five minutes. But it's like if you've got a P, if you're hungry, if you're tired, if you don't remember what you were going to address first, like you don't want any of those things to occur during these conversations. And then the last thing that I would give you a nugget of is end the conversation with optimism. Remind them of why you believe in them, remind them of why you hired them, remind them of all the good things that you see in them. And then follow that up with your own reflection, which is after every review cycle, I ask myself two questions. One, did I help this person become more valuable to the business? Great. Two, did I help this person become more valuable to themselves? If the answer is no, then I have worked you two. I need to go back to the drawing board because I have not done my job as a leader. That is it. Nothing should ever be a surprise. Anchor to goal, so feedback is always a helpful, not criticism, focus on one thing at a time, and then make them tell you how they're going to improve. Guys, I promise, if you do this consistently, you will not only build a stronger team, you will build people who feel proud of what they're becoming, and who they're becoming. And that is the most rewarding part of leadership. So if this helped you, do me a favor, go ahead, share it with another founder, a CEO, a leader, somebody who's running their own reviews, or maybe thinking about it now, and need some guidance. And I will catch you guys on the next one.