Why You Should Ask For A Slap in the Face: The Trilemma of Truthful Feedback

How often did you hear these comments: You deserved it! Very, very well done! Awesome! Wonderful! They are part of our culture. You got to be nice with each other. But is it truthful? Does it help you? Do you believe it when said to you?

Here’s the problem: We’ve become so bloody careful about how to not trigger someone else’s feelings that truly truthful feedback has almost become a thing of impossibility or at least extremely hard to get.

Most likely you would agree with me here that sometimes a good slap in the face might be worth 10x all the bullshit people tell each other just for “staying nice”.

Truthful feedback is the breakfast of champions.

The truthful-feedback-trilemma consists of three points:

  1. Staying nice: Not hurting each other’s feelings
  2. Speaking the truth: Providing truthful feedback
  3. Collaborate, learn and level-up together successfully

Truth may hurt. But I believe in the long run knowing where you’re at is much better than receiving numerous pats on the back. However, in our society you got to ask for people to be truthful. Normal people usually shy away from potentially offending someone by speaking outright what they think.

On the other side receiving lame feedback, hearing lots of nice stuff and being applauded for average performance doesn’t help you to improve at all. It’s more like holding you back in your self-chosen comfort zone. What a lost opportunity. The most valuable feedback is truthful feedback!

When my first business partner and I ventured out to kick-off our start-up a few years back, the very first thing we clarified was that no matter what: We’ll always be providing each other truthful feedback. Even and especially if it’s hard. No matter the circumstances. It was paramount for success.

A good slap in the face sometimes helps saving time and money as well.

If you want to learn and grow, you must not hide in your comfort zone.

The first step to take is to let people around you know that you’re available to get slapped in your face every once in a while. If you follow the below guide it will not hurt you! I promise. The actual value of truthful feedback is heavily underestimated in our world.

Learn to say to your closest contacts: “I’d love a slap in the face!” – in the above context. I promise, It’ll work magic. If you could choose, you’d always choose to know the painful truth over beautiful lies. Also, an upfront slap in your face is nicer than ongoing backstabbing or talking behind people.

Feedback is education to excellence.

Seek it with sincerity and receive it with grace.

Agreed, delivering the truth still needs to happen in a civilized way. There are three parts that need to collaborate to make this work:

  1. The feedback giver
  2. The feedback receiver
  3. Create a safe environment

The Feedback Giver

A feedback giver has the power to provide a new perspective to someone who’s looking to improve. If you’re asked to provide feedback, you can help another person thrive if you can be real and provide constructive feedback.

The trouble with “real feedback” is, it’s been done poorly by most of us. That’s why a “feedback giver”, should spend some time considering a few points.

Feedback, when given well, should not alienate, but should motivate to perform better.

First and Foremost: Know Your “Why”!

Before you start sharing your opinions, think about what is “meaningful” feedback for the receiver and what “goal” could be achieved by providing it.

Whatever feedback you provide: Know your “why” – the purpose!

The key to giving effective feedback lies in your intentions. Not the methods.

Your intentions must be about helping others, not about yourself.

Second: Be Clear What Role You Take.

You can give feedback as a 1. coach, to 2. appreciate something or to 3. evaluate it.

Understand what the receiver expects of you. A restaurant critic that writes an entertaining article about how bad a restaurant is provides an evaluation. A loved one tells his family how much they mean to him as appreciator. And a leader coaches his subordinates to improve and get better.

Know your role!

Third: Know How to Deliver Your Feedback.

It matters whether you tell someone something in private, in front of a group, in writing, over the phone or by a simple text message. The various forms of communication allow for multiple mistakes to be made again. My rule here: Ask the feedback receiver directly how to feedback!

The more complex a topic, the closer you should be with someone and the better you ought to understand the actual purpose of the feedback. For more critical topics, privacy is better than sharing things publicly. A personal conversation can be accompanied with more emotions and mimic. A phone call may include emotions as well, but no face expressions can be captured. Written form is great for receivers that love to read and keep the content for later.

There’s nothing wrong with asking first!

Ask!

Some people need or even love the less direct way. For such receivers you can start your message with good things and appreciations, then “sandwich” the less positive part in the middle and end off by showing how to improve going forward.

I call this the “sugarcoat-sandwich”.

It works.

Others are turned-off by that very same way to communicate and prefer getting straight to the point though! Know your audience.

Once the above three points are settled, you as feedback giver simply have to focus on providing feedback that is clear, maybe includes some actionable steps for the receiver and know how to deliver the message.

The Feedback Receiver

If you’re the feedback receiver, you’re the one basically asking for a well served “slap in the face” – potentially. If that’s what you want, it’s very simple: Do let the feedback giver know you’re available for it. Make yourself available for truthful feedback. If you manage to unlock an unfiltered true feedback loop you will unlock new areas to grow.

We all need people who will give us feedback. That’s how we improve.

You can do certain things to increase your chances to make it happen.

First and foremost, you stand a better chance to get useful feedback from people whose mission is aligned with you. Your supervisor, some colleagues or your good clients might be very happy to let you know how and what to improve. Don’t shy back: Ask for it!

There’s two ways you can ask:

If you’re interested in other peoples’ opinions or thoughts: Ask for feedback. If asked for feedback, usual feedback givers take half a step away from you and try to think how they feel about what you do, say, write or sell. Asking for feedback will get you more diversity in new information.

If you’re interested in what you yourself can improve: Ask for advice instead. If asked for advice, usual feedback givers take half a step towards you and try to think about you and add more ideas towards what they think you could or should do differently or less/ more of. Asking for advice will get you more actionable information.

Learners need endless feedback more than they need endless teaching.

To receive useful high-quality feedback, it’s of utmost importance that you learn to become a good listener. Most people are natural “listeners to reply”. Learn how to listen someone out. Good listeners also beware of suppressing their initial natural reactions.

An expected slap in your face doesn’t hurt as much!

Control what you can control.

Keep your mask on.

They also refrain from explaining or even defending their own point of view or actions. Don’t do that. Let the feedback giver talk. The more they talk, the more information you can get. While listening, moderate your emotional spectrum and reactions. Listen to the end. Then reflect and think.

The world is giving you answers each day.

Learn to listen.

If you’re really up for “getting slapped” but you’re afraid nobody will give you the shit you’re asking for, it might be because you’re the boss yourself or your surrounding doesn’t appeal save for anyone to speak the truth.

In that case there’s a third part you got to facilitate.

Create a Safe Environment

The first two parts of the framework are key on a human to human level. They work well for 1-on-1 situations. However, if you’re in a corporate or more political situation, you’re basically asking a larger group to be upfront with you. In such environments the most essential thing to do is to create the culture and sufficiently safe environment for everyone to provide truthful feedback.

It’s scientifically proven that some companies have ended up very successful because addressing “painful truths” is encouraged – they equal better performance!

You can start this by not blaming anyone expressing out-of-the-box ideas or thoughts. In any group-session try to emphasize the value of remaining open minded and sharing true feelings and thoughts.

Second, don’t just talk about work alone. Make the members of your group get acquainted with each other. Building a team of people that understand and enjoy working with each other will unlock more potential.

Third, when talking about issues, products or processes, never frame it as “work”. Instead, talk about solving problems or learning and improving together. This will level-up engagement.

Fourth, as leader, acknowledge that you are not perfect yourself. Learn to show weakness. Showcase how you keep learning on a daily basis as well. This will create a safer, non-hostile environment where “try-and-fail” is accepted or even encouraged. If you play the strong tough guy on top, nobody will dare to tell you stuff the way it is.

Fifth, if you start to get more diverse feedbacks, you’ve reached your initial goal. Now, your challenge will be to “walk the talk”. You got to make people feel safe when they speak up and share their ideas. If at this point you blame or shame certain people or their ideas, all your previous efforts are lost.

Courage is what it takes to stand up and speak.

Courage is also what it takes to sit down and listen.

Sir Winston Churchill

Conclusion

Make understood that you won’t be offended by truthful feedback. On the contrary, ask especially for the “less positive things” people might have to say:

Ask for a slap in the face!

It may not be what you want to hear, but most likely it’s something you may need to hear. In the short term, hearing the “naked truth” may hurt, but in the long run it’s probably what will make you improve more, it’s what will differentiate you from others and these things are so much better than the occasional put on the shoulder and “well done” kind of comments people usually exchange.

Feedback is a gift. Ideas are the currency of our next success.

Let people see you value both feedback and ideas.

If you’d like to read more about this or similar topics, I can highly recommend you a quirky, fun, little book: Whatever you think, think the opposite.  It’s a great source for an occasional laugh and for situations where you need a clever quote. It also does give good advice.

Now imagine how refreshing and empowering applying this method can be: Go ask for YOUR slap in YOUR face!

Happy slapping!

Matt

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Fear And Greed

Are you frightened when markets go crazy once again? Afraid of not making the rationally and scientifically proven right choices about investments and life? Suffering from keeping-up with the Joneses and chronic herding-fatigue?

Then you are more than ready to dive deeper into this post where we take apart the two most powerful human emotions that make our world go round:

Fear and Greed.

These emotions have the strongest impact on human behavior individually as well as on a collective level.

They impact your life and [financial] markets in a powerful way.

Read on if you like to understand and manage fear and greed to build a better, happier, and wealthier life.

Step 1: Understand what drives behavior

All free markets are driven by supply and demand. Hence, all transactions need at least three things:

A buyer, a seller and last: The first two need to agree on a price!

Imagine an increasing number of people chasing the same limited assets or resources. The more people like to buy and the less want to sell – the higher the price will climb for supply and demand to meet.

Usually if prices do climb higher, it attracts “more eyeballs” in society and even more people join the party. That’s how greed works and this is what makes financial bubbles grow.

On the other side, think of fear as when suddenly nobody wants to buy anymore but an increasing amount of people is eager to sell.

The price will drop until someone is eager to buy again. Price level will be defined by where sellers and buyers agree to transact.

Markets reflect nothing else than the aggregated sum of individual behaviors.

And yes: It does get messy!

Step 2: Understand how markets work

In most fearful markets, people irrationally sell stock while in greedy markets people are looking to buy.

The wise ones may try to go against the heard and do the opposite, and as the saying goes, “buy low and sell high.” not otherwise.

My father has a great saying:

Some people are wise.

Some are… otherwise.

My dad

Before we draw to conclusions about how to make understanding fear and greed work for you, let’s go get a deeper understanding of them.

What is Fear

Fear is a deeply intriguing component of life.

In our culture, people believe failure is what to be most afraid about. Let me say, they got it all wrong. It’s the fear itself that is the most detrimental to success no matter what you’d like to achieve in your life.

Fear…

It helped us with surviving.

Protected us from sabre tooth tigers.

But it holds us back.

It creates comfort zones.

It keeps us from pushing onwards.

However, in our modern society, fear is mostly the source of all that is wrong in the world:

Fear of failure: “I’m not good enough!”

Fear of embarrassment: “No one will care!”

Fear of starting: “What if I fail?”

Any of these sounding familiar?

Fear is the most sinister made up thing of all time and the guaranteed fastest way to live below your meaning and potential.

Action is the savior of dreams.

When was the last time you did something about it?

Use fear as a tool for growth and challenge yourself.

Learning how to push through fearful moments is most beneficial and shaping your character.

Afraid to try or go “do”?

Face your fears!

Ask yourself: What’s the worst thing that could happen?

You either win or you learn!

Keep learning until you win.

Find a way to the other side of fear because that’s where dreams become reality.

The other side of fear is where your world starts to change, if you just allow it to.

Fear can be so valuable, but at the same time so debilitating. It’s up to you to decide whether to use fear as a tool for growth or as a reason to settle in life. Whether we bravely overcome obstacles or hide away scared is up to you!

Fear can be the biggest killer of dreams.

The sole difference is the decision of either overcoming fear and grow – or to allow fear to limit the life you dream of!

Instead of having fear killing your dreams, kill your fears!

Most of the good things in life are on the other side of fear indeed.

If you’re happy to sit at your desk and not take any risk, you’ll be sitting at your desk for the next 20 years.     

David Rubenstein

Step 3: Kill your fears!

No fear!

What is Greed

Greed is a mostly uncontrolled longing to increase the acquisition or use: of material gain (food, money, land, any possessions) or social value (status, or power). During human history, greed has been identified as “undesirable” because it creates behavioral conflicts between personal and social goals.

Greed is a powerful thing.

In my view, it comes right after fear.

In terms of motivational power, it captures the essence of the evolutionary spirit. Greed can show itself in different forms. It was and still is the driving force pushing mankind forwards and upwards – through history.

That’s why in the 1987 movie “Wall Street”, Michael Douglas as Gordon Gekko preached his words: “Greed, for lack of a better word, is good.”

The problem: Greed comes with downsides. Every once in a while, greed causes asset bubbles where greedy investors keep buying and ignore all the flashing blinking warning signs of impending potential for a collapse.

The 2008 crisis was mainly caused by “sophisticated derivatives” constructs where the end product got abstracted by two to three dimensions from the underlying business case and due to broad diversification and lower transparence everything was made to look just fine.

Don’t get me wrong, being ambitious is good. Wanting to get somewhere in life is great. Wanting to learn, achieve or grow is nothing but natural. As a trained economist myself I studied how a healthy form of greed is behind microeconomic decision finding.

If free market forces are left to themselves [meaning no government interference], the “good qualities of greed” appear. Goods and services will be exchanged at the most optimal allocation for all parties involved. The equilibrium point has its corresponding equilibrium quantity and an equilibrium price which leads to the most efficient allocation of scarce resources.

Would Wall Street, the economy or our capitalistic system function without greed? I don’t think so. Economic activity depend on the profit motive. Greed as such has never been left completely on its own on a macro level. Governments across the globe kept influencing markets. However, on a personal level we know what greed can do.

For a single human being the big problem is always the question: How much is enough?

Greed is a good motivator to chase ambitious goals, but the trap is often such that goals are getting adjusted higher and higher. Too much is never enough anymore. People tend to lose control over themselves. Greed often takes over when it comes to money and power.

Step 4: Learn to control your greed.

Overconfidence, lifestyle inflation, taking too many risks and trying to play bigger and bigger will often cost a lot. It can cost love, friendships, trust, or simply some money.

Beware: Greed is frequently used to sell stuff. If it’s not for fear, marketing often appeals directly to [your] greed. People will listen and buy.

How to conquer greed?

The Stoic mindset is the antidote.

Control your greed!

Know what you have.

Appreciate it.

Avoid lifestyle inflation, don’t let hunger for increased pointless over-consumption run your mind. Forget keeping up with the Joneses. Avoid herd mentality.

That’s where it gets problematic.

Lead your life and remember: True leaders remain committed to what really matters!

You are the leader of your life.

You run your mind.

Shitting Your Pants in Real Time

In this third part of this post, we will combine the concepts of fear and greed.

The initial motivation for (or purpose of) fear and greed and actions associated with it are  the promotion of personal or family survival and safeguarding future opportunities. In our modern world, controlling fear and greed are still important as ever:

The hardest thing an investor ever must learn is to manage his emotions.

Fear, greed, overconfidence, impatience, desperation, panic… I’m certain if you read financial news every once in a while, you may have come across these concepts.

The key here is to avoid the mistake of letting fear OR greed paralyze and impact your investment decisions.

Watching CNBC on a perpetual loop will not make you a better investor. Following such news will simply give you either mental breakdowns or orgasms – depending on the “mood of the day”. Like a drug addict you’ll constantly be like “pheeewwww”, “oh gosh”, “aaah”, “yesss” or “noooo” and keep watching the garbage broadcast: Triggering you to take action when everyone else does!

You’d be shitting your pants in real time or suffer from orgasm exhaustion sooner or later.

You’d be riding the waves of fear and greed.

The wrong way.

Without control.

Yes, if you invest in stocks you will be exposed to volatility. Sometimes this volatility can become nerve wrecking. Once markets go deeply into the red, you will face the situation where you’d love to throw the towel and sell everything. On the other side when certain stocks grow through the roof up into the sky your greed will trigger the so called “fear of missing out” and you’ll join the ride at a rather stupid moment.

“Be fearful when others are greedy and greedy when others are fearful.”

Warren Buffett

Now you’ll say: Okay, I get it Matt. Don’t do what the others are doing. But hey, how would you suggest dealing with stock market fluctuation then?

First, understand that volatility is part of the game. You and me, we can’t control it. Stocks will fluctuate today, tomorrow, next week. It doesn’t matter if you look – or not. Neither does it matter if you like it or not.

Sometimes people claim they prefer real-estate investing over stocks because of lower volatility. I’m also a great fan of real-estate investing by the way. But now, imagine you’d have a crazy neighbor. Imagine this neighbor would scream the actual real-time price of your home over the fence. Every. Fucking. Minute.

How would you feel about that?

I’d say you’ll probably get yourself earplugs.

You don’t check the real time value of your home.

So why would you do it with stocks then?

Ignore the Noise, off the media.

No worries, with time you will grow into this!

Step 5: If you can’t control it. Learn not to let it control you!

The stock market is a device to transfer money from the impatient to the patient.”

Warren Buffett

If you’re a well-diversified long-term investor, the only media I’d allow you to watch on a “red day” on Wall Street is this one here:

A Guided Meditation for When the Stock Market Is Dropping

By JL Collins

The Fear and Greed Index

In the last part of this post, we learn how understanding fear and greed can be useful whilst navigating the seven capitalistic seas.

Many traders use technical, fundamental, or other quantitative analysis. However, market swings are largely driven by human emotions. Hence, the sentimental one analysis is often overlooked.

The “Fear and Greed Index” can help you read the market sentiment. Please beware, you can never base your trading decisions just on this indicator alone. It should be used as a supplement to complement your initial strategy.

Understanding this indicator is relatively simple:

  • extreme fear indicates possible buying opportunities
  • extreme greed indicates a market correction could be expected

The key to making money in stocks is not to get scared out of them.

Peter Lynch

One simple way to apply this would be to rebalance your asset allocation based on certain readings of the index. If the index shows fear, you could reduce your bond or precious metal allocation and increase equity allocation. Or vice versa if the index shows greed.

This is the simple and easier way to make use of it.

Disclaimer: Beware – this is not direct investment advice but rather an introduction of concepts to help you expand your financial literacy. Execute and trade at own risk.

Having been a Wealth Manager and helping sophisticated investors with their money for most of my professional life, let me introduce to some more options here.

Greed Stage:

If markets are high and the Fear & Greed index is above 80 points, a correction of roughly 8% can be expected (data since 2011 till 2020). A high index reading usually also indicates low volatility and a good chance to reduce holdings.

Actions to consider:

  1. Sell covered call options on your holdings/ the index
  2. Use proceeds of 1. to buy put options on the same holdings to install a hedge

In short: Reduce exposure and hedge potential downsides.

Fear Stage:

If markets are fearful, volatility is generally high, and stocks are relatively cheaper. One thing is rather for sure, markets will not remain in fearful territory for very extended periods of time.

Actions to consider:

  1. Buy an inverse VIX ETN such as the SVXY – let go again once situation normalized
  2. If you plan to increase your equity allocation: Sell puts on your desired additions at desired strike price levels, collect premium and wait.

In short: Sell fear, sell volatility, potentially increase exposure.

If you’re as passionate about investing like me, learn to listen to the heartbeat of the market. Add the VIX and Fear and Greed index to your watch-list!

Step 6: Learn to listen to the heartbeat of the market.

Beware, the Fear & Greed Index is not an official index or tool, it’s a construct by CNN. Understand how it’s calculated and take note that CNN may change the way it’s calculated going forward without notification.

The wealthy know the short-term stock market is driven by emotions such as fear and greed.

The average think it’s solely driven by logic and strategy.

They fear when they should be buying.

… hope when they should be cautious

… get greedy when they should be selling

The wealthy have a powerful advantage over the average though:

They have maneuvered themselves in a position where they can allow themselves to take risks.

If your capability to take risks is not there yet, work on it!

Taking calculated risks and expanding your capacity to take on more risks, to build your assets and cash-flows is one of the best kept “millionaire’s secrets” there is!

Step 7: Put yourself in a position where you can allow yourself take risks.

Financial independence allows people to take more small, calculated risks – over and over again.

But remember: Pigs get slaughtered.

“Bulls make money, bears make money, pigs get slaughtered”

old Wall Street saying that warns investors against excessive greed

The more risks you can take, the less you will shit your pants the going gets tough and the more exposed to the upside you will be when the tide will turn once again!

Happy conquering your fears!

Matt

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