How High Expectations Can Hurt Your Business


How High Expectations Can Hurt Your Business

April 29, 2014

by Dan Richards

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Canyon Capital Has Tapped Into The Pandemic Fallout: In-Depth Analysis [Q4 Letter]

CanyonCanyon Balanced Funds was up more than 41% net since the end of last year's first quarter. It took about 10 months for the fund to recover from the lows in that quarter, a few months longer than the 2009 rebound after the Global Financial Crisis. The fund has a little over $26 million in Read More

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It’s conventional wisdom that ambitious goals and high expectations go along with success. But a recent conversation with a top-performing advisor and some groundbreaking research show that having expectations that are too high will actually damage your business.

The key ratio that determines your relationships

That conversation was with a good friend – let’s call him John – who three years ago came to the stark realization that he was on a destructive path. In his 40s, John is a perfectionist by nature and a super-driven, type-A personality who does nothing by half measures.

John has built an exceptionally successful business through talent and hard work. Despite his success, though, John is a very demanding boss. His business’ main obstacle is retaining support staff, even though he pays well above market. John has also struggled with his relationships with his two teenagers, who see him as unyielding and authoritarian.

The moment of insight for John was after his daughter came home with good grades on a key exam. John asked how her friends had done on the exam, and his daughter left the dinner table in tears. Later that evening, his wife and he had a talk that changed how he interacts with his kids, his staff and his clients.

Here’s how John described what his wife told him: “I understand that you didn’t mean to put Lindsay down, but you’re such a perfectionist that you take the good things she does for granted and immediately focus on the things she needs to improve. It would have taken only five seconds to tell her that she’d done a fantastic job and that you’re proud of her – but instead you wrote off her results with a ‘good job’ and immediately began comparing her to her friends. Until you take the time to let our kids know that you really appreciate them and recognize their terrific qualities and accomplishments, your relationship with them is going to keep going downhill.”

This got John thinking. Later that week, John’s wife emailed him an article that highlighted research on the optimum level of unqualified positive comments to negative comments, even those phrased as constructive criticism. Researchers had studied 60 leadership teams at a large tech firm and divided them into high, medium and low performers. The single factor that divided the most from the least successful teams was the ratio of positive comments (“great idea” or “good suggestion”) to negative comments (“not sure that would work” or “think we can do better than that”).

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