Alex Kenjeev and Kevin O'Leary of O'Leary Ventures.
When people find out that I work for Kevin O'Leary – best known as the most brutally honest Dragon on Dragon's Den – their reactions are mixed.
Most people see it the way I do: I have the privilege of working with one of Canada's legendary entrepreneurs, a man who built a $4 billion company from scratch, and someone who has had runaway successes in a variety of industries including software, cold storage, and mutual funds.
A small percentage reacts in horror: They think it must be awful to risk receiving, and to be expected to give, blunt and unreserved criticism. (On one episode of Dragon's Den, a woman broke into tears after Mr. O'Leary's feedback. His reaction? "Your tears mean nothing.")
The concerns may be well-meaning, but they miss the point. Mr. O'Leary's success in business and his direct, uninhibited style are two sides of the same coin. The longer I work with him, the more I'm convinced of the value that persistent, unrelenting candour and transparency can bring to any business or organization.
Truth lets companies move faster
In an O'Leary culture, everyone helps kill bad ideas. No formal report. No all-hands meeting. You simply let the numbers tell their story, and move on to something that adds more value.
Brutal honesty is a lot more than good TV – it's a huge competitive asset. The faster you can say "Stop the madness!" (to use an O'Leary-ism) the sooner your company can give good ideas, and good people, the time and resources they deserve.
Compare this with what you've seen at companies that discourage criticism and stifle creative dissent. They are slow, bureaucratic and wasteful. Even worse, they are deeply vulnerable to competitors that are more nimble and more efficient.
Honesty improves teams
Candid feedback – with money and action to back it up – is part of Mr. O'Leary's formula for finding and retaining top people. It's very simple: reward your top performers, and let go of people the minute you know they aren't working out.
It sounds harsh, but it will boost your team's morale and productivity immediately. Your employees already know who adds value and who destroys it. Reward and fire accordingly, and they will know for sure that the best way to do well is to do good.
The truth hurts some, but white lies hurt everyone
If you think the truth hurts too much, consider the cost of the alternative.
Let's say you treat everyone equally, you avoid criticism, and you pay everyone the same amount. Your top people will eventually leave. Your middle people will stagnate because they won't see a link between making more money for you and taking home more for themselves. And your worst people will stay the same, dragging down company profits and infecting the culture by proving that everyone can get away with anything.
The truth might hurt your under-performers, especially in the short term. But white lies hurt everyone, and they inflict real damage on your bottom line.
In the long run, the truth can set you free
People often feel sorry for the entrepreneurs who get rejected, sometimes with very harsh feedback, on Dragon's Den and in our offices. This is a mistake.
It's hard to find out that you poured money, time and energy into a bad idea. And it's hard to be fired, demoted or shot down in your job. But it can also be a turning point, and an opportunity to set off on a different track – one that's a better fit for your strengths and weaknesses. Even in the cold, harsh world of business, the truth can set you free.
Special to The Globe and Mail
Alex Kenjeev is president of O'Leary Ventures, a private company owned by Kevin O'Leary.