One of the many great revelations in my career so far has been learning the difference between criticism of work and criticism of an individual. Many developers I've worked with assume that to receive criticism for a piece of work is a comment on their ability, which I can relate to, considering that we tend to take so much personal responsibility for our work.
When an individual understands that criticism (when delivered in a respectful way) is a tool for greater collaboration, clarity and creativity, a team is able to focus solely on producing better work.
In Creativity Inc, Ed Catmull discusses the use of the word 'candor': to be forthright or frank, instead of 'honesty', which carries moral connotations. The Braintrust, an elite group of Pixar's best writers and directors is built on this principle. As Catmull writes,
"...without the critical ingredient that is candor, there can be no trust. And without trust, creative collaboration is not possible."
He goes on to say:
"This principle eludes most people, but it is critical: You are not your idea, and if you identify too closely with your ideas, you will take offense when they are challenged. To set up a healthy feedback system, you must remove power dynamics from the equation - you must enable yourself, in other words, to focus on the problem, not the person."