May 26, 2022
We estimate that of the organizations using 360-degree feedback, 95% of them use it solely for individual development. We submit that they are not gaining the full value that a 360-degree assessment could provide. Indeed, they limit its contribution to roughly one-half of its potential. From the organization and individual perspectives, the future could be much better. This article envisions a dramatically improved future for all leadership development and specifically for how we might use 360-degree feedback data.
A few organizations, such as PepsiCo, have pioneered its use to include what we will label talent management. This includes decisions about retention, promotion, selection for specific assignments, or a company-directed development process. A thoughtfully controlled, orchestrated development initiative at the corporate level contrasts the more common individually and personally managed development approach.
Other organizations, such as General Mills and Celgene (now part of Bristol Myers Squibb), made limited data available to the participant’s immediate manager. To involve the managers more, one of these organizations conveyed the participant’s three highest and lowest competencies to the immediate manager but provided no statistical data. Nor did they pass on the written comments. The troubling fact is that the people in the organization who could benefit the most by having better data are upper management and the HR function. Yet, they are the ones kept in the dark. After all, the peers and direct reports of the participants are generally aware of their leader’s strengths and shortcomings. It is upper management and HR who would most benefit from the data.
We have research to suggest that 360-degree feedback data collected with a psychometrically valid and well-constructed assessment is predictive of who will ultimately be the most effective leaders. It is more powerful than any psychometric self-assessment or traditional interviewing process. The organization has gone to the expense, trouble, and time to collect valuable data but gained only part of its potential value.
We have published data showing that those selected for company high-potential programs are occasionally in the lowest quartile of all leaders in terms of their 360-degree feedback scores and frequently in the bottom half of those assessed. That is obviously in sharp contrast to the assumption that the organization identifies the top 5%.
Why does that happen? A senior manager recommends so-called “hi-pos,” but that leader doesn’t have the benefit of any objective multi-rater or 360-degree feedback data. Further, we have research data confirming that when an organization provides even partial feedback to managers, the frequency of misassignment to the hi-po program plunges dramatically.
One of the reasons there is a lack of dramatic improvement from leadership development investments is this data is not more accessible to others. Many have lamented that the gains from leadership development initiatives, while generally positive, are modest compared to what they could and should be. But the truth is, there are seldom any “teeth” in the process. Now, only individual participants have any real visibility into their development. There are no specific monitoring mechanisms. As a result, the data is swept under the rug, lest anyone is held accountable to make the obvious changes it calls for. This can and must change.
Concerns have been expressed about the expanded use of 360-degree data. These arguments have been persuasive.
Roughly 80 years ago, when 360-degree feedback was first introduced, this limited sharing of data was extremely helpful in gaining acceptance for the basic idea. But the world is moving on. Are those reasons still valid? We think not.
Three significant concerns about expanding the visibility of 360-degree feedback and how it is used have been:
There are several steps needed for organizations to take this upward path.
We propose one such policy would be to share 360-degree feedback data in both directions in the organization. As a condition for the manager to receive information about a direct report’s 360-degree feedback results, they must share their own 360-degree feedback results with their direct reports. This creates more democratic transparency. It would encourage behavior change at all levels in the organization and do away with the traditional practice of treating people at higher levels differently.
We have, on several occasions, seen senior executives toss their 360-feedback report on top of a table and openly discuss what they had learned. There is an amazing impact on a team when the senior person shares their data with direct reports. We have seen no downsides.
We foresee that a great deal more behavior change would follow such transparency. That is part of the future for 360-degree feedback.
We currently recommend that participants include all of their direct reports. The manager of the participant is nearly always a given. The place where there might be some concern is the selection of peers. Our experience is that most participants will have, on average, 14 raters. Participants could be reminded that the value of the feedback they will receive will be greatly enhanced by observations coming from raving fans and those who might have constructive suggestions. We doubt that overall results will be seriously altered.
Leadership development today is not as effective as it could be. We envision a dramatically different future. Organizations will be gaining much more from their investment in leadership development. Individuals will make consistent, surefooted progress in developing their leadership skills, and they will have useful metrics to measure it.
Yet, we are realists. What we have described will not be ideal for every organization. It is not for those wishing to hold onto the past. It requires a sophisticated HR organization prepared to deal with some added complexity. PepsiCo describes several major evolutions in past decades as they implemented this more expansive use of 360-degree feedback for their organization.
Like any dramatic change from the past, it will also take time for an organization to adjust. These are all decisions that need to be weighed. For many organizations, however, this is a practical aspiration. We hope many will join us on that journey.
-Jack Zenger & Joe Folkman
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