To appreciate the recent rise of 360-degree feedback in today’s workplaces, we must first understand the factors that led to the decline in its reputation. With roots in the industrial era and often referred to as a multi-rater assessment, 360-degree feedback rose in popularity and became mainstream. It became so mainstream that organizations slowly lost sight of its purpose. Frequently used to evaluate an individual’s professional performance, organizations often missed developmental opportunities for business growth. They also missed an alignment of key leadership behaviors that cultivate a strong organizational culture.

Several factors contribute to the decline in the perceived value of 360-degree feedback, including the impression that the 360s are:

• Focused on individual performance evaluations rather than ongoing development. Mixing individual performance management with development in a single 360 assessment created distrust and undermined employees’ willingness to respond truthfully.
• A one-off measurement tool with no monitoring of the development of progress over time
• A complex and time-consuming process that made data collection and analysis harder to complete promptly
• Inconsistent and riddled with subjective bias as poorly written questions, lack of benchmarking, and some skewed data undermine efforts to reach objective results
• “Read-only” – A lack of action in response to data resulted in employee frustration since the process didn’t yield tangible effects beyond a performance evaluation.

Consequently, traditional 360 assessments often suffered reputational damage from misapplication and participant frustration. However, when used correctly, a well-calibrated 360-degree feedback measurement provides a high-definition feedback mirror. Also, it provides an opportunity for continual learning and development. The key is leveraging a well-validated measure of leadership success that predicts real behavior change. And it needs to be supported by a holistic development plan for achieving meaningful insights on individual strengths, overall business performance, and career growth.

Skill Gaps and the Art of Upskilling

In collaboration with the Boston Consulting Group, The World Economic Forum (WEF) highlights that technological changes affect almost all jobs. This makes digital literacy and human-centric skills indispensable. There is a need for company-wide investments in employee upskilling, engagement, and retention to overcome technological disruption. The McKinsey Global Survey on the future of workforce needs shows that 87 percent of executives and managers believe their organizations already face skill gaps. Or that they expect such gaps to develop by 2025. Also, less than 50 percent of these leaders know how to address the problem and build their future leadership pipeline.

The sense of urgency to strengthen leadership pipelines across the world is supported by Gallup’s research findings. They conclude that managers account for 70 percent of the variance in their team’s employee engagement. This makes them the linchpin for team effectiveness and retention. Moreover, Gallup found that when managers can drive high employee engagement during times of economic disruption, their teams respond with resilience. Business performance is also strengthened and outpaces their competition.

Despite today’s uncertain business climate, leaders have taken steps to identify vulnerable areas and offer their staff stability and direction to move forward. Thus, developing leaders who are trained to navigate change, difficult circumstances, and continuously build stronger teams is imperative for cultivating future-ready leadership.

The Business Case for Alignment Between Manager and Employees

Leadership development is never easy and never a destination. Recognizing your strengths and opportunities for improvement is a difficult task for individuals. Most of us have heavily biased opinions of ourselves, making it difficult to constructively self-reflect and receive feedback. We struggle to cut through all the “noise” around us that provides clues to our performance and potential.

Proven 360 feedback tools are powerful means for helping leaders reflect on their behavioral tendencies. They also provide insight into leaders’ performance from the lens of their colleagues. The very best feedback tools don’t simply provide insights into leadership behaviors. They also help leaders explore how to use their unique talents and strengths to act on feedback.

A global meta-analysis of 49,495 business units and teams, 1.2 million employees, and 45 countries empirically demonstrates that a strengths-based approach to development leads to substantially better performance and business outcomes, including:

• 10 to 19 percent greater sales
• 14 to 29 percent higher profitability
• 9 to 15 percent higher employee engagement
• 26 to 72 percent lower turnover in high turnover teams

Simply put, a strengths-based approach to 360-degree feedback is an accelerator for development. It helps participants take an individualized approach to how they can achieve their desired outcomes. In addition, it helps them embrace and maximize their natural talents and apply them to tackle new goals.

This approach is very different from a traditional 360 assessment, designed solely to evaluate employee scores, usually with spectacularly little detail and advice on how to improve. With over 50 years of research, Locke and Latham conclude that significant performance progress is much more likely to transpire when goals and feedback are specific, appropriately challenging, and routinely discussed.

A note on the authors:

This piece was co-written by Ben Wigert, Director of Research and Strategy, Workplace Management at Gallup, and Jennifer Balcom, Director of Consulting at Explorance.