1. What benefits do executive 360° reviews provide?
The biggest benefit to the CEO is more productive executives who work more collaboratively. When an executive exhibits difficult behavior, that behavior is often unknown to him or her because it is a problem in self-awareness. The main point of a 360° is to increase self-awareness.
Beyond that, creation and initiation of ongoing executive performance review is shown to have the most marked effect on company morale and productivity. It outranks any other kind of leadership or organizational development as it shows an atmosphere of employee accountability at the highest level and targets the leadership areas which most need improvement in the executives.
In the book Talent Masters: Why Smart Leaders Put People Before Numbers by Bill Conaty and Ram Charan, a study of executives showed that those who created an atmosphere of accountability with regular performance review and leadership development programs were found to be more successful than their colleagues who sought business results to the exclusion of development. Conaty and Charan reason that these executives found it easier to attract and retain the most talented people by giving them opportunities to grow rather than just to work toward a number. Talented executives want to be challenged and stretched while they deliver excellent business results.
In fact, in a recent study performed by Korn Ferry International, it was discovered that an amazing 94% of executives want more feedback than they currently receive. Combine this with the Lominger study which proves that leaders who have low self-awareness are most likely to be fired, and you can see why executive 360s are now considered a large part of total benefits packages at some of the most cutting edge companies in the world, such as Cisco, Zappos and NetApp. These companies routinely top the Fortune 100 Best Companies to Work For, in part due to their commitment to leadership development through executive review. The vast majority of executives want continuous learning opportunities that many companies simply do not provide. Without these learning opportunities, their careers can grow stagnant and they look elsewhere. Given the high cost of executive recruitment and retention, this is not a mistake businesses today can afford to make.
2. How does the 360° feedback process work?
When we perform your 360° reviews, the time expenditure for you is quite minimal. Our job is to make the process easy on you so you can continue to produce amazing business results while we develop the reports.
The following steps are the usual process:
a. Question development: First, we do a short research program to determine the correct competencies to address for each executive. We have an enormous database of information on roles, responsibilities, job descriptions and competencies for each unique role. We customize this to your culture and finalize the list of questions to be asked with the CEO and the HR executive.
b. Interviews: When we have your list of 360° contributors, we interview each person individually, including the executive himself, to obtain the most detailed and rich content on the competency, examples for each competency and suggestions for change, if applicable. We ensure confidentiality by cleaning each comment thoroughly for identifiable remarks. In the interviews we are looking for areas of strength as well as areas of development.
c. Customized reports: We then create a customized report for each executive. This report can be up to 40 pages long depending on the number of contributors. An average length is 15-20 pages. The report contains five major parts—the standard assessment results (if applicable), the summary, the graph, the verbatim comments and development materials. Samples of the summary, the graph and the verbatim comments are attached to this document. The executive receives the report in a three- or four-hour session where each part of the report is discussed thoroughly with the coach.
d. Development plans and coaching: After the report delivery phase, we immediately craft a development and coaching plan. If the executive is receiving coaching with the 360° review, we create a coaching plan with deliverables and timelines that match the development plan. At times, it is appropriate for the HR executive to take over the development plan at this point. This is customized for each person.
e. Ongoing review: The first 360° review is intended to be a baseline for the executive and should be updated every 12 to 18 months with a new 360° review.
3. Can our Human Resources department perform the reviews?
As the executives set the tone for the entire company, developing a continuous learning and feedback environment at the leadership team level is of the utmost importance. Having an external company perform this work gives an objective view of performance and allows for a larger measure of confidentiality for those contributing information via interview. It also allows for an unbiased review of the human resources executives in the same process as the rest of the team. Another benefit is that when tempers flare or emotions run high, as they inevitably do with reviews, the internal Human Resources function is shielded from these difficulties which are handled by our team. Our team is intimately familiar with executive problems and challenges and we easily and smoothly handle these issues for you.
Executive performance review must be distinct from other performance reviews in the company. Executive level expectations are higher and contain a long list of competencies, as many as 114 separate competencies. Executive responsibility is extremely high and must be treated as such. It is quite difficult for an HR professional who sits as a peer to another executive to deliver these types of performance reviews.
4. What do 360° reviews cost?
The cost for 360°reviews varies widely but the normal range is from $7,000 to $15,000 per executive. Most companies currently pay approximately $10,000 per executive, however, top executives like Bill Gates and Michael Dell pay upwards of $100,000 per report for their reviews which can run as long as 100 or more pages. Costs are determined by the size of the executive team, the list of competencies and numbers of reviewers. Coaching packages are an additional cost which can be cut down substantially by the quality of the 360° review itself. As an example, one CMO who recently received a review from our company was able to make the necessary changes within two months rather than the original six-month estimate on his development plan. He credited this to the ability to pin-point the correct issues. Our reports focus with laser-like precision on development areas and this precision can often make development steps obvious and rapid, saving the company money in coaching and education costs. A benefit of using our company is that we are so experienced with 360° reviews that we can save you time on the development plan as well as on the process itself.
5. Do executives enjoy receiving the reviews?
The overwhelming majority of participants enjoy receiving reviews. 94% of our clients have found the process challenging and intellectually stimulating. Less than 3% found it unsatisfying or too difficult. The level of satisfaction with the process correlates with the positivity of the report, however, we have universally discovered that executives do indeed desire more feedback. As mentioned above, 94% of executives want more feedback.
6. What do executives say about receiving the 360s and coaching?
Below are a few excerpts from the success stories of executives who have received their reviews from us:
“I took my relationship with my CTO to an entirely new level in two weeks after my review. I literally would never have believed this could happen so quickly.”
“I was surprised how focused this review was. There was nothing in the report that was extraneous and we didn’t try to fix what wasn’t broken. That was a relief.”
“I had a prior 360° with another company and I could not decipher the results. This 360° was easy to understand and made creating the development plan a breeze. My development plan was completed in three months and I was ready for a new set of challenges. Our business went up 18% during my development plan.”
“Applying the techniques I learned made me more organized and crisp. Most importantly, I learned how to quantify my unique value and stop making excuses. During the coaching, I was able to drive bottom-line results in less than 60 days.”
7. What do 360° reports look like?
Below are sample excerpts of the 360° documents to show how the information is presented in the report.
a. The Executive Summary: The summary is intended to bring out the main strengths and development areas for the executive. The summary is also presented to the executive’s manager in a separate meeting and is used to create the slide show where the executive presents his 360° (if applicable). Below are partial sample excerpts. The summaries are usually one page for strengths and one for development areas.
b. The Chart:
The chart shows a visual summary of the verbatim feedback by color coding the comments into strengths and development areas. A person with very mixed review comments would have a chart similar to the one shown below. In the example below, the Openness to Learning and Technical Acumen categories are largely positive while the Managing Upward category is more negative.
c. The Verbatim Comments: This example shows a few comments from the Openness to Learning category. Each category contains a set of verbatim comments matching the chart and aligning with the summary.
8. Are there any best practices for 360° reviews?
Absolutely. The following are the summary guidelines for implementing a 360° review process.
a. Give 360° reviews to the whole team rather than a few team members. The process works best when the entire team gets used to giving and receiving feedback. This creates a cultural change which allows for more rapid adjustment of non-optimum performance and behavior. It also creates a sense of fairness and camaraderie on the team. If one executive is performing poorly, the other executives are usually contributing in some way to the behavior, even if only by tacit consent.
b. Respect the confidentiality of the process. The CEO and HR Executive should assist the team members to uphold the confidentiality of the reports. The CEO is a role model for receiving the report and summarizing the feedback to the group. Her attitude will be closely watched and imitated by other executives.
c. Grant the executives the importance of having separate and distinct reviews. Do not use the same type of feedback process at the executive level that is used at the lower levels of the organization. Executive responsibility and standards are much higher and should be treated as such. If you have a poor performer on the executive team, this situation must be remedied rapidly as the consequences hold much more importance to the company.
In short, the 360° process is a unique and time-tested approach for delivering a high quality learning and development experience for the executive team.
Years after receiving a review and three months of coaching, one executive left this message on our voice mail:
“ . . . I wanted to call and update you on my progress since our 360 process three years ago. I not only completely changed my approach to work, but I have been promoted twice and am now the Board’s choice for the new CEO of our company! I credit this entirely to the 360 process. I cannot thank you enough for the deep and lasting impact this process had on my career. I called my HR person to thank her as well for bringing this into the company. Of course, as the CEO, I will continue the process.”