st Century 360: Using Feedback Data to Unlock Your Team’s ... … · The lack of utilization of 360 feedback in health care as compared to high performers in other industries may

Talent Development

The 21st

Century 360: Using Feedback

Data to Unlock Your Team’s Talent

Executive Guide to Optimizing 360 Degree Feedback in Talent Development

Jasper Lin, M.H.A. Senior Analyst 202-568-7997 [email protected] Brendan McGinty, M.B.A. Practice Manager 202-266-5785 [email protected]

2445 M Street NW | Washington DC 20037 | P 202.266.5600 | F 202.266.5700 | advisory.com

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© 2012 THE ADVISORY BOARD COMPANY ADVISORY.COM

Table of Contents

The Imperative for Leadership in Health Care ........................................... 4

Multisource Feedback in Health Care Talent Development ...................... 5

360s and the Sad Reality of Limited Aspirations ...................................... 6

Best Practices in Multisource Assessments ............................................. 8

A Better Way to Support Individual Development .................................... 9

Development PLUS Leadership Deployment ......................................... 11

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43%

25%

35%

OperatingMargin

PatientSatisfaction

All Initiatives

The Imperative for Leadership in Health Care

It’s no secret: health care organizations face the intractable need to lower costs and improve the quality of care. It also comes as no surprise, then, that leadership determines whether a successful transformation takes place among health care institutions. Unfortunately, health care leaders have consistently struggled in improving their organizations. Research shows that only 35% of all improvement initiatives at hospitals meet their targets1; a subsequent survey conducted with 163 CEOs, senior strategic managers, and other professionals revealed that improvement initiatives fail due to factors attributed to poor leadership.2

Percentage of Initiatives Achieving Improvement & Root Causes for Failure

These studies capture health care organizations’ immediate imperative to prioritize and revamp leadership development. New challenges require new ways of doing business—equally the case for new approaches to leadership and talent development.

1 Advisory Board Research and Analysis

2 “The Powerful Convergence of Strategy, Leadership and Communications: Getting it Right,” Forbes Insights, accessed October 18, 2012,

http://www.forbes.com/forbesinsights/FDStrategy/index.html

100% Success

Leadership failures creating a massive performance gap

Poor Execution: 16%

Lack of Accountability: 13%

Wrong Strategy: 18%

Insufficient

Analysis: 21%

External Circumstances: 24%

Root Causes of Failed

Improvement Initiatives

Human capital holds back organizational

performance

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Multisource Feedback in Health Care Talent Development

As part of multiple efforts to strengthen leadership capacity, 360-degree feedback (also known as multisource feedback) has proliferated as a common tool for many corporations to measure and plan for the development of leadership competencies. In the past two decades, up to 25 percent of U.S. employers and a majority (approximately 90 percent) of Fortune 1000 companies have adopted a 360-degree tool.3 A recent survey conducted by the Institute for Corporate Productivity further supports the notion of 360s’ use, particularly compared to other tools, and particularly at high-performing companies.4

Cross-Industry Adoption Rate of Development Tools

360-Degree Assessment

Myers-Briggs Type Indicator

Measuring Effectiveness

Listen to Candidate Feedback

High Performers 50% 17% 23% 75%

Low Performers 28% 20% 19% 25%

The table above suggests a correlation between the performance of an organization and the utilization of 360 feedback with organizational support and follow-up, though causation and effect cannot be equally assumed.

Health care, however, lags behind other industries in the adoption of 360 degree surveys: a study in 2007 indicate that only a small proportion of health care leaders use 360 feedback a “great deal” of the time.5 The chart below illustrates this trend.

The lack of utilization of 360 feedback in health care as compared to high performers in other industries may point to unique adoption barriers among health care staff and the potential for increased improvement through health care’s use of the 360.

3 Anonini D, Park H. “The relationship between rater effect and three sources of 360-degree feedback ratings”. J. Manage. 2001:27:479-495.

4 “Leadership Assessment and Development Survey”, Institute for Corporate Productivity, 2001.

5 “National Healthcare Leadership Survey: Implementation of Leadership Development Best Practices”, National Center for Healthcare Leadership, accessed October 15

th, 2012,

http://nchl.org/Documents/Ctrl_Hyperlink/doccopy5321_uid7282011150092.pdf

18% 13%

6%

50%

0%

10%

20%

30%

40%

50%

60%

Health CareAdministrators

NursingLeaders

MedicalLeaders

HighPerformers (All

Industries)

Adoption of 360 Assessments in Health Care

High performers more likely to use

360 tools

Health care leaders less likely to benefit from

360 process

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360s and the Sad Reality of Limited Aspirations

Perhaps, the limited use of 360s in health care is wholly consistent with the limited value that many organizations derive from the tool. Health care leaders would be correct to question whether the prevalence of the 360 warrants its unfiltered use in leadership development, as research suggests modest effectiveness for the 360 in improving performance in many cases.

Moreover, another meta-analysis fully specific to 360s supported the fact that 360 feedback interventions in general had limited effect as “it is unrealistic for practitioners to expect large across-the-board performance improvement after people receive multi-source feedback.”6

Although these studies only suggest modest effectiveness of 360s, a more thorough review of the literature reveals untapped potential. Previous studies discounting the effectiveness of the 360 do not control for myriad factors that can contribute to such results. The design of individual 360s varies on a wide spectrum from vendor to vendor, and different organizations elect different approaches in supporting the feedback process. 360 design, use, and support all vary greatly across organizations.

These 360 variations reveal multiple pitfalls that may hinder their effectiveness. Together, these pitfalls undercut the ability of 360s to develop staff but instead render 360s as another administrative hassle that competes with valuable time and human resources. Three pitfalls contribute to the limited efficiencies of 360s:

Pitfall #1: Poor Accountability7

In many 360s designed for development tools, participants receive their feedback and ultimately lack a motivation for change. This undesired outcome often results from the following conditions:

Minimal Behavior Change - 360s rarely “hold ratees accountable for using the

feedback to change their behavior”8

Ambiguous Game Plan - 360s often lack concrete steps and timelines for further

practice following the 360 feedback

The lack of accountability in many 360s mutes their potential for change. Participants may recognize areas they need work on, but lack proper opportunities and reminders to act on their weaknesses.

6 Smither, J.W., M. London and R.R. Reilly. 2005. “Does Performance Improve following Multi-source Feedback? A Theoretical Model, Meta-Analysis and Review of Empirical Findings.”

Personnel Psychology 58:33-66. 7 Leanne E. Atwater, Joan F. Brett, and Atira Cherise Charles. “Multisource Feedback: Lessons Learned And Implications For Practice”, Human Resource Management, Summer 2007, Vol.

46, No.2, Pp. 285-307. 8 Carlson, Margaret S., “360-Degree Feedback: The Power of Multiple Perspectives”, Popular Government, Winter 1998

Feedback Intervention Meta-analysis on 607 effect sizes, 23,663 observations “On average, feedback intervention has a moderate positive effect on performance. However, over 38% of the effects were negative.”

Kluger, A.N. and A. DeNisi, “The Effects of Feedback Interventions on Performance: A Historical Review, a Meta-Analysis, and a Preliminary Feedback Intervention

Theory”, 1996. Psychological Bulletin, Vol. 119, No.2, 254-284

360 design elements drive success—or

failure

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Pitfall #2: Poor Development Planning and Timing for 360s9

As many improvement initiatives fail due to leadership in development planning, 360 implementations often fail because of these similar factors:

Improper Context - Organizations often neglect to consider the appropriate context

for 360s to be implemented and sometimes elect to execute 360s when the organization is not ready to embrace changes in development

o One study indicates that “organizations considering serious restructuring or downsizing are not in a good position to begin implementing” 360s

Cynical Culture - Organizations experiencing a pervasive culture of cynicism are

equally not suitable for 360s o Another study found that participants who expressed cynicism to

organizational initiatives were less likely than other participants to change for the better

Pitfall #3: 360s Used for Promotional and Punitive Purposes10

Organizations often combine the use of 360s with traditional appraisal systems to help determine compensation and punitive consequences. Utilizing 360s for appraisal purposes rather than development purposes yield several disadvantages:

Wrong Focus - Recipients and raters of 360s under a performance appraisal system

will lose focus for developing their leadership competencies

Biased Ratings - 360s participants may attempt to ensure that reflected 360s ratings

will be “largely positive (or at least balanced) and will serve their interests as well as the organization’s”, will not ruffle any feathers, or will exact punishment based on personal motivations

Inappropriate Metric - Furthermore, 360 competencies are not equivalent to

individual accomplished objectives, the metric most often used for reward and punitive decisions. They instead highlight the necessary mindsets that precede task accomplishment.

Best Practices in Multisource Assessments

In addition to avoiding the common pitfalls many organizations erroneously commit to, health care organizations can further success by following research11 for 360s that incorporate three success factors into their design.

Success Factor #1: Facilitation

Facilitation typically occurs in a workshop setting with participants and a facilitator after the evaluation of 360s. Facilitation includes the following elements and benefits:

Clarity - The facilitator explains the process and purpose of 360s to participants and

subsequently clarifies questions raised in the workshop

Guidance - Participants can receive guidance on the interpretation of 360s results

and leave facilitation sessions with a greater understanding of how feedback relate to their day-to-day work Several research studies underscore these points:

9 Leanne E. Atwater, Joan F. Brett, and Atira Cherise Charles. “Multisource Feedback: Lessons Learned And Implications For Practice”, Human Resource Management, Summer 2007, Vol.

46, No.2, Pp. 285-307. 10

Lepsinger, R., Lucia, AD., “360 Degree Feedback and Performance Appraisal”, Training, Vol. 35 Issue 9, P62 11

Leanne E. Atwater, Joan F. Brett, and Atira Cherise Charles. “Multisource Feedback: Lessons Learned And Implications For Practice”, Human Resource Management, Summer 2007, Vol.

46, No.2, Pp. 285-307.

360s for development not for

appraisal

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Study Description Study Results

Study compared effects of performance between groups that received facilitation post 360s and groups without facilitation

Results pointed to a statistically significant improvement for groups that received facilitation

Study compared companies on meeting pre-established objectives between groups that received facilitation post 360s and groups without facilitation

Results showed that all companies that chose not to facilitate 360s failed to meet their pre-established objectives

Success Factor #2: Coaching

Coaching is often executed through one-on-one meetings between a mentor and a participant following the 360. In addition to explaining and interpreting the results of participants’ feedback, coaching composes of these processes and are supported by the following studies:

Planning - Coaches aid participants in the process of forming their individual

development plans and identifying concrete goals to improve upon their competencies

Troubleshooting - Coaches also provide continual troubleshooting support for

participants as they work towards pre-set goals Several research studies highlight these concepts as well:

Study Description Study Results

Study explored effects of executive coaching for 360 participants

Executive coaching improved participants’ ability to set specific goals, solicit ideas for improvement from supervisors, and resulted in better ratings overall

Study explored willingness to accept 360 feedback

Coaching aids participants to more willingly accept feedbacks’ accuracy and usefulness by limiting negative emotions

Study explored benefits of 360 coaching

“managers who worked with a coach were more likely to improve in self-awareness, employee satisfaction, commitment and intention to quit”

Success Factor #3: Alignment

Change management of any scale often meets resistance. 360s are likewise not exempt from resistance and ambivalence among the feedback participants. To ensure buy-in to the feedback process, alignment comes in the following forms:

Communication - Organizational leaders must communicate clearly to staff how

360s fit in and adds to existing organizational visions and goals

Integration - Research suggest the need for organizations to integrate the 360 with

other development options, performance appraisal, and training as examples of “clear and careful implementation strategies with 360 feedback”

Full Support - The key for organizational executives is to fully support 360 efforts

and allow participants to adopt the 360 as a legitimate development tool for the organization

When these three success factors are implemented in concert, organizations show their participants that management is dedicated in providing a complete package of 360s that extend beyond simple reflection and build upon practical and useful daily work support.

360s more effective with facilitation and

coaching

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A Better Way to Support Individual Development Planning

The Advisory Board pays careful attention to this research in its approach to 360s, from the design of the tool to the process of creating individual development plans (IDPs). Foundational elements of the Advisory Board’s 360 PLUS assessment are comparable to many tools, but also include crucial elements of difference:

Targeted

Competency Model Comprehensive

Feedback Approach

Prioritized Individual Action Planning

Workshop

Conventional Service

9-18 competencies Feedback from distinct sources combined into single report

Tool for individual development plans

Advisory Board Approach

15 health care competencies, PLUS competencies comprise 54 observable behaviors12

Competencies rated for both current performance PLUS future importance

Three distinct reports—supervisors, peers, and direct reports—PLUS congruency to self-report

On-site, faculty-led debrief PLUS development planning

Within the Advisory Board 360 PLUS, rated leaders are not rated on each competency. Instead, raters assess observable behaviors for the leaders that in turn translate to each competency. For example, for the competency of Financial Acumen, observable behaviors include:

Ability to use core financial concepts (ROI, capital budgeting, financial ratios) when planning and making decisions

Closely monitors ongoing financial performance in area of oversight

For the competency of Communicating Effectively, observable behaviors include:

Expresses ideas clearly, succinctly, and logically

Informs staff about pertinent issues in a timely manner

Health care organizations engaged with the 360 PLUS also have the option to add three custom competencies to their reports to accurately capture the needs and priorities of each organization.

The Targeted Competency Model

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The Advisory Board Company competency model, or competency “wheel”, was developed with extensive input from hospital executives, hospital educators, and leadership development

experts. These competencies are critical to leadership in health care.

The power of three distinct

reports

Providing focus to 360 plans for

real progress

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After receiving ratings from supervisors, peers, and direct reports, each individual’s competencies are then mapped onto the framework below. First, individuals are encouraged to focus on the top half of the competency map–the skills deemed most important. On the other hand, they set aside competencies in the lower half of the map due to their lack of importance to the organization. Individuals can shift their limited development efforts away from less important competencies, barring a dramatic shift in organizational strategy and direction that changes their priority.

When guiding participants and organizations on the most efficient way to develop and train leaders, the 360 PLUS uses a selective strategy in choosing the competencies to improve upon. For individuals, competencies that lie in the zone of compensate, develop, and leverage are of particular interest due to high future importance:

Leverage – Individuals are encouraged to utilize their strengths for the organization in

these competencies through new and expanded roles, such as coaching or training

Develop - The Advisory Board recommends spending the bulk of time and resources

to improving individual competencies in the develop section, as research13 indicates that leaders who receive copious amount of training and support in improving competencies receive limited growth after reaching a certain performance plateau

Compensate - Individuals must understand their weaknesses, find new partners and

methods to support their competencies that need to be compensated, and discuss with their managers how they can better allocate their time and resources away from roles requiring these competencies

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“Return on Leadership-Competencies that Generate Growth”, McKinsey & Company, accessed October 24th, 2012,

http://www.mckinsey.de/downloads/kompetenz/organization/Return%20on%20Leadership.pdf

Compensate Develop Leverage

Most Important

Future Importance

Least Important

Weakest Strongest Current Performance

Creating a Development Plan

Set Aside

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Development PLUS Leadership Deployment

Beyond these core individual elements, however, organizations have the opportunity to direct the data generated within the feedback process for much greater returns. The concept of “leadership deployment” can accelerate the senior executive team’s efforts to build the management team they need to address looming challenges. A strategy of “development PLUS deployment” is the next level of sophistication in 360s. 360s allow health care executives to see their current leadership talent and suggest the best ways to develop and utilize their skills. In the table below are several best practices in “powerhouse” talent management that stem from 360 feedback data. Most hospitals are not using all of these practices, and unfortunately, none appear to be using all of them.

Talent Best Practice Description Self-Test

Moneyball leadership deployment

Coaching matchups based on real skill data

Are we spending too much time trying to cover up our basic weaknesses?

Leadership SWAT teams

Ongoing roster of leadership assets

When a special project arises, do I know already who has the special skills to drive the initiative?

Hi-po focused succession plans

Identified high-potentials, with targeted training interventions for each

Do I know my future senior execs—and do I know what could derail each one?

“HD” leadership roles sculpted to the individual

Personalized leadership roles based on individual strengths and weaknesses

Have I ever redrafted a leader’s role with legitimate changes to responsibilities?

Laser-focused mentorship pairings

Relentless discipline of developing most crucial leadership competencies for each leader

Do my leaders have mentors based on specific leadership skills?

Extreme-ROI expert catalog

Surfacing the truly extraordinary on specific skills

Do I know who the absolute peak leader is for any given leadership skill?

Talent deficit reduction Targeting revealed weaknesses across the leadership group

Are we making leadership investments based on assumptions—or actual information?

Using any combination of the best practices shown above, organizations can match leaders in need of developing or compensating their competencies with other leaders within the organization who excel at these same competencies and can leverage their strength for the betterment of their colleagues. Below are two detailed examples highlighting the utility of 360s:

Leadership deployment the next generation

of 360 utilization

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Hi-Po Focused Succession Plan Report

High-Potential—Leader with Several Peak

Competencies

Peak Competencies (in top 10% for each competency)

Red Flag Competencies (bottom 50% in each

competency)

Joe Crump

Service Orientation and Customer Focus

Identifying and Recruiting Talent

Constructive Thinking Financial Acumen

Process Management

Prioritizing and Delegating

Giving Feedback

Upward Management

The executive team of each organization can utilize the above report for two purposes. First, leadership can use the report in conjunction with available appraisal reviews to help identify leaders appropriate for future succession. This report also allows leadership to collaborate with high-potential individuals in developing and taking more responsibilities in roles related to their peak competencies. They should also be aware of participants’ red flag competencies and reflect on ways to compensate or job-sculpt for these competencies.

Extreme-ROI Expert Catalog

Competency Top 3 Experts

Communicating Effectively Elliot Parker Jane Warren Jay Bradley

Giving Feedback Jordan Smith Susan Summers Jennifer Taylor

Identifying and Recruiting Talent Isabelle Milner Emily Johnson Madlyn Peyton

Developing and Retaining Talent Jeanie Morgan Christian Thompson Mallory Clark

Building and Strengthening Relationships Malinda Bryan Melvin Cordova Damian Friedel

Executive teams at each institution can also use the ROI catalog report to great effect. When seeking to find a suitable individual to spearhead a project, leadership can use the catalog to quickly locate possible candidates. The report also can be useful when seeking to form teams for an ad-hoc assignment. In this case, leadership can mix and match the most appropriate individuals as to leverage their respective strengths in a collaborative setting.

Organizations can further push the development process by selecting individuals in need of improvement and equipping them with new instruction and training on the competencies they need to nurture. Previously untapped for individuals, competencies rated as lower importance can even be used for job sculpting in ensuring that each individual’s strengths are applied to their daily work.

360 deployment reports key to identifying support for initiatives

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Ultimately, health care executives can use the 360 PLUS in the following ways:

Personalized development pathways for individuals

Clarity for supervisors to best help support these individuals

Sense of overall leadership assets to deploy against coaching and special initiatives

The Advisory Board’s 360 PLUS assessment has incorporated these elements to allow health executives to better guide their leadership development with a dashboard of leadership potential.

The business of health care is marked by layers of complexities. In this environment, a 360 assessment can be a valuable process when designed with the proper elements of facilitation, coaching, and alignment to organizational strategy. Ultimately, a “PLUS” approach to the 360 can enable organizational leaders to actively leverage their leadership assets for maximum leadership strength.

For more information, contact:

[email protected]

A new 360 approach for collective

capacity

mailto:[email protected]