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Exploiting Feedback to Improve Bottom-Line Performance

Team Building | By ExecutiveBrief | Read time minutes

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Feedback is a management tool that should be considered in every aspect of any business, regardless of industry, employees or customer base.

While feedback is vital to the growth and sustained success of any business, regardless of industry, employees or customer base, it may often be met with some level of resistance or uncertainty. For some, feedback seems to equate to, and therefore is received or delivered as, (negative) criticism, when in reality, this belief or response is unwarranted.

According to Merriam-Webster, the definition of feedback is the transmission of evaluative or corrective information about an action, event, or process to the original or controlling source; also, the information so transmitted. Such information may be communicated about an employee or management personnel (e.g. as to their leadership abilities, presentation skills, aptitude for teaching, capabilities in performing a specific task) a service (e.g. as to how well it solves an identified problem or meets a specific need) or an organisation (e.g. how well it is performing under market conditions, responding to changing customer needs, or keeping employees and management informed and equipped with the necessary information and tools to succeed). There are a number of methods that are commonly used for generating feedback, such as surveys (Web-based or via postal mail or email), question-and-answer sessions, groups forums, one-on-one interviews, or even observation.

Feedback has historically been one of the most commonly misused management tools, especially when it comes to performance appraisals. Many people tend to associate the feedback element of the performance appraisal with reprimand for negative elements of one's work or performance, without recognition of positive contributions and achievements, further fuelling resistance to the process. However, when initiated and delivered appropriately, feedback can be very well-received and serves as an extremely valuable and effective management tool.

Both positive and negative types of feedback are necessary to the successful initial development and continual growth of a business entity or employee. Positive feedback identifies what is right about the subject of evaluation and can be communicated through verbal expressions of approval, formal commendation, or remuneration in the form of salary increases, bonuses, or potential opportunities for promotion.

On the contrary, negative feedback serves to indicate what is not working or is failing to achieve the desired result. There is an important difference, however, between negative feedback and criticism. While criticism is typically intended as an adverse judgment, the purpose of negative feedback is to help pinpoint what needs correcting. While the feedback itself may not be favourable, it is delivered in a constructive manner with the purpose of encouraging improvement.

Certain mechanisms must come into play in order for the feedback process to be successful. These can be external, internal, or both. Whatever the instruments or techniques used, the intended outcome is the betterment of employees, management, and by extension, the company and business with which they are associated. Getting feedback is important at top management levels as well, as it indicates a desire to progress, says Ben Decker.[1] By using feedback effectively, managers learn what is wrong and therefore will know on which areas to focus improvement efforts. This will happen, Decker says, only when: CEOs, CFOs, and other top-level managers encourage a culture of feedback within their organisations.

One important source through which feedback is derived is observation. This method necessitates the development of acute listening skills and also requires the ability to read and understand verbal and nonverbal cues. Feedback is therefore closely associated with effective communication. In addition, truly competent managers must be capable of understanding the unexpressed but implied meaning of the information communicated, interpreting nuances and having apprehension of the critical value of all feedback to the current and future success of the company.

It is the responsibility of organisational leaders to encourage personnel and to serve as the example when it comes to using balanced feedback in order to enable proficiency and growth. Effective communication is one tool that CEOs, divisional heads, executive vice presidents, and the like must have in their arsenal as they work toward building successful companies. Developing the communication skills of these leaders within companies will return "big bang for your buck" in the form of the value that feedback will provide right across the entire organisation, division, or subsidiary.

As discussed, feedback is an important element of communication, and communication is vital to business success, so feedback is therefore a key contributor to success as well. But for any of the associated benefits of feedback to be realised, the process must be executed properly, and appropriate action must be taken. In many instances, you must ask permission to offer feedback in advance if you expect the information to be valued.

Consider the following five scenarios that demonstrate the value of feedback for a company's progress and future profitability and success:

  1. Feedback is often used as a wake-up call to staff or even management that some organisation element, process, or tool is not achieving the desired result and an alternative may be needed. In this regard, feedback is used to indicate that a current method for carrying out a duty or delivering on a need is not effective and to suggest that the organisation, its employees, or customers might benefit if a new method were to be considered and explored.
  2. Some companies rely on a 360-degree (multi-rater) feedback programme to help develop all levels of staff. This method of collecting feedback on staff behaviours and performance from multiple sources can be a very beneficial system for enhancing the overall effectiveness of staff and the organisation as a whole, as valuable feedback is obtained that can be used as a guideline for determining areas requiring improvement, change, or development in order to realise sustained growth and progress, now and into the future. And it is well-known that happy staff equals satisfied customers, which translates into more business and, ultimately, greater profitability and a loyal customer base.
  3. Feedback is also vital in gauging how satisfied customers are with the delivery of a service or the quality of goods received. When feedback is offered and the company responds by taking appropriate action, customers feel cared about and valued - that what they have to say is important to the business.
  4. Through this cycle of feedback and response, customer loyalty is built and maintained. In addition, loyal customers are an invaluable source of word-of-mouth marketing, so the company that takes advantage of the feedback cycle is more likely to generate new and repeat business and to retain the loyalty of a satisfied market.
  5. When used to express appreciation, feedback is an excellent tool for morale building. Whether solicited or not, appropriate feedback can be extremely powerful in boosting someone's confidence in their ability to get a job done. This is true even when pointing out that a task is being carried out incorrectly. For example, instead of telling someone that they are doing a lousy job, use constructive feedback to describe or demonstrate an alternative way in which the task might be executed more productively, with more efficiency and less difficulty. Not only will such an approach encourage the person to try the alternative that is suggested, but they also will be more likely ask for help or advice in the future, without fear of censor or ridicule.
  6. When personnel are made to feel that the insights they contribute in the form of feedback is truly valued, attitudes change. In short, valued feedback of personnel, management, customers, and even consultants in business is the cornerstone of its development, sustained growth, and increased profitability, and it is a necessary element in efforts to nurture the longevity and loyalty of customers and employees at all levels.
  7. Feedback is also an important tool for strengthening team dynamics. Working in teams may be challenging at times, especially for those who are accustomed to or more comfortable working solo. However, if a team develops and regularly exercises positive feedback as part of the communication process, members will learn to work together more effectively and productively, and the potential benefits will be endless.

One of the main catalysts for failure or difficulty with the team dynamic is misunderstandings in communication. Such an environment inherently brings together team members with different communication styles, language, and many other factors that may lead to differences in interpreting communication or verbal and non-verbal cues. Ideally, before a team is established, a feedback methodology should be discussed in order to avoid any future miscommunications that may potentially serve to railroad project efforts.

In addition to providing valuable support and direction, the insights offered through both positive and negative feedback can serve as the foundation for a pool of limitless opportunities for improvement ideas as well as constructive ways to build on existing successful outcomes or correct behaviours or processes that are in need of attention or revamping.

Effective and appropriate feedback should be based on honest evaluation and delivered in a timely manner with the intention of communicating beneficial commentary and insight or suggestions that may serve to assist the receiver in achieving more positive outcomes from their efforts over the long-term. It is also very important for feedback to be balanced. Balanced feedback is not a one-sided process where managers or supervisors give or receive a pat on the back for a job well done, but rather both the positive and negative elements of a situation need to be discussed.

When the feedback process is carried out appropriately, there are many benefits to be realised, but every effort must be made to ensure that feedback is not used as a means of verbal assault or criticism. Feedback is a valuable tool in building employee confidence, boosting morale, and enhancing the reputation of the business.

Businesses must understand the importance of customer feedback and consider how valuable this information can be as they work to create new or revise existing services and solutions. In addition, staff training should be offered so that employees are capable of giving and receiving feedback in such a way that facilitates and encourages discussion and further development of both the staff and the company as a whole.

Upper-level management must remember that perfection is an unattainable idea, but with effective communication and an appropriately executed feedback process, there is unlimited potential for improvement in all areas of people management and business. Proper use of feedback is undeniably a win-win for both the giver and the receiver.


[1]Ben Decker is a president of Decker Communications, Inc.

[2]Gray, Rodney. 2004. "How to get your CEO talking (productively) with employees." Journal of Employee Communication Management (November/December).

ExecutiveBrief, the technology management resource for business leaders, offers proven tips, techniques, and action plans that companies can use to better manage people, processes and tools - the keys to improving their business performance. To learn more, please visit: SoftServe Blog

© ExecutiveBrief 2008


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