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We often talk about feedback in the workplace as an important employee development tool — but many underestimate the power of feedback in the workplace to also promote effective business development. This is because regular, honest feedback provides frontline employees with applicable ways to adjust performance, while it provides leaders with critical insights by which they can identify their businesses’ key strengths and weaknesses.
Companies with strong feedback cultures are able to close gaps hindering their performance and seize opportunities when they arise, giving them the dual benefit of a competitive advantage and a more positive work environment.
Ray Dalio, founder, Co-Chairman and Co-Chief Investment Officer of Bridgewater Associates, the world’s largest hedge fund firm, is a leading example of how greater transparency can impact a company’s bottom line.
Dalio credits Bridgewater’s astronomical success to eschewing closed-door conversations in favor of what he calls “radical transparency.” Their culture actively fosters relationships between employees and managers where unconventional thinking, constructive disagreement, and honest opinions — regardless of how uncomfortable they may be — are valued and encouraged. According to Dalio, this allows the best, and often unexpected, ideas to flourish.
There are many others who have embraced feedback practices to strengthen their businesses. Here are four companies who are doing feedback right.
This Minneapolis-based food producer and distributor — which has been in the business for more than 150 years — was struggling to effectively engage and motivate their 160,000 employees around the globe.
However, the company found its breakthrough when it shifted to an “Everyday Performance Management” system, which strategically incorporates encouragement, feedback, and motivation into daily, on-the-job conversations between employees and manager.
By shifting its focus from annual reviews to ongoing conversations — and feedback from a retrospective to forward-facing approach — Cargill realized it could impact performance by nearly 40%. Almost 70% of Cargill employees reported that they feel valued and have received useful feedback from superiors.
This hardware company has flipped the feedback script. In addition to ensuring superiors provide feedback to their direct reports, employees also give feedback to their managers on a bi-weekly basis. The organization encourages honest opinions on anything and everything, from general temperature checks to business improvements to management practices.
This regular, two-way model has led to employee-driven initiatives that streamline customer experience by keeping conversations about the company active and ongoing. It also provides employees with a reason to invest in the company’s operations and culture and engage more deeply with their work.
This is no small gain, either — according to Gallup, “those in the top quartile of engagement realize substantially better customer engagement, higher productivity, better retention, fewer accidents, and 21% higher profitability.”
The undisputed king of TV-streaming services, Netflix has long been known for its thriving, feedback-focused company culture. In fact, the term “feedback” is mentioned 11 times on its “Netflix Culture” recruiting page.
Even more, this resource outlines the organization’s five cultural beliefs, which set the tone for employee thinking and behavior in the workplace. The first three of these five beliefs concern communication and thinking:
These guiding principles ensure that Netflix employees are encouraged to practice agency, creative problem-solving, and collaboration — and that they will not be discouraged from expressing unique ideas or even disagreement.
By promoting diversity of thought, the organization promotes greater transparency in the exchange of ideas and feedback — as well as high-level achievement. Indeed, a study by the Center for Talent Innovation found that in organizations with high levels of both inherent (or demographic) diversity and acquired diversity — in essence, diversity of thought — outperformed their competition. In these organizations, employees were 45% more likely to report that their firm’s market share grew over the previous year, and 70% were more likely to report that their firm captured a new market.
Google has always been a company to take the road less traveled. While known for providing company time for employees to work on their individual projects — an approach shared by other companies like DreamWorks — Google has also never partaken in the traditional annual performance review.
Instead, ongoing feedback, paired with employee goal-setting, has been an instrumental part of the company since its founding — the intention being that both employee and company time would be better served developing employees’ skills than worrying over end-of-year reviews.
At Google, managers work with their direct reports to set and achieve goals, coaching them along the way. This approach goes all the way to the top — even Larry Page, one of the company’s co-founders, writes down desired objectives for himself and for the corporation each quarter.
The result? Google is consistently named among the best companies to work for, by both Fortune magazine and the Great Place to Work Institute. This is no small win: according to the landmark Partners In Leadership “Happiness at Work” survey, when employees are happier at work, 85% claim they take more initiative, 73% say they are better collaborators, and nearly half care more about their work.
High-performing cultures and companies are based in the open, honest exchange of information and feedback. By shifting away from processes and focusing more on people and individuals, companies are creating integrated, trust-based work communities that support each other and help drive the bottom line.
Research reveals that prioritizing the exchange of feedback in the workplace creates a chain reaction of benefits. Employees who are recognized for the work they do — and are encouraged to give and receive feedback freely in the workplace — tend to be more satisfied, which leads to a nearly 300% performance increase, fewer absences, and longer tenure.
There’s a lot that can be learned from the companies listed here. While some of their practices might not be the right fit for your company, making a few small changes to how you approach feedback can lead to a more engaged, trusting, and communicative culture.