Every year, organizations engage in the battle of the budget—cutting costs and lowering overhead wherever possible. Each program needs to be justified in terms of productivity and dollars, and to some, the direct and indirect costs of a 360-degree feedback program seem unjustifiably high. If your organization is considering a standard 360-degree instrument, the cost per participant can range anywhere from $175 to more than $350. Choosing to design your own instrument increases the costs dramatically, as do one-on-one data-gathering interviews and follow-up training and coaching. Furthermore, administering the process takes precious time.

Your response to this objection should focus on the business need the 360 process will address. With one of our clients, the key to gaining commitment was demonstrating the connection between the feedback and work unit productivity. At New York Life, the ability to focus training and development plans for managers on competencies employed by above average performers resulted in improved productivity and reduced turnover costs of field managers. At the beginning stages of your implementation planning, you should think about how you might leverage aggregate level data to advance specific organization-level objectives and ask line managers what might be important to them.

You should also be prepared to show how 360-degree feedback is not only an effective approach to a problem but a cost-effective one as well. As with any long-term investment, you will need to offer evidence that the time and energy devoted to the program will yield results commensurate with the effort. Be open to discussing alternative approaches to addressing the business need before making the case for feedback. In addition, you should be able to discuss the relative costs and benefits of making and buying a 360-degree feedback system.

This sense of the risk involved is common in organizations unfamiliar with 360-degree feedback. Some decision-makers are concerned that a 360-degree feedback process will make everyone uncomfortable and create rifts in working relationships, thereby negatively affecting productivity. Others fear that the process could lead to unrealistic expectations of organizational or individual change. In that sense, they see 360-degree feedback as an implicit promise, and they do not want to promise anything they are not sure they can deliver. Kim Cromwell, principal, Cromwell Consulting, observes this in organizations that are working on how to develop skills in the areas of diversity and inclusion. She says, “Organizations run the risk of getting ahead of themselves if what they wish to stand for and the way they behave at the present time is at odds. If they’ve never had the opportunity for self-awareness before the 360, the results of the 360 can be discouraging if not demotivating. Thinking about ways to support change and address potential skill gaps is important right from the start.”

Your response to this objection should focus on the link between the behaviors that are being measured and organizational effectiveness. This is an opportunity to position 360-degree feedback as the foundation of a constructive, up-front conversation about the extent to which the behaviors that contribute to organizational success are being used. To overcome this concern, you must be able to demonstrate that it will be riskier not to take action—that, in the long term, leaving these things unsaid and unexplored will place the company’s future in jeopardy. In Cromwell’s experience the development and use of 360 can be invaluable to begin the dialogue (What do we stand for? How do we want to behave? What can we challenge each other on?), determine ways to support change in behavior, talk about the issues, and identify what is required for building new skills.

While it may take only twenty minutes for one rater or recipient to complete a questionnaire, the total time required is quite significant. Interviews are even more time-consuming, typically taking an hour. Then there is the time required to administer the process, present the feedback, and create development plans. All this is downtime for other activities.

Your response to this objection should focus on the opportunity cost and the value of addressing the problem in a proactive manner. In a competitive environment that requires quick responses to changes in the marketplace and the moves of competitors, an organization that is not functioning at peak efficiency will be left behind. Although it may be true that the problem will fix itself over time, can the organization afford to let the solution evolve? Helping the decision-makers see that any short-term downtime will be an investment in the long-term effectiveness of the organization will help your proposal get serious consideration. Another approach is to start small: give people a chance to see the benefits of a 360-degree feedback program without asking for major commitments of time and money. Those who participate in the initial offering are likely to become strong advocates for increasing the scope of the effort. And no matter how you initiate the process, be sure to consider what needs to be done to make every step as efficient as possible, whether through the use of technology or by considering timing of data collection within the context of key events in the organization.

Many line managers are skeptical of the business value of feedback and fail to see how it can possibly be relevant to meeting organizational goals. Unfortunately, their skepticism can become a self-fulfilling prophecy, because without their support the feedback process is unlikely to have the impact it has in organizations committed to the effort.

Confronted with this type of objection, you should start by gaining the decision-maker’s agreement that certain behaviors are indeed critical to the organization’s effectiveness. For example, if cross-functional cooperation will get the next product to the market faster, you can then describe how 360-degree feedback can be used as an opportunity to shape people’s behavior by communicating what is expected, establishing standards of performance, and monitoring the use of effective teamwork. Your argument should also focus on the value of seeing yourself as others see you and the positive impact this has on work relationships and work unit effectiveness. Your ability to make a strong connection (using real examples from the decision-maker’s experience) between the feedback, individual and team effectiveness, and work unit performance will help overcome this objection.¹

This is a fairly common feeling in organizations that are experiencing growth and success. Summed up in the saying, “If it ain’t broke, don’t fix it,” the feeling is based on the notion that development programs are necessary only when problems are interfering with current profitability.

Your response to this objection should focus on two issues. The first is external benchmarks. Companies that measure themselves against internal indicators of their own performance may appear to be doing very well. This picture may not hold up when the company is measured against the performance of its peer group for these indicators. The second point to be made relates to the wisdom of not waiting for a problem to be serious before taking action. You should use critical incidents to illustrate a potential problem that is not yet serious and discuss the value of preventive action.

We spoke with several people who understood that waiting to launch a well-thought-out 360 feedback process until business or leadership problems were clearly apparent was like closing the barn door after the horses had already run off. “We had some of the best years in terms of revenue growth and profitability,” says Janis Lane of Eisai. “But we could see that in order to sustain that growth and success we needed a strong bench of leaders who were focused on the specific competencies that were required for the organization to grow. That was one of the central drivers for the development of our Leadership Expectations and the 360 process.”

Paul Leone, Ph.D., the manager of assessment and evaluation at American Express, tells a similar story of taking action before there is a problem. “The mindset around here,” said Paul, “is that we are part of a service industry and our employees must be devoted to and driven by great customer service. We also knew that to maintain that attitude employees had to be highly motivated and engaged. Because the leader has such a critical role in employee engagement, we developed a set of competencies and put a 360 process in place to help ensure these key competencies would be developed in our leaders. We took action before we had a problem. Waiting for the level of engagement to drop off before we acted would have meant that many of our customers were already dissatisfied, which we could not allow to happen.”