Most companies' leaders have a very unrealistic view about how they are assessed by those who are at levels below them.

Usually, they think they're "in touch."  Usually, they're not.

Some years ago, I was working with the COO of a large company in the retail sector. He was planning a significant reorganization and we were discussing the potential issues he might face when it was announced. A few C-Level members of his leadership team would no longer be reporting to him as a result of this plan. They would soon be reporting to the president, who was their peer currently.

I asked how they might act after learning they were moving "down the organization" reporting-wise: "Would they quit? If so, would their departures screw up the hoped-for positive benefits of the new organization structure?"

He assured me they wouldn't. He told me the president had stated (while they developed the plan) that each of these other execs had told him in earlier conversations they would prefer to report to him.

I'll bet any reader can guess what I said at that point: "Why would someone tell his or her peer that they'd prefer to report to them as opposed to reporting to the COO?" The boss didn't have an answer - had just trusted his president when he said it.

I made some recommendations about doing a little due diligence to try to assess how these individuals may actually respond so he could be prepared beforehand. But - like many such organizational changes - the announcement couldn't be held back because it was "urgent"."

They went ahead. Once again, I'll bet any reader can guess what happened: Some of the affected execs quit. Turned out they viewed the new org chart as a demotion and bailed out with nice severance packages.

Rather than streamlining process decisions and bureaucracy; the COO actually created chaos. How could this colossal mistake have been prevented? With 360-degree evaluations done on a fairly regular basis.

Whether managed by outside organizations or internally by the HR function, if the COO had these in hand when he was listening to the president, he would have realized that the president wasn't correct. He may have then surmised that the president was probably more concerned with his own status then the long-term success of the retail chain. He may have realized that the pres was feathering his own nest.

I'm still surprised at how few organizations - small or large - take the time to do these assessments. Here's why they should use 360s:

1. Wake-up Call - A negative assessment of a manager by those above, below, and peer to them is very telling. If everyone thinks someone is a pumpkinhead, but you think he's swell; chances are that you've got a brown-noser on your hands and didn't know it. This will alert you to be more concerned about the veracity of his advice.

2. Early Warning System - If most assessors think this guy is no good, you can act to ensure he doesn't cause a great deal of damage. That may be a development program, using a coach, or simply sitting with the individual and spelling out what you want done to correct his behavior or actions.

3. Morale Building - Most of us hate to see someone conning our boss. It bugs us that he's not smart enough to see he's being conned and it bugs us that the con artist is getting away with something that is wrong. In such situations, it's easy to start to feel like our hard work and loyalty aren't valued or may be misplaced; we may decide to quietly back off because those don't seem to be qualities which are required any longer. When we have the opportunity to speak honestly about those around us, it makes us part of the solution. That feels good. (As long as something is done about the jerk.)

Even if your company is fairly small, or money is in short supply, I urge you to use these evaluations. It will cost you a lot more if you choose to wait.