David Klein began his career at McKinsey, an organization obsessed with feedback. So in 2011, when he launched New York City-based student loan lender CommonBond, Klein made feedback core to his company's culture. Here's his advice for CEOs.

The Wrong Way.

When seeking structured (as opposed to real-time) feedback, Klein says, CEOs should avoid approaching staff directly. Without an intermediary--such as the HR director, an executive coach, or a technology tool--they may feel put on the spot and be less candid. He also warns against treating all feedback as equal. "Listen to all of it, and with an open mind," he says. "But listen to your gut in deciphering what feedback is most effective for you to internalize."

An even bigger mistake, he says, is to receive valuable feedback and not to act on it in a meaningful way. "When improvement is visible," says Klein, "the whole process will be trusted."

The Right Way.

Klein believes that CEOs should solicit feedback on their performance from the very beginning. But how they do it should change as the company and the CEO's leadership style mature. During CommonBond's first few years, semiannual companywide reviews--which still exist--included 20 questions such as, "Rate David on a scale of 1 to 5 on things that are important to us, like inspiration, collaboration, and communication," says Klein. His second-in-command followed up with respondents, asking for more "color" around certain points, which he shared with Klein.

As a company grows, Klein suggests seeking a more holistic view of the leader's performance. Four or five years after launch, he retained an executive coach who conducted 30-to-60-minute in-depth phone interviews with 10 CommonBond employees and 10 of Klein's relatives and friends. The coach then synthesized the feedback into a report.

When the company reaches scale, Klein thinks the focus should be less on the CEO's performance as a leader and more on his or her vision and strategy. Today, feedback at CommonBond has morphed into retrospectives and postmortems during leadership meetings, and one-on-ones about Klein and his team's decisions and execution.