The higher up the organizational ladder an executive climbs, the less he/she can depend on technical skills, and the more he/she must have command of effective interpersonal skills and emotional intelligence.
Organizations spend large sums of money to hire coaches for top executives in an effort to improve these abilities. Are coaching programs effective in improving bottom line performance for organizations?
Research by the Center for Creative Leadership has found that the primary causes of derailment in executives involve deficits in emotional competence. The three primary ones are:
- Difficulty in handling change
- Not being able to work well in a team
- Poor interpersonal relations
A study of 130 executives found that how well people handled their own emotions determined how much people around them preferred to deal with them (Walter V. Clarke Associates, 1997). If you can't manage change well yourself, don't work well in a team environment, and have inadequate "people skills," how will you be able to function well as a leader? Good leaders need to have all of these skills, and the better they are at it, generally the further they go in the organization.
Effective coaches work with executives and other leaders to develop their proficiency in working with change. Their coaching helps leaders identify when teamwork is important, and how to use these skills to foster it. Coaching builds skills and broadens capacity to improve effective working relationships.
Coaching paves the way for decision makers to create higher levels of organizational effectiveness through dialogue, inquiry and positive interactions. Coaching creates awareness, purpose, competence and well-being among participants. Effective leadership coaching is NOT another feel-good exercise based on soft-skills that have no correlation to the bottom line.
In an article in the Harvard Business Review (Jan-Feb 1998) entitled "The Employee-Customer-Profit Chain at Sears", by Rucci, Kirn and Quinn, a model was developed indicating that 5 units increase of employee attitude led to a 1.3 unit increase in customers' positive impression, resulting in 0.5 percent increase in revenue growth.
One study examined the effects of executive coaching in a public sector municipal agency. Thirty-one managers underwent a conventional managerial training program, followed by 8 weeks of one-on-one executive coaching. The training included goal setting, collaborative problem solving, practice, feedback, supervisory involvement, evaluation of end-results, and a public presentation.
Training alone increased productivity by 22.4 percent. Training and coaching combined increased productivity by 88 percent, a significantly greater gain compared to training alone. (Public Personnel Management, Washington, Winter 1997, Gerald Olivero; K Denise Bane; Richard E Kopelman). That's nearly a 400% productivity increase! That kind of productivity has a definite bottom line impact.
Between 25 and 40 percent of Fortune 500 companies use executive coaches, according to the Hay Group, an international human-resources consultancy. According to a survey by Manchester, Inc., a Jacksonville, Florida, career management consulting firm, about 60 percent of organizations currently offer coaching or other developmental counseling to their managers and executives. Another 20 percent of companies said they plan to offer coaching within the next year.
Although it was once used as an intervention with troubled staff, coaching is now part of the standard leadership development training for executives in such companies as IBM, Motorola, J.P. Morgan Chase, Hewlett-Packard and many others. Brokerage firms and other sales-based organizations such as insurance companies use coaches to bolster performance of people in high-pressure, stressful jobs.
In some cases, coaching is geared toward correcting management behavior problems such as poor communication skills, failure to develop subordinates, or indecisiveness. More often, however, it is used to sharpen the leadership skills of high-potential individuals. Coaching can ensure the success, or decrease the failure rate, of newly promoted managers or newly hired managers, which is referred to as on-boarding.
"People are in a legitimate state of doubt about galloping technology, globalization, heightened competition and increased complexity," says Warren Bennis, who teaches leadership at the University of Southern California. "They need someone to bounce ideas off of and to listen to their existential grousing."
Michigan-based Triad Performance Technologies, Inc. studied and evaluated the effects of a coaching intervention on a group of regional and district sales managers within a large telecom organization. The third party research study cites a 10:1 return on investment in less than one year.
The following business outcomes were directly attributed to the coaching intervention:
- Top performing staff, who were considering leaving the organization, were retained, resulting in reduced turnover, increased revenue, and improved customer satisfaction.
- A positive work environment was created, focusing on strategic account development and achieving higher sales volume.
- Customer revenues and customer satisfaction improved due to fully staffed and fully functioning territories.
- Revenues increased, due to managers improving their performance and exceeding their goals.
The Confusion over Coaching Coaching means many different things to different people. The occupation is emerging as an organized profession and sometimes struggles to find its identity. Coach training schools vary widely in their philosophies and competencies. Many consultants and persons trained in psychology are simply calling themselves coaches with no formal training or consistent standards adherence.
In many companies and industries coaching is showing up in several ways. One way is through the use of external coaches to work with key or targeted individuals (CEOs, high potential executives, problem managers). Another way is that some companies have hired internal executive and management coaches. Some companies have trained their own management and executive staff in coaching skills.
While all of these are valuable initiatives, each has its own unique implications. How coaching is experienced by people in organizations, however, is not always clear. There is a great difference in the coaching experience that depends on whether the coach is truly independent, or not. Are they objective? Can they challenge enough? Are they influenced by the politics? Do they have a vested interest in the results?
Coaching without Responsibility, Accountability and Authority The difference between an external coach and a manager who coaches is important, because it shapes the nature of the coaching relationship. Coaches should focus solely on the agenda of the person being coached in their capacity as part of a business or organizational system. When a manager is coaching, or using coaching skills, there is at the very least implicit pressure for some change in a desired direction. That pressure is also present when an organization designates internal personnel to do coaching.
With an external coach, the focus is often on the development of the person being coached, because the coach as a neutral advocate does not have the internal responsibility, accountability and or authority over internal politics and/or ramifications of betrayed confidentialities, whether intentional or accidental.
The most effective coaching helps clients identify the relationship between their own development and requirements of the business. There is a natural tension between these two streams of consciousness that an external coach can help clarify. By asking questions designed to examine assumptions and beliefs, the mental models of the person being coached are explored. This leads to double-loop learning (Argyris & Schon), where a person can improve not only performance, but emotional intelligence as well.
One way to get the most out of any coaching experience is to not only ask questions of the person being coached, but also to gather feedback from those who work with them through 360 degree feedback. Helping clients see how others view them is a pathway to greater understanding of themselves. Getting the clients to be truly open & honest to feedback, however, is one of the most challenging, yet rewarding parts of the coaching process. Effective coaching is based on creating trust and the capacity for appreciative supportive interaction that leads to the achievement of business results.
About Wendy Capland Wendy Capland is the CEO of
Vision Quest Consulting, a management consulting firm specializing in developing extraordinary leaders in organizations. Vision Quest Consultants are experts in the area of leadership development. They provide leadership coaching, consulting and training to top executives and their teams. They also work with executive and senior managers who want to enhance their own effectiveness and the effectiveness and results of their management teams.
Who is your favorite sports coach? 
Sitting and talking with John, a senior division director at a large Canadian corporation, you would get the impression that his team of senior managers were all on the same page and that they worked exceedingly well together. According to John, they challenged each other and provided pointed feedback to decisions that he and the team needed to make. John felt this was true for all managers on the team, except for one manager who he saw as a "trouble maker". His perception was that this manager consistently disagreed with the team and him and, as a result, she was a negative influence. 
Conventional Wisdom says...
