The case for coaching

David Lassiter is the founder and president of Leadership Advantage. The original version of this article was published in Leadership Advantage Newsletter: volume IV, number 1.

As a business leader it is easy to dismiss the practicalities of coaching your employees on the basis of cost and time. Research shows that effective coaching produces rich returns for both employees and the business, reveals David Lassiter

For years most organisational pundits have known that it is not how much you know but how well you relate to other people in the organisation that really matters. 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. Effective coaching works with executives and others to identify when teamwork is important and to use their skills to foster it. Coaching builds skills and capacities for increased results and effective working relationships.

Coaching paves the way for decision-makers to create higher levels of organisational effectiveness through dialogue, inquiry and positive interactions. Coaching creates awareness, purpose, competence and well-being among participants.
 
One study examined the effects of executive coaching in a public sector municipal agency. Thirty-one managers underwent a conventional managerial training programme, followed by eight weeks of one-on-one executive coaching. Training, including goal setting, collaborative problem-solving, practice, feedback, supervisory involvement, end-result evaluation, and a public presentation increased productivity by 22.4%. Training and coaching increased productivity by 88%, a significantly greater gain compared to training alone.

Although it was once used as an intervention with troubled staff, coaching is now part of the standard leadership development training for executives in companies such as IBM, Motorola, JP Morgan Chase, Hewlett-Packard and many others.
 
In some cases, the coaching is geared toward correcting management behaviour problems such as poor communication skills, failure to develop subordinates or indecisiveness. More often, it is used to sharpen the leadership skills of high-potential individuals.
 
"People are in a legitimate state of doubt about galloping technology, globalisation, 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 studied and evaluated the effects of a coaching intervention on a group of regional and district sales managers within a large telecom business. The third party research study cites a 10:1 return on investment in under a year. The study found that the business outcomes below were directly attributable to the coaching intervention:

- Top performing staff, who were considering leaving the organisation, were retained, resulting in reduced turnover, increased revenue, and improved customer satisfaction.
- A positive work environment was created, focusing on strategic account development and higher sales volume.
- Customer revenues and customer satisfaction were improved due to fully staffed and fully functioning territories.
- Revenues were increased, due to managers improving their performance and exceeding their goals.

What is coaching?
Coaching means many different things to different people. The occupation is fairly new as an organised profession and is searching to find its niche. In many companies and industries coaching is showing up in several ways. One is through the use of external coaches to work with key or targeted individuals (CEOs, senior and middle managers, high potentials, problem managers). Secondly, some companies have hired internal executive and management coaches. Thirdly, they have trained their own management and executive staff in coaching skills. While all of these are valuable initiatives, each has unique implications.

Executive coaching is all about promoting increased self-awareness, self-management, choice, competence and well-being. It encourages and supports a shift in our thinking and behaviour, taking it off "cruise control" and putting it into "manual operation". There is a great difference in the coaching experience that depends on whether the person coaching is truly independent or not.

Coaching without responsibility and authority
According to Mike Jay, founder of B-Coach Systems, "It is easy to mistake a coach for someone who is coaching (leader, manager, teacher, trainer or mentor) as they both use the similar skills. The critical difference is the locus of responsibility, accountability and authority over outcomes.

This difference is key because it shapes the nature of the coaching relationship. Only with a coach is the focus solely on the agenda of the person being coached as a part of a business or organisational system. When a manager is coaching, or using coaching skills, there is at the very least implicit pressure to change in a direction desired by others. With an external coach the focus is on the development of the person being coached. Effective coaching helps clients identify and strengthen the relationship between their own development and requirements of the business. There is a natural tension between these two streams that a coach can help clarify. By asking questions designed to examine assumptions and beliefs, the mental models (is the glass half full or half empty?) of the person being coached are explored. This leads to double-loop learning  where a person can improve not only performance, but emotional intelligence as well. A truly effective coaching experience is one that provides long-lasting results.

Not everyone's a masterful coach
The work of effective coaching within organisations involves unleashing the human spirit and expanding people's capacity to stretch and grow beyond self-limiting boundaries. Coaching should not start with goal-setting and problem-solving, but rather with exploring the underlying concepts or mental models that a person uses to make meaning. What are the assumptions and beliefs that determine behaviour? The truly effective coach knows that you can't solve a problem before you know what the problem really is.

Before they can focus on performance issues, a masterful coach guides the exploration process, identifying openings where there may be blindspots. He or she helps to clarify what really matters to the person being coached. Together, they look towards alignment of personal and organisational goals. Only then can there be commitment within the context of the organisational culture and business. The most effective coaches help their clients see and choose what best serves both themselves as leaders and the organisation.

This exploration of assumptions and beliefs is difficult when the person coaching is a peer or a supervisor within the organisation. Despite the commonly held belief that every leader needs to be a good coach, leaders exhibit this style least often. In high-pressure times, leaders say they "don't have the time" for coaching. Although coaching focuses on personal development rather than on accomplishing tasks, this leadership style generally produces an outstandingly positive emotional response and better results.

The critical need for impact studies
What is not always clear is how the effects of coaching impact the bottom line. A study conducted by MetrixGlobal for an executive coaching programme was designed by The Pyramid Resource Group. Pyramid coached over 70 executives from a multi-national telecommunications company. MetrixGlobal performed an extensive survey of 43 of the participants. Coaching produced a 529% return on investment and significant intangible benefits to the business. Including the financial benefits from employee retention, coaching boosted the overall return on investment to 788%.

We must always evaluate the return to our human and financial capital in light of profitability. It is critical to establish measurements before coaching programmes are implemented in order to account for the change induced by coaching.
 
To be successful in today's ever-shifting market, people can make or break the best business strategy, be the driver or brake in adopting new technologies. People are the raw resource around which business success revolves. No strategy, however well designed, will work unless you have the right people, with the right skills and behaviours, in the right roles, motivated in the right way and supported by the right leaders.
 
An analysis of more than 300 top-level executives from 15 global companies showed that six emotional competencies distinguished star players from the average: influence, team leadership, organisational awareness, self-confidence, achievement drive, and leadership. The higher one goes in organisational hierarchy, the more one's emotional intelligence distinguishes the star performers.

When star performers were compared to average managers, four competencies of emotional intelligence emerged as the unique strengths of the stars. Not a single one of them related to technical or purely cognitive strengths. The following four abilities distinguished those managers who were star leaders: the drive to achieve results; the ability to take initiative; skills in collaboration and teamwork; and the ability to lead teams.

With a clear idea of which competencies to target, another pool of managers was trained to cultivate these four strengths. They became familiar with and were evaluated on each competence, and they set goals for improving them. The result was an additional $1.5 million profit, double that of a comparison group with no training.

One of the most effective ways of accessing greater emotional competency is through coaching. Coaching helps develop sound leadership, outstanding interpersonal practices and the ability to manage organisational conflicts. Coaching is about creating the capacity for appreciative and supportive interaction that leads to greater achievement of business results.