Getting Value from Coaching:
Organizations improve their leadership development ROI when coaching links directly to the strategy and performance.
by Mike Horne, Ph.D

Over the past ten years, coaching has become the fastest growing human resources consulting practice. Today, tens of thousands of consultants identify themselves as executive coaches. The demand for executive coaching, according to credible recent research, will continue to mushroom. Why is executive coaching becoming commonplace in extraordinary organizations?

The growth of coaching practices is attributable to a new focus on organizational leadership development. Organizations with powerful leadership development practices consistently produce desirable long-term results. When coaching is an effective element of an organization's leadership development strategy, long-term improvements--measured by profit, cost--containment, or both--are the likely business outcomes.

Despite its benefits, the economics of executive coaching are rarely explored. Employers are willing paying fees ranging from $1500 to $15,000 a day. Because there are few barriers to entering this lucrative consulting practice, competency and expertise are significant variables. Consequently, every organization should thoughtfully evaluate and manage its coaching relationships.

Valuable coaching will always be a highly customized endeavor for individuals and organizations. As a tailored approach to executive development, coaching produces results to difficult business issues. Here are four practices designed to improve the return on coaching investments.

Link leadership development and business strategy

Best practice companies tie leadership development to organizational strategy. These organizations use multiple approaches to leadership development, including coaching. Effective leadership developers recognize that there are no "one size fits all" approaches to leadership development. Tied to strategy, leadership development creates sustained momentum to achieve desired organizational objectives.

The supply of leaders and the exercise of leadership is in short supply in US organizations, who are already beginning to feel the impact of baby--boomers leaving the workforces. This impact is magnified because of a decline, in real numbers, of 35 to 44 year olds in the workforce. The decline leads to fewer people to fill organizational leadership positions. If the past is any indicator, the future will bring an increasing demand for leadership talent--and there will be fewer leaders.

Strategic preparation for a coaching initiative, as part of the leadership development effort, begins with an understanding of the organization's challenges and desired futures. It is essential to begin with an awareness of the organization's critical success factors. When leadership development initiatives are created without regard for strategy, stakeholder resources are squandered. You can boost the payback from coaching and other leadership development initiatives by starting where payback is greatest.

From strategy, executive agreement on the competencies needed to maintain and to sustain the organization is the next paving the road for coaching. The best competency models blend organizational needs and individual leader capabilities to form a list of desirable leadership behaviors, characteristics, and skills. In application, competency models provide an ongoing assessment tool for leadership development. Coaching is likely to pay greater dividends when the outcomes and results tie back to competencies.

The linkage of strategy and competency stems from an organization's leadership philosophy. Underlying leadership philosophies create performance differentiators that contribute to stakeholder value. Leadership philosophies are deeply ingrained in the fabric of the organization. The philosophies assist leaders in developing others, making critical decisions, and behaving in ways that support the organization's strategic aspirations. A leadership philosophy assists in creating a rich heritage and legacy that engages employees to deliver valued products and services. Like love, a leadership philosophy cannot be purchased off the shelf. It will, however, always incorporate a positive belief in the value of the individual and display a commitment to the long--term success of the organization in service of its stakeholders.

Philosophy, strategy, and competency modeling are activities that require continuing executive involvement. Leaders seeking reasonable returns on development investments hold themselves accountable to organizational change and growth. Ultimately, the stewardship of economic and human development in the organization is a job for leaders.

Differentiate coaching from other development activities

Seasoned executives promote multiple development opportunities for the development of leadership capacity. Successful development initiatives--driven by strategy, competency models, and philosophy--are always the beneficiaries of top management support. In best practice companies, the combination of those factors results in broad and deep approaches to leadership development. Training, coaching, mentoring, and planned rotations are frequent ingredients of skillful leadership development. Organizations maximize their development investments by directing leadership capacity building to specific organizational populations. Effective leadership development efforts typically engage people in developing and implementing solutions to real organizational issues. The very best executive development efforts build communities of learners and leaders.

Coaching, like all leadership development efforts, affects organizational performance. It is distinguishable, however, from other development activities. According to renowned organizational career consultant Beverly Kaye, coaching has an individual perspective. Coaching, according to Kaye, provides frameworks for a leader to align individual and organizational goals. Individual introspection and feedback from others fosters the growth of effective leadership. The effective exercise of leadership can pay off in terms of focusing energy on important business challenges.

Because coaching is usually offered on an individual basis, many organizations fail to consider where coaching could provide the most value. The motivation of coaching consumers varies widely. Some conceive of coaching as a means to "fixing" behavior, while others consider it the hottest executive benefit in today's marketplace. Coaching usually yields a more significant return when it is a systemic response to organizational challenges.

Coaching provides quick, effective and focused development. Three factors contribute to choosing coaching as an appropriate development strategy: time, role complexity, and criticality. Time

Executive time is a scarce organizational resource. The quantity of time in development activities may not be the best measure of development value. Personalized coaching, because of its individual focus, will always have a higher quality quotient than poor external training activities. Additionally, the planning and execution of coaching activities--with their emphasis on learning--contributes to the executive's overall development experience.When every second counts, coaching for in--place leaders is an appropriate development vehicle. Pressed between calls and sandwiched between meetings, schedules resist long executive departures. On--site coaching provides quick, scheduled, opportunities for development.Positive development experiences, in the form of coaching, deepen commitment to accomplishment of organizational goals. The possibilities for skill acquisition and behavioral change increase with the possibilities for deep learning during one--on--one coaching.

Role Complexity

Organizational roles, in some ways, define relationships in organizations. Could you imagine a CEO without a Board of Directors, or an employee without a team leader? Roles regulate our interpretations of the situations and people that we encounter. Often, the interpretations are inaccurate and incomplete. Senior executives, and emerging organizational leaders, operate in complex and demanding environments that create the possibilities for a misalignment.

Senior leaders shun formal leadership development opportunities to side--step perceptions of incompetence or weakness. The climate in American business supports the creation of Lone Rangers and Superheroes at the expense of teamwork. Extended to leadership development, corporations frequently place responsibility for executive development in the hands of the individual. A lifetime of success reinforcement may deter or inhibit additional growth of promising leaders. Leadership scholar Warren Bennis observed that the most successful organizational leaders continued to grow and develop throughout life. In other words, successful leaders recognize that there is always something to learn.

"Sink or swim" and "you're replaceable" attitudes flourish in today's economic environment. These attitudes co--exist with the frequent inability of senior executives to get clear information and feedback. After all, who wants to tell the emperor or empress that he or she has no clothes? Coaching assists leaders, confounded by role complexity, to get feedback and to identify behavioral patterns that get in the way of goal achievement.

In a coaching environment, an executive will be able to set specific and measurable goals. The coaching environment promotes new behaviors and skill acquisition and practice. Organizational roles may encumber personal change, an already challenging human endeavor. Organizational encouragement and support of change for leaders increases the likelihood of returns on development investments.Criticality

Change is unrelenting. Organizations must move with speed to market products and services in hyper--competitive marketplaces. Over the last 10 years, organizations removed management layers, increased spans of control, and increasingly relied on cross--functional teams for process improvement. The consequences of these actions often require acceleration of individual leadership abilities and talents.

Unlike other leadership development opportunities, effective coaching sharpens focus on the individual learning agenda. Because of its personalized nature, coaching produces the possibilities for rapid and long--term change while assisting in the retention of critically skilled employees. Custom--made training may reduce costs associated with failure as leaders develop competence and confidence to lead the organization.

Coaching may also provide the appropriate course corrections on long--term developmental needs. Course corrections may prevent an executive or new leader from derailing his or her career. Coaching will not eliminate failure but may enhance the possibilities of reducing time to success. The reduction of time in development cycles, linked to organizational objectives, results in the creation of organizational value.

Choose coaches with care

The acceptance and growth of executive coaching have resulted in increasing numbers of consultants who identify themselves as coaches. The field is unregulated and there are few barriers, if any, to entry. The promises of quick fixes and bottom--line improvements lure many executives into promises made by would--be coaches. Organizations should protect their development investments by carefully choosing coaches.

Effective coaches will help clients to search for the advantages of change. According to coaching guru Frederic Hudson, "A coach helps to grow strong persons, committed work teams, dynamic work systems, and sustainable communities that function from the grass roots up". Qualified coaches possess sufficient understanding of adult development, motivation and learning theories, and family and workplace systems. While corporate experience potentially enhances coaching credentials, alone, it is an insufficient qualification.

The best executive coaches have expertise in adult learning. The have theoretical and practical biases that they apply to coaching. They are responsive and genuine when asked questions related to growth, development, and motivation. Exemplar coaches translate their biases into frameworks that grow performance tied to organizational objectives.Develop your return on coaching by matching coaches to organizational needs. Coaching matches are more likely to be successful when based on defined skill sets rather than checklists of personality variables or other irrelevant characteristics.The probability of a coach's effectiveness--and therefore the value to the organization----increases when he or she is familiar with an organization's culture and strategies. Coaching is successful when embedded in the organization's leadership development agenda. Successful coaching will always be a partnership between the organization, coach, and the individual client or team.

Assess and learn

Unlike other aspects of leadership development, organizational leaders rarely evaluate the effectiveness or impact of coaching. Stewards of leadership development must regularly assess, and learn, from organizational coaching initiatives. It is common for leadership coaches to create sizeable practices under the auspices of key organizational leaders. The growth of these practices is often well intended but regularly fragmented from the organization's leadership development strategy. A skilled coach can be a persuasive salesperson with abilities to generate seven digit revenues annually. Therefore, it is important for stewards of leadership development regularly to assess its coaching relationships.

Informed assessment begins and ends with a layered assessment. It is simply not enough to ask the recipients of coaching services if they are satisfied. Typically, coaching recipients report delight and pleasure with the process while others around them fail to observe real change. A true 360 evaluation--involving suppliers, bosses, development stewards, and coaches--will yield great information on the organization's coaching investment.

While individual coaching may produce results in quick time periods, its effectiveness as a leadership development strategy can only be determined over the long term. In regular reviews of leadership development, stewards should ask if coaching is making a difference. Those differences should strongly correlate to organizational strategy and performance improvement.

Finally, do not abandon coaching efforts immediately following trial balloons without a healthy appetite for learning. Many variables affect coaching relationships. An assessment of a particular coach or an isolated assessment of coaching effectives is not a reliable barometer of coaching effectiveness. Organizational leadership today is a complex human activity. All can benefit form assistance in leading. Organizations that demonstrate abilities to learn from their leadership experiences enjoy sustained futures.

Coaching is a powerful leadership development tool. One of coaching's outstanding features is its portability. When the "time is right", coaching supports powerful individual and organizational outcomes. Best practice organizations leverage lessons from individual coaching session to lift the organization to new plateaus and vistas. When designed with strategy in mind, executive coaching is an extremely effective development tool. The return on investment in coaching is often very high, particularly when linked to organizational change. Tied to strategy and performance, coaching is a extremely potent approach to supporting an organization's goals.

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