The Business Case for Executive Coaching

There is a simple reason why the term Executive Coaching is still being used to describe leadership development programs — tradition. It used to be that this type of service was available only to executives in an organization. In today’s business world, executive coaching is applied increasingly to emerging talent and new managers as well. At its core, executive coaching has everything to do with unlocking potential and developing leadership skills — at all levels of an organization.

Why Executive Coaching?

There is a convincing business case to be made for having a strong coaching program — it’s associated with both higher employee satisfaction, and better employee performance. An ICF (International Coach Federation) study shows that 60 percent of companies with strong coaching cultures report having revenue above average for their industry. The same study says that 65 percent of employees from companies with a strong coaching culture rated themselves as highly engaged in their company.

A Gallup Report on the state of the American workplace has the range of engagement between 25 and 38 percent, depending on occupation. The report goes on to say that lack of development and career growth is the number one reason employees leave a job — it states: “Employees need help navigating their career, whether that is through coaching, exposure and visibility, or challenging work assignments.”

When asked about the return on investment value of executive coaching for emerging talent, Trixi Menhardt, a lead coach from Globiana, points out that this stage of someone’s career is a good time to take advantage of coaching. There are a few reasons for why this is true. Trixi says: “The older you get, the more responsibilities you have, both at work and at home, which means that it’s harder to make changes. In addition, new managers typically get promoted because they are high performing individual contributors (ICs). As managers they need a very different skill set from their IC skills.”

Executive coaching can be particularly impactful in the global business world. Managing a multicultural team presents challenges beyond the ordinary. Coach Menhardt points out that whether you have a multicultural onsite team, or people spread out all over the world on a virtual team, you need the communication skills, and the cultural awareness, to bridge both the national culture, and the work culture of all the employees, in order to be successful.

What is Coaching and how do you Build a Strong Coaching Culture?

Coaching programs vary depending on goals and resources. Some organizations use descriptive and guided development programs, where there is mandated reading material and milestones to reach, for example. Other executive coaching is based on the individual as the driving force and the one who sets the agenda. The coach is the facilitator in each instance, making sure conversations move forward, and that goals are kept in sight.

A strong coaching culture starts with the corporate leadership recognizing that coaching is a strategic business driver and a critical management tool. In addition, there needs to be clear ownership of the program. ICF’s survey reports that 82 percent of companies have HR as the originator of executive coaching programs.

The Coach

Most corporations only hire executive coaches who are ICF certified. In addition, some coaches have specialty skills, such as training in assessment tools like Myers-Briggs. Also notable — a coach hired as a benefit to the employee is effectively in the position of having two equally important clients: the buyer (the employer), and the coachee (the employee), making confidentiality an important issue.

The ethics guidelines from ICF clearly state that information shared between a coach and a coachee is confidential. Confidentiality is important because it ensures the employee can bring all aspects impacting their professional life to the table, whether those are personal issues or work related, without fear of judgment, or career implications.

Evaluating Success

To some employers, the issue of confidentiality may seem like a hurdle in evaluating the success of an executive coaching program — if you can’t get information about what’s going on, then how can you determine its progress? Traditionally, ROI is measured and presented in neat numbers. In executive coaching there are additional aspects to consider.

Although surveys measuring success of coaching programs indicate highly engaged employees, and higher than average revenue, the real measure of a successful coaching program will be the day-to-day effects it has on the organization as a whole — leaders that are better equipped to lead, work groups that are more creative and functional, higher employee satisfaction and retention, as well as positive business outcomes.

Any organization interested in retention and long-term development of employees, should be interested in executive coaching as a tool, not just for executives, but for emerging talent as well.

By: Felicia Shermis

 

Sources:

TED Talk, Atul Gawande

Gallup

ATD

The Psychologist

The Balance Careers

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