Leadership coaching, whether in large corporations, startups, or non-profits, is a booming industry, with various studies suggesting that there are upwards of 50,000 coaches generating more than $2B in revenues. Even today, coaching continues on a virtual basis. But coaching senior leaders can be costly, so how do businesses know whether that coaching has been effective in developing their leaders?
According to an extensive 2019 survey of coaches, clients, and HR professionals, 85% of the time, executive coaching is assessed on the basis of post-hoc performance reviews, well-being and engagement surveys, effectiveness of learning, perceived return on investment and changes in 360 assessments. But it’s unclear whether or how these measurements are tied to actual improvement in business outcomes. Indeed, business impact itself is used only 15% of the time as a key measure of coaching success. But it should be used a lot more, both to gauge success and to drive it.
Certainly there is some evidence that if a leader learns how to behave differently — making faster decisions, for example, or delegating more frequently — business results can follow. But this approach to measuring the ROI of leadership coaching requires what I call a double leap of faith: first, that coaching will change behavior, and then that those changed behaviors will lead to results. The problem is that neither assumption is a sure thing. Senior leaders, like all adults, struggle to change fundamental behaviors and styles that have worked for them and have become comfortable over the course of many years. So coaching doesn’t always change behaviors. At the same time, business outcomes almost always arise from a combination of leadership behaviors tailored to a specific situation, as well as strategy, resource availability, economic factors, and more. So even if the coach does help the leader change one or two key behaviors, there’s still no guarantee that business results will improve.
This is not to say that senior leaders shouldn’t work with coaches to improve the way they lead. In my 35 years of coaching, however I’ve found that there is an alternative approach to coaching that is more results-oriented. This is to turn the standard process on its head: Instead of focusing first on behaviors and hoping that they lead to results, start by trying to achieve some specific results, and see what behaviors are needed to get them.
Consider this real (though disguised) example of the typical approach: An information technology firm that was struggling to hit its growth targets invested in a coach, Carol, to work with its recently promoted global chief revenue officer. Pierre was a veteran sales manager, but this was his first C-suite role. After spending some time with Pierre, Carol interviewed his direct reports and several peers and the feedback she received was clear: Pierre needed to delegate more and hold his people accountable for hitting their numbers, among other growth areas. Over the next year, Carol met with Pierre regularly to help him make these shifts. At the end of the year, Pierre felt that he had learned a great deal and his colleagues also reported that he was beginning to change for the better in the areas he and Carol had been working on.
But the team’s sales numbers had not improved at all; in fact, in some parts of the world they had declined. While there were a variety of reasons for the shortfalls such as changing market conditions and competitor price cutting it often seemed that neither Pierre nor the managers who reported to him knew how to address these business problems. So even though Pierre delegated more and held people accountable more effectively, the team’s performance failed to improve.
Now consider an example in which the coaching program focused on the firm’s desired results from the beginning: The CEO of a global pharmaceutical company decided that one of his division heads, Emma, needed a coach. Despite a solid product portfolio and good marketing support, Emma’s division was not meeting either its sales or profitability goals. Furthermore, a recent 360 review found widespread discontent with her overbearing style and inability to build a leadership team that worked well together.
A traditional coaching approach would have been to focus on the behaviors identified in the 360 review, with the assumption that if these changed, then results would follow. But instead of relying on this double leap of faith, Emma and her coach, Alex, immediately identified a couple of short-term opportunities to improve the division’s numbers: first, to increase sales of a few over-the-counter products in a market that was underperforming its historical norms, and second, to ramp up sales of an exclusive new product in a target market, and then to use the learnings to accelerate sales in other markets.
While both of these efforts focused on achieving short-term business results, implementing them successfully required Emma to work differently with her team. Alex helped her to engage the team in shaping the projects and to build collaboration between functions, all the while helping her to conduct constructive reviews of the team’s progress. All of these were areas of behavior or style that were highlighted in her 360 feedback. But instead of working on them in theory or in isolation, Emma and Alex focused on them in the context of achieving specific results. They achieved them in just a few months — and that success reinforced Emma’s new ways of working.
Although this approach to coaching sounds logical and straightforward, many coaches and senior leaders resist working this way. Coaches don’t want to be held accountable for real business results that they can’t directly control, and senior leaders often feel that they already are on the hook for plenty of performance numbers. Why create additional pressure? In fact, most of the time they would prefer that the coach provide emotional support and long-term career help. This means that the coach and the client end up unconsciously colluding in the avoidance of real business outcomes from their work together.
Given the stresses that most businesses are feeling today, there’s a high chance that coaching will be eliminated unless it can be directly tied to the achievement of results. In my own coaching practice, for example, clients are focusing on how to sustain project outcomes with teams that have shifted to virtual working arrangements and looking to identify new business opportunities in the midst of an economic downturn. Helping them achieve real results in these areas, while learning how to lead differently in a virtual environment, will be the key to success. Behavioral changes alone, no matter how dramatic, will not be enough.