What coaching can and cannot do for your organization.(Survey)

The authors conducted a survey to measure the organizational impact of coaching. Organizations making greater use of external coaches for senior executives report improved alignment among the leadership team, the team's ability to execute strategy, and leadership behaviors. Greater use of internal coaches is associated with improved teamwork and strategy execution at management levels throughout the organization--high, medium, low. More internal coaching for middle managers appears to improve culture and morale.

Organizations addressing derailment risks through the greater use of internal coaches report positive outcomes; the opposite holds for greater use of external coaches for derailment risks. More internal coaching for solid performers can improve motivation and organization culture, yet they are least likely to receive coaching, compared to high potentials and derailment risks. How coaching is managed also affects organizational outcomes: Organizations that use central coordination of coaching and evaluate its effectiveness report better results. What is measured appears to affect what happens.

Interest in executive coaching is on the rise, and many organizations have made coaching an integral part of their leadership development programs. Although much has been written about how coaching can benefit individuals, coaching as a corporate endeavor remains remarkably unexamined, with scant analysis of the value derived at the organizational level. Ask a dozen HR leaders how their organizations design, deliver, and evaluate their coaching initiatives, and you will likely get a dozen different answers--if they can answer at all. Says leadership expert Jay Conger, "Coaching is one of the great gold rushes in the field of leadership development. Indeed 'thar is gold in them hills' but no one really knows which hills. To make matters more complicated, the techniques are still being worked out."

To bridge this knowledge gap, the authors conducted a research study to identify enterprise-wide best practices in coaching. We define coaching as one-on-one interventions with an individual who is not the executive's supervisor, where the focus is on job-related issues such as demonstrating leadership behaviors, new job transitions, and job performance/avoiding derailment. The emphasis is on building the executive's ability to deal with the issues using his or her own decision making skills, versus telling him or her the specific actions to undertake.

We conducted initial interviews with 10 companies to identify the issues for the survey, then surveyed a broader sample of 55 companies regarding how they manage and measure coaching and other feedback tools. The survey was conducted on-line, targeting individuals with responsibility for leadership and organization development in large companies. The typical survey respondent was the person responsible for coaching initiatives in his or her organization, with a title of manager, director, or vice president of HR in leadership development, talent management, or organization development. Most of the companies (80%) are multinationals, with mean 2003 annual sales of $18.5 billion (median $10.0 billion), and 34,000 median employees. With the exception of one responding company, which had only $1 million in sales, all the other respondents had at least $400 million in annual sales, and 95 percent had sales greater than $1 billion. Thus the sample is dominated by large companies.

The study focused on the following questions:

1. To what degree does coaching influence organizational capabilities, including teamwork and execution; communication; and employee motivation, organizational culture, and values?

2. Do organizations that use coaching more extensively perceive greater effectiveness?

3. Are internal versus external coaches better suited for achieving certain outcomes?

4. How much do companies manage the coaching process and measure the impact?

One potential concern about the survey ratings is that they are self-reports; thus, organizations making greater use of coaching may have responses biased toward indicating positive coaching impacts. To address this, in the interviews used to design the survey we probed for the respondents' attitudes toward coaching. Despite the fact that the typical respondent plays a role in monitoring or coordinating coaching in his or her organization, our interview results indicated the respondents were not necessarily enamored of their organizations' utilization of coaching. To the contrary, they almost unanimously were constructively skeptical that coaching as currently applied in most organizations yields large benefits for everyone receiving it.

One reason for their skepticism was the disorganized approach to coaching today. Often, individual managers engage external coaches one-on-one with little oversight from leadership or organization development specialists who could help improve decision making about coaching. One area of concern is the initial decision to use coaching, versus a possibly better use for the coaching dollars targeted toward other staffing, developmental, or performance interventions. Given the growing groundswell of support for coaching among many senior line leaders, it is often easier to get budget dollars allocated for coaching over other developmental initiatives.

The second area of concern is the lack of organizational learning regarding coaching. With so many coaches being hired and evaluated, if at all, in a decentralized manner throughout the business units where the executives work, the interviewees expressed frustration that some of the basic "good housekeeping principles" regarding identifying effective coaches, matching coaches to coachees, setting proper expectations for the coaching intervention, etc., were being learned and relearned over and over again. The recognition of lack of knowledge management and uniform processes as implied by the interview results increased our confidence in the survey respondents' ability to provide unbiased assessments of the benefits of current organizational coaching practices.

The good news from the study is that coaching programs seem to make a significant difference in overall organizational effectiveness by improving teamwork and ability to execute strategy. We found this to be particularly true when coaching is focused on driving behavioral change rather than cultural change and when the emphasis is on positive performance outcomes rather than remedial issues. Yet the results also indicate that most organizations are still in the early stages of learning to use coaching in a systematic, effective way.

The Nature and Prevalence of Coaching

A key objective of the study was to measure the extent to which coaching takes place in organizations. Because of coaching's growing popularity, we did not focus on measures of coaching incidence over an executive's career. Such long-run measures should yield high incidence rates, given the likelihood an executive will work with a coach at some point during a career. Instead, the survey question asked about the use of coaching as a "significant source of feedback and help on a yearly basis" for different groups of executives and managers. This undoubtedly lowered the measured incidence relative to measures of "any" coaching during the course of a year. Despite this, the survey results indicated relatively high rates of coaching.

On average, the participating companies provide external coaching on a regular basis for only 4 percent of their middle managers and 1 percent of first line supervisors, versus 24 percent of their CEOs and top management team, 16 percent of their general managers and senior vice presidents, and 11 percent of their vice presidents. Some insight into the motivation for using external coaching is reflected in the following quote from one of our interviews. Explains Steve Arneson, senior vice president of executive development at Capital One:

Only 60 percent of the companies report any internal coaching. In contrast, all the participating companies provide external coaching. This may partly reflect response bias: Only companies that focus on external coaching might have responded. Yet the interviews found external coaches are often used at the most senior levels of the organization because of "bandwidth" issues with internal coaches: It often is impractical for the board of directors to coach the CEO and president, or for the CEO/president to coach the entire top management team. Hence the prevalence of external coaches at very senior levels, even in organizations that use internal coaches at lower levels of management: The extent of use of external coaches for each managerial level is about the same in the 60 percent of organizations that use internal coaches as it is in the 40 percent that use only external coaches. Internal coaches are provided on a much more uniform basis in the organizations that use them, ranging between 11 percent and 17 percent for the different levels of management from the top to the bottom of the organization.

External coaching engagements on average last seven months and almost always are designed to address specific needs, versus being used for development on an ongoing basis. Internal coaching engagements last five months on average. Despite the shorter overall duration of internal coaching engagements, in almost one-third of the companies, internal coaching is used for development on an ongoing basis. In such companies, not surprisingly, the average internal coaching engagement duration is longer--almost eight months. Interviews suggest that such companies are more likely to promote from within or emphasize developing all the members of a team as an approach to improving leadership development and team effectiveness.

A majority (57%) of the companies indicated they plan to increase the use of coaching "moderately" or "a lot." Only 2 percent plan to decrease coaching "moderately"; the balance (41%) plan no change in the amount of coaching provided. So the trend clearly is toward greater use of coaching. The tide is definitely rising-but is it lifting all boats?

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