Executive coaching: The hidden perils

Hiring an executive coach comes with risks, warns Square Peg International's Doug Ross


If a company were an eternity ring, its senior management would be the diamonds in it.

But diamonds take a long time to form. They are also challenging to find and extract, and once mined, need cutting and polishing. good directors,too, take time to develop. Many businesses invest heavily in training and developing their executives, refining them to ensure maximum value. The loss of a diamond decreases the value of the ring, as does the loss of an executive from an organisation. And this is happening increasingly as baby boomers reach retirement age. We estimate 40% of executives will retire over the next five years, leading to a marked growth in leadership development, which has carried executive coaching on its coat-tails.

Executive coaching as it is

Executive coaching is increasingly becoming a managment fad, retailed and purchased as a management consultancy product, leading to its certain decline as a resource tool. That’s the view taken at Square peg. Out in the market, it is packaged and promoted as an executive coaching-in-a-box service. Coaches are being ‘certified’ and trained in processes that are supposedly special. Indeed, it is becoming a commodity. More and more we see directors requesting coaching help as an ‘entitlement’ or ‘life saver’. Within companies, human resource departments are getting caught in the middle. To keep coast in line, they are listening to the suppliers pushing executive coaching-in-a-box services.

Executive coaching as it should be

Executive coaching is there to help sehior managers develop and provide value to companies like yours. It can assist in protecting a business’ investment in good people. Square Peg’s research into the area shows that most believe it delivers value to the individual. Fewer believe that the organisation receives high payback. Often people take the benefit and move on to new pastures. If used as a risk management tool though, it can provide real worth. Executives are an investment whose return increases as they rise up the organisational ladder. But some executives ‘crash and burn’ or have experience that limits their future development, while others leave for better opportunities – and therein lies the risk. The real value of coaching is not in increasing the individual contribution of leaders, but in managing the risks.

The art of risk management

The risk is that an executive you employ will not deliver on expectations and will fail at some point. Managing expectations is key and helps to mitigate three key risks:

1) Business decision risk.

This includes: neglecting talent issues and not making tough people decisions early and often; control issues, such as executives making myopic, superficial, self-centred or strategically out-of-line decisions – or simply making too many decisions themselves; and finally, balancing speed and quality, which could mean failing to put a decision through the necessary process.

2) Leadership style-misfit risk.

Growth means executives need to show a breadth of styles to fit various jobs. Sometimes they need to boast more than their natural strengths to fit the strategic requirements of a role, such as during a merger or period of change. Many struggle to fit within a new corporate culture or else find it hard to relate to others from different cultures, languages and nationalities.

3) Organisational Alignment and Commitment Risk.

Executives must demonstrate commitment to advancing corporate goals. To effectively implement strategic change, they must understand and own the strategies. Their expectations must be aligned to those of the organisation in terms of the desired culture and strategy.

Taking on executive responsibilities

Executive development requires an individual to grow and take on higher-level challenges. Executives evolve through these transitions. However, they are vulnerable when evolving into new roles and settings; assuming a ‘stretch role’ too early in their careers, moving to a new culture or company, or experiencing a new function that does not fit their competencies. The key risk factors include the following:

l New job – never been done before

l Knowledge requirements key

l Company direction or results not clear

l Dramatic change expected

l Degree of influence needed to get results

l Breadth and diversity of scope

l Cultural scope or differences

l Organisational setting (HQ, field)

To counter the risks requires support. Executive coaching can be particularly valuable when directed at helping high potential executives get through ‘stretch role’ transitions. Typically, a comparison of the person’s expertise, experience, emotional and analytic intelligence, talents and flexibility in the new role reveals the key risks.

Selecting an executive coach

There are no secret formulas and no perfect coaching process. Individual coaching is a bespoke proposition or dependent on individual needs. Common ingredients of coaching processes include:

l A rapport between the coach and the executive

l An understanding of the executive’s talents, so as to build on strengths, using 360… testing

l Clarified business requirements and expectations

l Objective accession of the match between executive strengths and requirements

l Establishment and contraction of the executive’s behavioural objectives, based on assessment

l Follow-up programme using behavioural change monitoring and support

l Conclusion comprising an evaluation of objectives met

Selecting the right executive coach is essential. It’s vital to find one who will establish a fit with the executive. They should be non-judgmental, tactful contrarians who suppress their own egos to benefit their clients. They must fit the situation, the company and the challenge. Real value and excellence come from coaches who understand business, are impartial and who are courageous in challenging their clients. The focus should be on achieving business objectives and action planning, rather than on issues such as changing interpersonal style, people skills or balancing stress and wellbeing.

A good coach will address the ‘domino issue’. Resolve this and all kinds of other issues fall into place. They will find practical first steps for individuals to act on and that show tangible improvements. Users and decision makers want a shift from psychological expertise-based coaches to those who can address issues of strategy, leadership and change management.

The cost of coaching

Executive coaching is costly and formal controls are not yet widely in place. Making coaching cheap, however, does not necessarily increase its value. One needs to look at the value of the assets being protected. Investment needs to be focused on high-potential executives and those in transition. You should be looking to realise in your executives the true worth of well-cut, beautifully set gems, overlooking the cubic Zirconia next door.

Doug Ross is managing director of Square Peg International, specialising in the people side of change, mergers, acquisitions, joint ventures and cultural alignment. He will be speaking at Growing Business Live’s Birmingham conference on November 16 – for more details visit www.growingbusinesslive.co.uk. Square Peg International is a consultancy guiding leaders and their organisations through transitions.

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