Not long ago, only a few CEOs turned to business coaches to improve their own performance. Now many companies are hiring executive coaches to train hundreds of their executives and potential executives at a time.
Within the past decade, business coaching has grown from a handful of practitioners to a booming global industry, according to Business Week. All told, business coaching is generating $1 billion a year, according to the Dallas Morning News.
Another sign of growth is that 8,400 coaches now belong to the International Coaching Federation, an increase of more than 450 percent in five years. Overall, the federation estimates there are more than 15,000 coaches in the U.S., and one-fourth of them focus on business.
Half of all companies now employ coaches, according to surveys, such as one released in mid-2005 by Right Management Consultants.
For example, Dell Computer has retained coaches for its senior executives for many years, but it is now offering their services to managers at lower levels, who can get honest feedback on their management styles.
But how does executive coaching affect the bottom line? Is it a costly luxury that offers little return, or does it actually improve a company’s financial results?
Recent evidence shows that business coaches offer a substantial return on investment. For example, several employers, including consulting firm Booz Allen Hamilton, have received an average return of $7.90 for every $1 invested in executive coaching, according to studies conducted by MetrixGlobal LLC. Among the benefits are better team chemistry, improved performance, and higher retention rates.
For individuals, the impact of coaching can be the difference between a dead-end job and a fast-track career. At one large technology firm, a regional vice president was approaching burnout because he couldn’t say no when superiors assigned him more projects than he could handle. His coach, Teresa Pool of Plano, Texas, advised him not to attend meetings at which he wasn’t needed, and to tell his superiors he had too many projects.
By cutting back on his commitments, he devoted more of his time to fewer projects, and his performance improved so much that he won a promotion to head of North American operations.
Most business coaches charge between $100 and $500 per hour. Top coaches can earn as much as $1,000 per hour, according to Gail Aldrich of the Society for Human Resource Management.
Depending on the coach’s expertise and the individual’s goals, executive coaching can emphasize improvements in the person’s work skills, personal skills, and even in his spiritual life.
There is often a tremendous amount of overlap between these approaches. In general, business coaches help executives develop the skills they need to get ahead and get along with people in the office, including skills in communication, decision making, and leadership.
Coaches can also help executives smooth out the rough edges in their personalities and manage their time efficiently so they can balance their long hours at the office with enough time for relaxation, hobbies, and family time.
The most common approach is typified by Prasad Kaipa, the sole proprietor of The Kaipa Group, in Campbell, California.
Kaipa advises top executives in the high-tech industry on how to advance their careers and find personal happiness. Among his clients are executives from Hewlett-Packard, Disney, Boeing, Kleiner Perkins Caulfield & Byers, Navteq, and Adobe, according to a report in Red Herring.
Kaipa helps people identify the weaknesses that are keeping them from achieving better performance. For example, an entrepreneur with an introverted personality might be ideally suited to do the technical research needed to develop a new technology, but once he launches a company around that innovation, his personality could keep him from raising capital, hiring executives, attracting investors, or motivating his employees.
Kaipa charges $10,000 per month if a client hires him for a year, or he takes a share of a client’s salary.
At the lower end of the pay scale is Jeremy Stover, who works with 10 clients a month, charging $300 to $400 per client each month. Stover graduated from The Coaches Training Institute, which teaches new coaches at locations around the U.S., Canada, and Europe.
According to BusinessWeek Online, coaches help clients create a plan that includes specific goals. The goals might include learning to delegate more tasks to subordinates; to gain confidence in meetings; or to be perceived as more of a senior manager.
Another approach to executive coaching is through spiritual guidance. Some executives, once they’ve achieved their career goals and have accumulated the material wealth they’ve desired, find themselves wracked by stress or searching for a larger meaning in their lives. The quest for spiritual enlightenment and a calmer state of mind brings executives to groups such as The Art of Living, where they learn to control their breathing and their stress levels by chanting.
As the business coaching trend evolves, we foresee three developments that will follow:
First, as the high returns on investments from business coaching start to be reported in the business press, it will become an accepted practice at the majority of large companies. Instead of singling out managers who need training in a specific area, such as communication or decision making, Human Resources and supervisors will assign managers to work with business coaches to identify their own weaknesses and set goals for improvement.
Second, companies will increasingly rely on business coaches to groom the replacements for the retiring Baby Boomers. As millions of older executives leave their posts, corporations will need to prepare younger managers to fill those vacancies. In a smaller labor force, there will be fewer executives who are naturally talented; instead, coaches will need to develop their leadership and interpersonal skills.
Third, the business coaching market will undergo consolidation, as thousands of individual coaches align around a few brand names. The well-known management consulting firms are ideally positioned to seize control of this market. Another model is the one used by Action International, which offers coaching franchises around the world. The firm has more than 600 franchisees in 19 countries, and was ranked one of the fastest-growing franchises in 2004 by Entrepreneur magazine.
References List : 1. BusinessWeek Online, September 21, 2005, “A Wealth of Experience on Tap,” by Michelle Dammon Loyalka. ⓒ Copyright 2005 by The McGraw-Hill Companies, Inc. All rights reserved. 2. The Dallas Morning News, August 17, 2005, “Coach Approach: More Firms Employ Mentors to Groom Rising Executives,” by Jordan Robertson. ⓒ Copyright 2005 by The Dallas Morning News. All rights reserved. 3. Red Herring, September 26, 2005, “Simply Seeking.” ⓒ Copyright 2005 by Red Herring, Inc. All rights reserved. 4. BusinessWeek Online, June 30, 2005, “Constructively Confrontational,” by Karen E. Klein. ⓒ Copyright 2005 by The McGraw-Hill Companies, Inc. All rights reserved. 5. For information about Action International, visit the Entrepreneur Magazine website at:www.entrepreneur.com/franzone/rank/0,6584,12-12-FS-2004-0,00.html
