Executive coaching is suboptimal for corporate needs

Sep 25, 2020

Companies pay huge amounts for executive coaching. 80% of companies do not measure returns. 95% of the companies get no returns whatsoever as an organizational return.

This may seem heretical. This is my documented evidenced-based finding built on work I and coaches I trained have done with a few hundred corporations and several thousand clients. Many L&D managers who hire coaches can at best say what behavioral changes were witnessed, and what client leaders said they benefitted from, both anecdotally, and not with structured evidence with pre and post psychometrics.

If there are organizations that evidence this shift, I am happy to be proved wrong. My next question would then be, ‘how did this shift in behavior benefit the organizational performance goals?’

If there is one company that does anywhere in the corporate world, it would be a powerful example, and I would love to know.

Some of what limits executive coaching today and makes in suboptimal are the following.

Coaching is remedial

When companies talk about developmental coaching or performance coaching, it’s still often a euphemism to remedy what is seen as limiting executive performance. It’s rare that organizations identify people with high potential and in a structured way help them to perform to that potential. The root of this issue is that very few companies measure potential. Their focus on short term performance results in meaningless periodic performance reviews and intervention to remedy what is observed as weaknesses.

If more companies followed such practices as Adobe’s Check-In, there could be more of genuine potential based coaching rather than remedial.

Coaching is all about behavior

Behavioral coaching is cliche without meaning. All coaching should be about changes in the mindset of beliefs and values leading to shifts in attitude and behavior. However, the behavioral shift is the means to an end in terms of enhancing the potential of the executive in order to deliver superior performance.

Unless behavioral shift is measured in terms of added value to the business performance of the organization, there is no sustainable benefit to the sponsor of coaching.

In the early days of coaching there used to be angst-ridden outpourings from psychologists and psychiatrists about how misguided coaches are misdirecting their executive clients. Despite that noise, coaching has flourished, mainly because coaches, many of whom have executive domain experience, come with real-life language that makes sense rather than psychobabble.

Coaching is to checkboxes

Coaching as part of a larger part of training & development has become a transactional piece of the budget in much L&D planning. Just like the adage that people with no job to do are the ones ending up in training programs, coaching has also become a check the box item. It is often not about the genuine needs of the leadership development process but the fulfillment of budgeted costs. Before L&D managers raise a storm on this, do read through this article. It’s about training from one of the better-known training organizations, and what it says applies to coaching as well.

Coaching is only individual

Most companies we work with a focus on one on one individual coaching. This happens for two reasons. First, they do not know about other forms of intervention. Secondly, the executive ego requires individual attention if coaching is promoted as a reward rather than a remedy, a bit of a coaching conundrum.

Organizations can derive maximum value out of coaching intervention only if it is a larger systemic effort that involves both individuals and teams they work in, to align both to organizational goals. It is rarely one or the other but both.

In addition, most coaches would coach teams at about the same or similar price point as individuals, which makes the systemic team and individual coaching more value-added. Most importantly, systemic coaching can work to organization goals, and the investment returns can be best evidenced.

Coaching does not involve stakeholders

Leadership is not about how leaders perform in isolation; nor is executive leadership coaching. From the starting point of contracting to coaching objectives to obtaining feedback on client behavior and performance prior to coaching, involvement in the coaching process, and in obtaining feedback and inputs to move forward during coaching, stakeholder involvement is crucial.

Quite often, stakeholders are limited to colleagues at work, peers, direct reports, and superiors, mostly in obtaining feedback. This is not enough. At one level, many other stakeholders from outside this circle and potentially those from the future, who impact the executive and executive’s performance and who in turn are impacted by the executive and the executive’s decisions and behavior, need to be brought in. They need to be heard at least as voices, if not physically present. At another level, some stakeholders such as team members need to be part of the coaching process.

Coaching outcomes are not well defined

One of the mantras of coaching as well as any leadership activity is ‘Always Be Contracting’. Expectations need to be defined and documented to avoid confusion. Without these defined expectations as to the outcome, there can be no coaching and no outcome, unless accidental.

There is often a counter-argument that outcomes change, so what’s the point in establishing outcome. This is as relevant saying we all die one day, so what’s the point in living; makes just as much sense too.

Coaching effects are not measured

Coaching is far too expensive and far too critical to leadership development not be treated as a serious investment. No company would let an investment go by without evaluation of returns. It’s surprising how rarely L&D is held by its feet to the fire demanding proof of value. Sometimes I wish that I can meet with the CFO of the Company to ‘sell’ coaching, with whom I can do a far better job.

Selection of Coaches

It’s true that a coach with professional credentials need not always be a great coach, and a coach without training can occasionally be. In any case, what the executive needs, is the right coach, not the best one.

Companies I know check for how many hours of leadership coaching experience a coach has, or what credentials that person has; how often do they actually verify these? I know many coaches who claim to coach CEOs without having any senior leadership experience of their own. I have been a CEO for a large part of my career, yet I rarely have the opportunity to coach CEOs, simply because most CEOs want others to change as they’re perfect. They would like their CXOs to be coaches, heaven forbid if anyone suggests they need coaching.

How many companies verify the coach’s claims to excellence? Even if they do, in an unregulated profession, what is the recourse if what is said isn’t factual?

A person who has no formal coach training and calls oneself a coach could be a great mentor. That person may still be the person the company wants, provided it knows the difference in the value add of a mentor and a coach.

In my experience, the best value companies can get are from experienced corporate leaders who also have had formal coach training. They are the coach mentors who can talk their walk with empathetic exploration.

Coaching is still a word of mouth profession. It is also caveat emptor, buyer beware.

Ram Ramanathan, MCC
Ram Ramanathan, MCC


Ram is the Founder and a Principal at Coacharya. As the resident Master and mentor coach, Ram oversees and conducts all aspects of coaching and training services offered under the Coacharya banner.

Read Next