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The performance dilemma

“Our latest staff engagement results were really quite bad” admitted the HR Director of a mid-sized Asian Financial Services company when I met with her recently. “Staff are really disappointed with their managers”, she shared with me. “Yet, many of those same managers have been sent on very expensive leadership programmes in Europe and North America”, she declared. “And now I don’t have enough budget left to get performance up!”

Of course, there is great prestige in sending managers away to a castle in Europe or to an Ivy League campus in the USA for a week. But what’s the return on investment? Could that same budget have been spent more effectively?

In the “open source era” HR Directors are finding themselves backed into a corner. Their companies are demanding higher performance targets despite sluggish economic growth almost everywhere. And the workforce of the future – the millennials – are questioning whether they even want to be part of a company structure when they can more easily launch their own start-ups. This makes talent retention a key issue for HR Directors. Companies want the performance dividend that comes with talented people, but they are reluctant to invest too much in case they leave.

How do you get performance up when the budget is down?


But coaching is too expensive you say. And anyway, does it even work?

The need for speed

It turns out the open source era is a key driver of the rapid rise of coaching engagements globally. Digital disruption, AI, blockchain, and the shift to platform-based business models are some of the factors contributing to heightened uncertainty and demand for an agile and innovative workforce. Coaching is increasingly seen as a flexible, individually-tailored business performance intervention and an accelerator of organisational learning – a crucial component for enterprises to thrive.

Older generations who currently occupy senior leadership positions want different things from work than younger generations. Millennials value work where they can be acknowledged, find enjoyment and fun, have opportunities to give back to others, work in collaborative environments, and have a sense of stability. Guess what, they want coaching!

In the US, 93% of US-based Global 100 companies use executive coaches. In the UK, 88% of organizations use coaching. In Australia, 64% of business leaders and 72% of senior managers report using coaches. Seventy-one percent of these Australian respondents also stated that having a coach was an important factor in their decision to stay with their organisations.

Coaching has moved away from being remedial. In the past if you were told you needed coaching you assumed there was a problem. Now coaching is viewed as an important constituent of the company’s overall human capital development strategy.

So, what is coaching?

It is a one-to-one learning and development intervention that uses a collaborative, reflective, goal-focused relationship to achieve professional and personal outcomes valued by the person being coached. Coaching – when done well – can inspire and empower people, build commitment, increase performance and productivity, grow talent, promote success, and build high performing teams. It is, quite simply, a way of facilitating positive change faster than it might happen on its own.

In the open source era people are willing to fail fast to learn quickly. The need for speed in learning means people are more willing to seek the help of coaches to understand themselves and to grow and develop rapidly in their working environment. Being allocated a coach is now associated with being singled out as someone of worth to the company.

By estimates of product growth cycle coaching has not yet entered the maturity phase in any market. Coaching will continue to grow in North America, Europe, UK, and Australia. But it is set for rapid growth in Asia, particularly China.

Yes, but does it work?

Accelerating Performance

People who have experienced coaching overwhelmingly report that they were satisfied and would recommend it to others. Various assessments of return on investment (ROI) report the return to be at least equal to the investment, and by some estimates up to seven times the cost of coaching.

Even though coaching is a highly individualized human change methodology there is a consistent body of research that supports the positive effects of coaching as an approach to employee learning and development in organisations, and leadership effectiveness. According to a 2015 review of the research, coaching is the only organisation consultancy intervention known to have proven efficacy!

In a 2016 study of one-to-one executive coaching (conducted by a panel of 11 professional coaches) for 49 program managers and directors of an Australian state government health agency over 6 sessions each, the following outcomes were noted:

• Anxiety: 41.21% reduction • Goal attainment: 37.26% increase • Stress reduction: 28.34% reduction • Leadership self-efficacy: 27.04% increase • Tolerance of ambiguity: 13.89% increase • Self-insight: 10.59% increase • Solution-focused thinking: 8.86% increase • Perspective taking capacity: 5.30% increase • Resilience: 4.49% increase

Coaching works!

But it’s expensive isn’t it? Well not when you compare it to the cost of training and the inevitable drop off in retention. Coaching following training is significantly more effective than training alone, and gains from coaching have been sustained even 18 months after the end of coaching.

Coaching delivers more bang for the training budget buck, particularly in the areas of self-management, leadership effectiveness, and preparing for succession. Coaching is an individually tailored learning agenda that helps to fast-track development.

And it rubs off on others! Managers who receive coaching are more likely to use coaching approaches with their team members and generate higher performing teams. And higher performing teams are the nucleus for organisational growth and productivity.

Investing in coaching has a multiplier effect. Not only does it contribute to more effective individual leadership, but it also promotes better communication both within business units and across boundaries. And as the quality of conversations change the culture changes.

If you want to improve the performance of your organisation and the engagement of your employees, and if you must do it quickly, then professional coaching is the answer!