The coaching industry has been growing in leaps and bounds. Last year it was sized at over US$2.3 billion globally and growing 4.75% per year. However, according to the International Coaching Federation, Asia, accounts for less than 5% of the industry with nearly 80% of economic coaching activity occurring in the US and Europe.
Is Coaching a Western Fad?
The under-representation of coaching in Asia begs the question "is coaching a western fad?" I can attest to the existence of quite a few over-zealous life-coach marketers and other disingenuous characters coming from the US, so I wouldn't be surprised if some portion of that US$1.8 billion in western coaching revenue was being spent in vain. On the whole, however, this is likely not the cause of the global coaching gap. Consider that Asia contains more than 25% of the global economy, yet less than 5% of coaching activity. That's a big discrepancy.
The evidence for the benefits of coaching is also quite strong. Business icons like Bill Gates and Schmidt have publicly extolled the benefits of coaching and recommend that "everyone should have a coach." Ample studies demonstrate the effectiveness of coaching on positive business outcomes such as: productivity, quality, customer service, retention, cost reduction, profitability, and teamwork. One of the leading coaching methodologies, developed by Marshall Goldsmith, has a 95% success rate in achieving significant behavioural improvement. Coaching is one of the most trustworthy tools in the leadership development industry's arsenal.
All this evidence supports the conjecture that coaching is likely to become a business best practice that has simply not yet fully diffused to other markets.
What Makes Coaching So Effective?
It turns out answering the question "why does coaching work?" is quite difficult. Stratford Sherman and Alyssa Freas of the Executive Coaching Network articulate this point well in the Harvard Business Review:
"Unlike most business processes, which tend to reduce information to abstractions, executive coaching engages with people in customized ways that acknowledge and honour their individuality. It helps people know themselves better, live more consciously, and contribute more richly. The essentially human nature of coaching is what makes it work—and also what makes it nearly impossible to quantify."
Good coaches support their clients in many ways including: fostering time to reflect; increasing self-awareness; providing different perspectives; aiding in goal setting; increasing accountability; providing guidance; and leveraging expertise to help clients "hack" their psychology to achieve greater results. Therefore, businesses and professionals would do well to seek out coaches with backgrounds in psychology, multinationional corporate experience, certified in a proven process, and able to demonstrate strong working chemistry with their coaches.
When to Use A Coach?
Due to the complexity and rapid pace of change in the business world, leaders must constantly learn new skills, adapt to new situations, and reflect on the effectiveness of their actions. As Mr. Gates and Mr. Schmidt purport, this is reason enough for everyone to have a coach. Assuming you don't quite have the budget for ubiquitous coaching, you may consider the following five situations for leveraging the value of coaching helpful.
- Changes in Leadership: Leadership positions require great skill, energy and focus to achieve success. It makes sense that even if the right candidate for a position is chosen, they could still fail because the early pressures of getting to know their new team, peers, and strategic priorities, added on top of the normal role requirements, is just slightly beyond their capacity. An executive coach will help new leaders pick up the interpersonal dynamics and hidden signals more easily, while also boosting their motivation and resilience. Even if the new leader was bound to succeed, a coach will be able to accelerate the time it takes for them to reach full effectiveness.
- The Transition from Functional Expert to Influential Leader: Large organisations are complex places and navigating them effectively is a difficult skill-set to master. Thought leaders like Jeffery Pfeffer and Marty Seldman have pointed out that a large percentage of highly skilled and capable professionals burn out and fail to reach their full potential because they fail to build influence and learn this skill-set. They advocate coaching as a highly effective method for helping ethical leaders address this challenge.
- Career Transitions: Choosing a new field in which to spend the next 20 years working is a daunting decision that will have a huge impact on your life. Coaches help their clients connect to their inner values and purpose which enables them to make better decisions. Coaches also effectively influence their clients to keep performing at their best during such critical transitions.
- Accelerating High Potential Talent: Businesses are often good at identifying who in their ranks could become the next CEO or C-Suite leader. Preparing them for that position, however, is much more difficult. A good coach can help maximize learning and behaviour change turning 6-12 months into the equivalent of several years of leadership development, enabling a business to strengthen its talent bench or prepare for the stepping-down of C-suite leaders.
- Strategic Initiatives: Similar to "changes in leadership", oftentimes business-critical projects such as restructurings, M&A activity, or entering a new line of business, must be executed on top of ‘business as usual' activities. The stress placed on leadership effectiveness in these cases is huge. Coaches will help leaders to effectively manage these priorities while maximizing their leadership effectiveness.
Management research, top business leaders, and economic trends all confirm that business or executive coaching is a highly effective tool for generating growth and ROI. However, from an economic perspective, coaching as a best practice is 8x more prevalent in North America and Europe. This strongly suggests that Asian businesses and professionals would do well to ask themselves "what problems do I currently have that I should be using the global best practice of coaching to solve?"
Justin Paul, Fortune 500 HR leader & consultant, has helped executives in over 20 countries build their leadership capability. Currently CEO, Latchmere Performance Solutions Ltd. Justin@Latchmereconsulting.com
Christopher F. Bruton, Executive Director of Dataconsult Ltd, has 46 years business experience in Thailand, providing regional forums, seminars and reports helping business capitalise on future trends. chris@dataconsult.co.th.