HR Professionals

Introduction

The purpose of this paper is to explore the relationship between executive coaching and benefits for a company it results in. As executive development adds value to strategic operations of an organization, particular attention in recent years has been given to the process of selection and staffing and executive training (Annings, Jack, & Durthmoth, 2001). Executive coaching is a form of executive training or management development program that has the potential to combine both personal career development with organizational goals and strategies (Boyd, 1995). Within the last few years one to one executive coaching became a widely accepted strategy of executive development.

To be more specific, such companies as American Express, the American Management Association, AT&T, Citibank, Colgate, Levi Strauss, Northern Telecom, NYNEX Corporation, and Procter & Gamble employ coaching (Ellis & Conboy, 2004). Executive coaching is normally centered on the following skills: goal setting, practice and feedback, supervisory involvement, effective evaluation of end results, public presentation and speech development, collaborative problem solving (Winter, 2000). When it comes to coaching methods, they can be classified into the three major categories: feedback, in-depth development, and content (Zunitch, 2001).

Popularity of executive coaching primarily is a factor of the economic benefits it results in for organization overall. As such, costs explicit and implicit must be larger then the costs associated with program implementation. As such, this paper will examine the major benefits executive coaching results in looking at the issue from an economic perspective in the first place. We will discuss the influence of executive coaching on leadership skills, managerial skills, and theoretical knowledge that determine success of an executive when it comes to leading company operations. We will then shift the focus on the cost of coaching and the value added for an organization. Having considered both dimensions of the issue, we will then estimate the major contributors to popularity of executive coaching.

Executive Coaching: Leadership Skills and Knowledge

As stated in the introduction, there are three ways in which coaching is practiced – feedback, in depth development, and content. The first two types are essentially centred on personality development and often are practiced through a one to one relationship with the coach. Content coaching, in its turn, provides an opportunity to an executive to accumulate a strong knowledge base in the field mostly needed for successful company operations: finance, strategic planning, and organizational development (Bielski, 2005).

There is a positive correlation between the first two types of executive coaching and ability of leaders to interpret and effectively use organizational climate survey results and, therefore, provide consistent feedback to employees, which, in turn, results in greater company profits. Some organizations even replaced their managerial programs with executive training techniques (Wasylyshyn, Gronsky, & Haas, 2004). Other scholars suggest executive coaches can develop a variety of skills including dealing with change and relationship trust building, public speaking and listening skills (Stopper, 2003).

The skills listed form the base for the process of organizational improvement. As pointed out by a scholar, coaching is centred on the very essential skills without effective implementation of which organizational performance would be significantly worse (Stopper, 2005). Normally, executives report greater level of adaptability and formation of new attitudes. Scholars identify two major types of learning outcomes resulting from practice of the two types of coaching – (1) personal learning for the executive, ability to affect task performance and (2) learning that affected performance like better analysis of the situation, trustworthy relationships with employees, patience and self – confidence (Feldman, 2001). The stated above skills and abilities are directly related to overall organizational performance, consequently executive coaching has a positive impact on organizational performance.

To remain competitive in contemporary environment, organization needs to develop in their leaders not only the essential skills, qualities, and techniques, but also a strong theoretical base in order to enable executives to affectively lead in critical situations based on experience. Content coaching is most effective for managers who already have a sufficient knowledge base in a field, as being carried out in more of advisory style, a coach can highlight the potential mistakes, but cannot help a manager learn the very essentials of a given subject (Stefano & Wasylyshyn, 2005). As such, content coaching is most useful for practicing executives as compared with regular company managers.

Organizational climate is one of the most underutilized and potentially beneficial spheres of executive coaching application that remains ignored by organizations. While companies spend a lot of money on survey design, information collection and analysis of the internal organizational climate, the reason is normally rooted in the inability of a manager to provide feedback in an efficient manner (Frank and Taylor, 2004). Failure of a manager in this specific situation can be attributed to either lack of time, lack of skills, or fear of potentially negative feedback.

At the same time, once the perceptions about organizational climate are formed, they can have a profound effect on all employees and, consequently, on overall performance (Frisch, 2005). Recent studies have reported that there is a direct correlation between successful coaching programs and employee job satisfaction that results in customer loyalty, organizational productivity, and growth potential (Frisch, 2005a; Johnson and Mcminn, 2003; Judge, 2001).

Going even further then this, studies of profitability of stock of a large sample of companies, studies of the survival rate of public offerings, research on steel manufacturing and service industries, oil refining and semiconductor state that implementation of effective organizational practices that positively contribute to overall organizational climate can increase productivity rates by as much as 40 percent (Hall, 1995; Olivergo, Bann & Kopelman, 1997; Schulz, Hauck C & Hauck L, 2001).

Executive Coaching: Value Added and Costs

How and in what form coaching takes place is usually specifically adjusted to the clients’ needs. Most coaching is conducted over the phone with occasional personal meetings. The fees quotes for coaches in 2001 ranged from $400 to $3.000 monthly. At the same time, when a coach is hired for specialized projects that require extensive research and a lot of time, fees can be as much as $5.000 daily. The highest fees are charged for services provided to corporations rather then individuals (Stefano & Wasylyshyn, 2005).

Even though coaching is expensive, an organization is investing in own future when involving in the practice. A recent study estimated that after trainees underwent executive training, company profitability increased by 22.4 percent. In cases when training was followed by one to one executive coaching, productivity gains reached 88.0 percent – which is 4 times as much as training alone (Wasylyshyn, Gronsky, & Haas, 2004).

Given executive coaching can be adjusted to trainees’ schedule and company’s planned expenditures, potential productivity gains significantly outweigh the costs resulting from implementation of the practice.

Conclusion

In this paper, we examined the reasons underlying the rising popularity of executive training. As executive coaching increases company productivity gains by 88 percent when combined with training, which is four times more as compared with training alone, the costs of it for large corporations are insufficient if distributed over all company’s operations. Another reason is attributed to effective development of leadership traits in executives, when followed by knowledge base development through content training, can improve company productivity by as much as 40 percent. It should be further pointed out, that executive training can be very costly for a small company, as such, is most beneficial for multinational corporations.

References
Annings, A, Jack, C, & Durthmoth K 2001, ‘Executive Coaching by Proxy in a Large Organization: A Leadership Development Tool’, Journal of Leadership Studies, vol. 8, no. 1, pp. 61.
Bielski, L 2005, ‘What Makes a Good Leader? the Go-To “Guy” with Vision and Passion Will Top the Org Chart-And Lead Change Management’, ABA Banking Journal, vol. 97, no. 12, pp. 21.
Boyd, S D 1995, ‘Executive Speech Coaching: An On-Site, Individualized, Abbreviated Course in Public Speaking’, Business Communication Quarterly, vol. 58, no. 3, pp. 58.
Ellis, R & Conboy, E 2004, ‘The Emotionally Intelligent Therapist: Using EQ, Assessment, and Coaching to Enhance the Therapeutic Alliance’, Annals of the American Psychotherapy Association, vol. 7, no. 4, pp. 38.
Feldman, D C 2001, ‘Career Coaching: What HR Professionals and Managers Need to Know’, Human Resource Planning, vol. 24, no. 2:, pp. 26.
Frank, F D & Taylor, C R 2004, ‘Talent Management: Trends That Will Shape the Future’, Human Resource Planning, vol. 27, no. 1, pp. 33.
Frisch, M H 2005, ‘Coaching Caveats: Part 2 Characteristics of the Coachee’, Human Resource Planning, vol. 28, no 3, pp. 14.
Frisch, M H 2005a, ‘Extending the Reach of Executive Coaching: The Internal Coach’, Human Resource Planning, vol. 28, no 1, pp. 23.
Hall, D T 1995, ‘Executive Careers and Learning: Aligning Selection, Strategy, and Development’, Human Resource Planning, vol. 18, no. 2, pp. 14.
Johnson, W B & Mcminn, M R 2003, ‘Thirty Years of Integrative Doctoral Training: Historic Developments, Assessment of Outcomes, and Recommendations for the Future’, Journal of Psychology and Theology, vol. 31, no. 2, pp. 83.
Judge, W Q 2001, ‘Is a Leader’s Character Culture-Bound or Culture-Free? an Empirical Comparison of the Character Traits of American and Taiwanese CEOs’, Journal of Leadership Studies, vol. 8, no. 2, pp. 63.
Minter, R L & Thomas, E G 2000, ‘Employee Development through Coaching, Mentoring and Counseling: A Multidimensional Approach’, Review of Business, vol. 21, no. 1, pp. 43.
Olivero, G K, Bane, D & Kopelman, R E 1997, ‘Executive Coaching as a Transfer of Training Tool: Effects on Productivity in a Public Agency’, Public Personnel Management, vol. 26, no. 4, pp. 461.
Schulz, J W, Hauck, C L, & Hauck, R M 2001, ‘Using the Power of Corporate Culture to Achieve Results: A Case Study of Sunflower Electric Power Corporation’, Management Quarterly, vol. 42, no. 2, pp. 2.
Stefano, S F & Wasylyshyn, K M 2005, ‘Integrity, Courage, Empathy (ICE): Three Leadership Essentials’, Human Resource Planning, vol. 28, no. 4, pp. 5.
Stopper, W G 2003, ‘Current Practices’, Human Resource Planning, vol. 26, no. 2, pp. 5.
Stopper, W G 2005, ‘Achieving Post-Outsourcing Success’, Human Resource Planning, vol. 28, no. 2, pp. 7.
Wasylyshyn, K M, Gronsky, B, & Haas, W 2004, ‘Emotional Competence: Preliminary Results of a Coaching Program Commissioned by Rohm and Haas Company’, Human Resource Planning, vol. 27, no. 4, pp. 7.
Winter, M 2000, ‘What Makes a Leader?’, Human Ecology, vol. 28, no. 3, pp. 8.
Zunitch, V M 2001, ‘Put Me in, Coach: Side Business or Salvation, Coaching Is Definitely on the Rise’, Journal of Accountancy, vol. 192, no. 5, pp. 55.

References
Anna, A, Julie, C, & Davis K 2001, ‘Executive Coaching by Proxy in a Large Organization: A Leadership Development Tool’, Journal of Leadership Studies, vol. 8, no. 1, pp. 61.
Bielski, L 2005, ‘What Makes a Good Leader? the Go-To “Guy” with Vision and Passion Will Top the Org Chart-And Lead Change Management’, ABA Banking Journal, vol. 97, no. 12, pp. 21.
Boyd, S D 1995, ‘Executive Speech Coaching: An On-Site, Individualized, Abbreviated Course in Public Speaking’, Business Communication Quarterly, vol. 58, no. 3, pp. 58.
Ellis, R & Conboy, E 2004, ‘The Emotionally Intelligent Therapist: Using EQ, Assessment, and Coaching to Enhance the Therapeutic Alliance’, Annals of the American Psychotherapy Association, vol. 7, no. 4, pp. 38.
Feldman, D C 2001, ‘Career Coaching: What HR Professionals and Managers Need to Know’, Human Resource Planning, vol. 24, no. 2:, pp. 26.
Frank, F D & Taylor, C R 2004, ‘Talent Management: Trends That Will Shape the Future’, Human Resource Planning, vol. 27, no. 1, pp. 33.
Frisch, M H 2005, ‘Coaching Caveats: Part 2 Characteristics of the Coachee’, Human Resource Planning, vol. 28, no 3, pp. 14.
Frisch, M H 2005, ‘Extending the Reach of Executive Coaching: The Internal Coach’, Human Resource Planning, vol. 28, no 1, pp. 23.
Hall, D T 1995, ‘Executive Careers and Learning: Aligning Selection, Strategy, and Development’, Human Resource Planning, vol. 18, no. 2, pp. 14.
Johnson, W B & Mcminn, M R 2003, ‘Thirty Years of Integrative Doctoral Training: Historic Developments, Assessment of Outcomes, and Recommendations for the Future’, Journal of Psychology and Theology, vol. 31, no. 2, pp. 83.
Judge, W Q 2001, ‘Is a Leader’s Character Culture-Bound or Culture-Free? an Empirical Comparison of the Character Traits of American and Taiwanese CEOs’, Journal of Leadership Studies, vol. 8, no. 2, pp. 63.
Minter, R L & Thomas, E G 2000, ‘Employee Development through Coaching, Mentoring and Counseling: A Multidimensional Approach’, Review of Business, vol. 21, no. 1, pp. 43.
Olivero, G K, Bane, D & Kopelman, R E 1997, ‘Executive Coaching as a Transfer of Training Tool: Effects on Productivity in a Public Agency’, Public Personnel Management, vol. 26, no. 4, pp. 461.
Schulz, J W, Hauck, C L, & Hauck, R M 2001, ‘Using the Power of Corporate Culture to Achieve Results: A Case Study of Sunflower Electric Power Corporation’, Management Quarterly, vol. 42, no. 2, pp. 2.
Stefano, S F & Wasylyshyn, K M 2005, ‘Integrity, Courage, Empathy (ICE): Three Leadership Essentials’, Human Resource Planning, vol. 28, no. 4, pp. 5.
Stopper, W G 2003, ‘Current Practices’, Human Resource Planning, vol. 26, no. 2, pp. 5.
Stopper, W G 2005, ‘Achieving Post-Outsourcing Success’, Human Resource Planning, vol. 28, no. 2, pp. 7.
Wasylyshyn, K M, Gronsky, B, & Haas, W 2004, ‘Emotional Competence: Preliminary Results of a Coaching Program Commissioned by Rohm and Haas Company’, Human Resource Planning, vol. 27, no. 4, pp. 7.
Winter, M 2000, ‘What Makes a Leader?’, Human Ecology, vol. 28, no. 3, pp. 8.
Zunitch, V M 2001, ‘Put Me in, Coach: Side Business or Salvation, Coaching Is Definitely on the Rise’, Journal of Accountancy, vol. 192, no. 5, pp. 55.