Does Leadership Coaching Improve Organisational Performance?

While the economic downturn has been detrimental to many businesses, positive approaches have emerged that will help organisations deal with the challenges while helping to lay a more solid foundation for the future. Importantly, the key challenge for organisations is to engage, align and motivate their leaders around the critical issues.

Myopic Vision vs. A Balanced, Focused Vision

Many leaders with a narrow, myopic vision for their business have had to adopt a balanced approach to their vision and strategy. A lot of discussion has emerged from the dilemma this causes.

A balanced approach does not deny the importance of being extremely focused and intentional about what needs to be accomplished. It merely acknowledges that there is considerable risk when a leader’s myopic vision is unable to pursue strategic opportunities that exist on the periphery.

It keeps “the main thing the main thing”, while seeing that there may be a more productive path towards achieving the desired business objectives.

A couple of excellent books you might want to look at are Good Strategy Bad Strategy by Richard Rumelt (2011), GPS for your Organisation by Nicholas Barnett (2012), andThe First 90 Days by Michael Watkins (2003). This represents a bit of a cross-section of resources available.

Autocratic Leadership vs. Accountable Leadership

The old adage that “what gets measured, gets done” is critical to the health of any organisation. This applies not only to financial measures, but output and productivity gains, and especially the rising prominence of human capital.

“Command-and-control” leadership has been found wanting through the recession, and in many cases responsible for it. There is no doubt that strong leadership is required, and in turnaround situations tighter control is required.

However, increasingly, leaders are recognising the importance of developing more disciplined and participative cultures that are committed to removing the barriers to implementing strategy. This is supported by the demands for good governance, accountability and transparency in the private and public sectors.

Investment in Talent Management

In many cases the economic downturn has led to unprecedented challenges in global competition, rapidly changing markets, and stakeholder expectations that have resulted in organisations tightening their belts and reducing their budgets.

As companies try to do more with less, employees are being asked to take on greater demands and carry more stress, and there are the issues of declining morale and loss of productivity, causing leaders to question the importance of how their financial resources and human capital is best utilised.

Consequently, organisations are taking steps to acquire and retain leadership competencies through development interventions, otherwise known as leadership or executive coaching.

At its broadest level, coaching is generally defined as a “process of equipping people with the tools, knowledge, and opportunities they need to develop themselves and become more effective”.

While the research into the effectiveness of behavioural feedback as a method of management development has been relatively weak and inconsistent, some results show that when it is coupled with leadership coaching, subordinates indicate a small, but significant improvement.

This was further strengthened when leaders provided encouragement, incentives and opportunities to apply the feedback.

Another key factor in delivering leadership coaching with the goal of seeing improved performance is that those receiving the coaching must believe that the primary motivation for it is “to help the employee rather than to help themselves.”

Therefore, when coaching is being provided directly through an individual’s supervisor, it is important that supervisors be trained to improve the quality of the exchange.

While this doesn’t negate the obvious underlying motivation every organisation has, which is to see leaders improve their performance as it relates to business outcomes, it says that from a development perspective the primary goal must be individually focused, knowing that the organisation will ultimately be the beneficiary.

To better understand the impact of leadership coaching, Right Management conducted a global study of more than 28,000 employees in ten industry sectors in 15 countries.

The results provided a compelling case for leadership coaching that showed when a leader’s development was in alignment and informed by their organisation’s strategy, culture, values, processes and structure, coaching became a powerful mechanism for impacting the organisation.

While empirical research into the outcomes from leadership coaching as a development intervention has been limited, Feldman and Lankau (2005) provide some excellent insights in reviewing current research and provide an agenda for future research. These are summarised as:

> The importance of a Leadership Coach’s background and experience

Some prescribe to the belief that psychologists are most qualified to conduct executive coaching because of their understanding of psychological dynamics, adult development, personality and performance assessments, and the importance of building and maintaining a trusted and confidential relationship.

However, other authors believe that the most effective executive coaches are those who are knowledgeable about the business context in which executives operate. This perspective “views an understanding of leadership, business disciplines, management principles, and organisational politics as the critical core competency of executive coaches”.

> Desired outcomes from executive coaching

Usually coaching is provided with a two-fold objective – to see positive changes in leadership and managerial behaviours, and secondly, to see an increase in performance and organisational effectiveness. Once again, there are three independent variables that impact the ability to effectively measure these objectives:

1 The background and experience of the executive coach

2 The ability to link the coaching to the organisation’s business outcomes, and

3 Whether or not the individuals receiving the coaching understand that their development intervention is more about their future than the organisation’s.

Though it is early days, limited empirical data supports leadership coaching is a construct that can clearly result in improved leadership engagement and recognition, positive behavioural changes, improved moral and stronger performance.