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Huddling With The Coach

February 1, 2005
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Executive coach Brenda Eddy relishes the challenge of working with talented people like Disney’s Anne Hamburger.

    As executive vice president of creative entertainment at Walt Disney Parks and Resorts, Hamburger arrived at the position with professional experience in theater in New York, but had never had a corporate job. Her responsibilities include staging all live shows, parades and other extravaganzas.

    "Anne creates fabulous entertainment," Eddy says. "She is the best in the world at what she does. But she did need to learn how Disney politics works."

    The two began working together 41/2 years ago sorting out the complexities of surviving and thriving at Disney. Eddy has an MBA from Harvard Business School, has been a coach for 12 years and has had her own coaching business for 61/2 years.

    A professional adept at combining warmth and toughness, Eddy gave Hamburger this advice: "You better perform, baby, or you are out of there."

    She says Hamburger, who remains a close friend and confidante, is "super smart and got it in about two seconds. Now she does her job better than anybody."

    Such success stories are feeding huge growth in the field of executive coaching. Bringing outsiders in to coach CEOs, other C-level executives and senior vice presidents is almost a status symbol for today’s rising corporate stars.

    "It’s a very ‘in’ thing to do," says Eddy, whose Eddy Associates Inc. has worked with a long list of Fortune 500 clients. "World-class athletes wouldn’t consider going out without a coach. World-class business talent is the same way."

    Coaching has been stigmatized as a tool for whipping problem executives into shape. But today it is just as likely to be a means for grooming top talent. It is also an outgrowth of the stresses caused by downsizing, globalization and technology improvements that have executives on call 24/7.

    It isn’t known exactly what U.S. companies are spending on coaching, or the kinds of returns their investments are producing. What is known is that the costs--which include testing, 360-degree surveys, the time executives take away from their jobs and, of course, coaches’ fees--can be substantial. Marshall Goldsmith, the nation’s best-known coaching guru, earns more than $100,000 in fees for each executive he works with, and he isn’t the only one raking in such handsome sums.

    Stratford Sherman, a senior vice president with the Executive Coaching Network, estimates that coaching in the United States is a $1 billion-a-year business. The International Coach Federation estimates there may be as many as 40,000 coaches worldwide, an estimate that includes both individual and business coaches. The swiftly growing organization has 8,000 members, up 31 percent in the past two years.

    Since coaching is about interpersonal relationships, it’s hard to translate business results into numbers. "It’s very easy to determine what you spend, but the question is, What do you get back?" Sherman says.

    Consider the case of Rick Cashman, a 43-year-old senior vice president of equity sales and trading for Dallas investment-banking firm Jefferies & Co. Like Hamburger, he is a corporate star.

    The hard-charging Cashman was generating millions of dollars in business for Jefferies when he began working with Gary Ranker, a leading executive coach who has advised business leaders from General Electric Co., Sony and other Fortune 500 corporations. Ranker’s background includes serving as president of overseas divisions of Hallmark Cards and Textron Inc. before returning to school midcareer to get a doctorate in human and organizational development at the Fielding Graduate University, a private professional school in Santa Barbara, California. Ranker works with companies and will coach several tiers of executives. His fees run into the six figures, with jobs lasting from six to 18 months.

    Cashman credits Ranker with opening his eyes to the way he comes across to others. He says he and the company benefited from his learning more about being a good listener and becoming aware of a tendency he had to get too emotional when negotiations didn’t go his way.

    "It’s been a journey, a wonderful journey," Cashman says.

    As simple as it sounds, much of coaching deals with showing C-level executives that they can learn by listening and don’t have to win every argument. Sydney Finkelstein, a professor of management at Dartmouth College’s Tuck School of Business, says critical problems addressed by coaching should be judged differently than bottom-line returns.

    Coaching can teach top executives how they can learn from mistakes, cope with negative feedback and keep an open mind to outside sources of information.


"These executives are very well-educated and rich," Goldsmith says. "They can’t be fooled and won’t waste time. If they think you are wasting their time, they will tell you to go away incredibly quickly."


    "If you reward people for bottom-line results, it is pretty clear the major focus of their efforts becomes results--getting the numbers," says Finkelstein, who wrote about troubled top executives and their companies in his book Why Smart Executives Fail. He suggests financial and career rewards for learning to be open-minded and give and take negative feedback.

"Wild West" frontier
   
One sign of the rise in acceptance of coaching is the intense scrutiny the profession is receiving in academic journals, at leadership conferences and by coaches themselves. Like consulting, coaching is a "buyer beware" business.

    Steven Berglas, a professor at UCLA’s Anderson School of Management, has criticized the profession in the Harvard Business Review.

    "It is one of the most grossly under-regulated professions on the planet," says Berglas, who has a doctorate in clinical psychology from Duke University and taught in the Department of Psychiatry at the Harvard Medical School for 25 years. On a personal Web site, he refers to himself as the "EgoDoc."

    One of Berglas’ criticisms is that coaches can make bad situations worse because they don’t have the background to deal with psychological problems they don’t understand. He cites the case of a problem executive at an automotive parts distributor who was coached for four years by a former corporate lawyer for unacceptable behavior including publicly humiliating a mail clerk.

    The coaching actually exacerbated the difficulty by reinforcing the behavior. Eventually, Berglas was called in, and he found the executive had a serious narcissistic personality disorder that coaching couldn’t alleviate.

    Sherman also sounded the alarm with an article in the Harvard Business Review he co-authored with Alyssa Freas, founder and CEO of the Executive Coaching Network. The piece, titled The Wild West of Executive Coaching, describes the field as "chaotic, largely unexplored and fraught with risk, yet immensely promising."

    "People in executive coaching are realizing it’s time to take stock," Sherman says. He supports seminars organized by the Conference Board that have begun to explore the field of coaching. "It’s time to really sort through quite carefully what is valuable and what isn’t, what are the best practices and what are the best ways to provide value to our clients," he says.

    One concern is that many coaches are not grounded in basic business experience. Or they may have the right experience but end up in the wrong situation, such as a psychotherapist giving strategic business advice.

    "The majority of our work comes as a result of other consultants going in and not being able to do the job," says Jeffrey Davis, chairman and founder of Mage, a business management consulting company in Needham, Massachusetts. He is a 20-year coaching veteran with a background in marketing and management who works with executives at both large and small corporations.

    "These guys are pretending to know something they know nothing about," he says.

    Despite concerns, executive coaches are muscling their way onto the workforce management stage. They are pulling it off by preaching mantras about the joys of good listening and not needing to win every argument, as well as teaching socially challenged number crunchers how to get along with savvy sales executives.

    Coaches who work with CEOs and senior executives say their relationships don’t run along traditional student-teacher lines. By definition, executives have been immensely successful. They might be responsible for billions of dollars in business. They are accustomed to giving advice, not receiving it. They aren’t accustomed to seeking self-improvement.

    Goldsmith says his clients are tough and typically brilliant. "These executives are very well-educated and rich," Goldsmith says. "They can’t be fooled and won’t waste time. If they think you are wasting their time, they will tell you to go away incredibly quickly."


"People in executive coaching are realizing it’s time to take stock. It’s time to really sort through quite carefully what is valuable and what isn’t, what are the best practices and what are the best ways to provide value to our clients."


Celebrity coach
    If elite coaching has a rock star, it is Goldsmith. In addition to his coaching, he has edited and contributed to scores of books and writes a column for Fast Company magazine. His fee for speeches is $17,000. He also has a working relationship with Hewitt Associates to train coaches around the world.

    As for showing ROI, Goldsmith says he leaves it up to corporate officers to decide whether he’s worth it. "I let them make the business case. Is it worth the money I charge? If not, then I say, ‘Don’t hire me.’

    "Right now I have more business than I have time for," says Goldsmith, named by Forbes magazine as one of the nation’s five most-respected coaches. He currently is working with eight top executives--six CEOs, a COO and a CFO. His background includes earning a doctorate in organizational behavior in 1977 at UCLA.

    When he is hired, Goldsmith promises that if he doesn’t produce, his clients don’t have to pay. "We only get paid if people get better," he says. Asked what "better" is, he notes that he’s not the one to judge. He lets people who work with the executive client decide that. Goldsmith says he won’t work with anyone who is not committed to working with him. He also wants everything out in the open. He doesn’t do secretive one-on-one coaching.

    If the issue isn’t out in the open, it doesn’t benefit the company, and the executive can’t be a role model, he says. "If people don’t talk about what they are working on with co-workers, they aren’t going to get better anyway.

    "If an executive comes to me who is about to get fired, I don’t work with them," he adds. "I only deal with very successful people who want to get better." He likes to work with CEOs because the benefits cascade down through the organization.

    As with other coaches, he says many of the same problems come up over and over again. The inability to listen and the need to always be right are common. These and other problems usually come up in 360-degree assessments and interviews with the executive’s peers, higher-ups and employees who report to him.

    Goldsmith cites the case of an exceptionally bright executive. The man enjoyed immense success at a top university, where he was on the debate team.

    "When I got the feedback, it came out that he didn’t encourage open dialogue," Goldsmith says. "He said, ‘What do you mean? I love debate.’ I said, ‘Yes, but whenever an employee opens his mouth you step on them.’ His behavior was cutting off what he was trying to change."

The process
    Typically, Goldsmith works with a client for a year and a half. Other coaches say their work with clients might last from three months to a year. Time is always a factor. With CEOs and other corporate officers, sometimes the only access a coach can get to a client is a half-hour once a month or a couple of phone calls.

    Coaches frequently limit their sessions to one or two issues, such as building teamwork or learning that they don’t have to win every argument. Sometimes they administer pre-interview survey questions to other company leaders and subordinates such as, What single most important thing would you change if you could change the CEO?

    Privacy and trust are keys to getting a subordinate executive to comment on the boss because critical remarks could result in career suicide without protection.

    Finkelstein says many coaches believe that they must have the support of the executives they are coaching because it’s impossible to coach someone who isn’t open to the process.

    Ranker, a former business executive who’s on the Forbes list of top coaches with Goldsmith, says he will work with a less-than-enthusiastic executive; he takes clients as they come. That might be a positive relationship with a rising star or more difficult sessions with an executive in trouble.

    "Sometimes people are told they have to work with me because their behavior is causing problems," he says. "You make it very clear to the executive that they have no choice if they want to stay with the company. Greed and fear are important motivators."

Coaches agree that 360-degree surveys that tap into opinions about the executive are very helpful. Questions should focus on issues such as what do they do well, what needs improving and the kind of work climate the leader creates.

    These surveys often are followed up with written questionnaires and in-depth interviews. After all the information is assembled, it is given to the executive on the hot seat. Listening to criticism is a key part of the process. With no stake in the business and the ability to assure confidentiality, coaches are uniquely suited to intervene.

    Once they identify a problem, coaches say that an executive often is able to fix it quickly. One of Eddy’s corporate clients, for example, had been a highly successful leader in the restaurant business. He then moved to a top job at a major entertainment studio, where he was responsible for a much broader range of food and entertainment services as well as retail shops.

    The new job put him in a creative, non-hierarchical environment where people considered one another peers. The executive’s spit-and-polish style wasn’t working. Eddy says half the staff had a similar background and loved him, but the other half was in mutiny.

    Senior leaders wanted to keep him, but they were stuck about how to fix the problem. This is a perfect situation for a coach because the executive obviously has leadership and interpersonal skills, Eddy says.

Matter of trust
   
For those who wonder why a human resources professional can’t handle interpersonal problems internally or expect senior executives to take charge and mentor a leader who needs improvement, Brett Seamons, a consultant with the Chicago office of RHR International, says trust may be easier to establish with an outside coach.

    "Companies should turn in-house whenever possible," he says. But there are times when CEOs have a hard time getting honest answers or good feedback. Coaches will tell it to them straight. "Coaches don’t have any axes to grind, any skin to lose," Seamons says. "They are being paid to tell the truth."

    Eddy says that senior executives are stretched to the limit and don’t have the time to coach that they once did. "Now everything is moving too fast," she notes. "There is talent to coach internally, absolutely. But everyone is just so overloaded. With downsizing and advances in technology, people are doing the jobs that used to require two or three people."

    When a company must address issues in its executive ranks and the staff is overburdened, it isn’t surprising that leadership is tempted to reach outside the firm for help. There is a talented coach out there waiting in the wings, a person who can offer a vital new perspective. At least that’s the hope.

Workforce Management, February 2005, pp. 53-57 -- Subscribe Now!

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