The Rise of Executive Coaching Executive coaching as an industry is about 25 years old. Originated in San Francisco, California around 1985, executive coach has grown into a US$2.5-billion business with 40% annual growth globally (based on Fortune and Economist estimates). In China, executive coaching is still a leadership development methodology mainly reserved for multinational companies, as most Chinese companies have difficulty differentiating it between training, mentoring or even consulting. As this attitude shifts, however, the market potential is unbelievably huge – for an understandable reason.

Executive coaching has become a powerful force in the corporate world because it’s effective.. It produces results that no other development tools can desire. Figures have put the average ROI of executive coaching is 6 times the investment and in some cases, the return on investment is many times more. If a Fortune 500 Company’s CEO has managed to avoid a mistake in his business strategy thanks to the help of an experienced external executive coach, the saving could be millions of dollars, euro, yen or yuan.

Many business people in China still can’t figure out the “magic” mechanism of coaching. They avoid coaching NOT because they have already had a good understanding of the methodology – how it works, how the top-line and bottom-line of the business are impacted, how the paradigms, behaviors, culture and environment are transformed and how change is sustained - but because they know little about what coaching can do.

To be brief, executive coaching is all about paradigm shifts and behavior change. Oftentimes, performance increases NOT because the coachee have mastered new knowledge or skills, but because they are more open to others’ feedback and are therefore more willing to adopt new leadership behaviors. All change begins with keen self-awareness and a strong desire for improvement, and coaching does a perfect job in installing this self-awareness and an internal want of excellence.

The foundation for executive coaching is the same as the foundation for the coaching used in sports and performance arts – as human beings we all have the abundant potential to be better that we are today. The belief in our own untapped potential and a willingness to exploit that potential will automatically work to help us improve, and if we keep exploiting that potential, we will form a habit of excellence. Coaching is powerful because it helps people realize that they can choose to be better, be more effective and successful with the help of discovered and reinforced self-awareness.

“Coaching is powerful because it helps people realize that they can choose to be better”

Coaching and Corporate Performance

Our experience has been that coaching works better for those companies and non-business organizations with an open culture, and a culture built on high-performance. As long as performance is on top of the corporate agenda, coaching will help produce the desired leadership behaviors and consequent business results. The question for the HR department is “is your organization performance-driven? Are you really focused on performance? Do you set aggressive targets for your business in China? Do you believe a performance culture is the answer to the sustainable performance?” If the answers are all ‘yes’, then coaching should be in your strategy.

Let me explain my rationale. If maintaining high-performance culture and achieving all your performance objectives is your goal, then you’ll need leaders, managers and employees who are fully engaged in their work. You’ll need an environment where individuals and teams trust each other and collaborate, you’ll need a shared vision and passion for what’s possible in spite of what has been achieved. It may sound too much, but every senior corporate executive has this vision of an ideal workplace where people, strategies and execution are aligned.

But how do you make these happen in this real and fast-changing world full of challenges?

My answer is you’ll need to have your leaders and managers face reality and be extremely effective in leading their teams from strategy to results. In doing so, you’ll need leaders and managers on top of their true potential and maximized performance. In attaining the highest performance which is always demanded in business world, most leaders and managers need sounding boards and mirrors in helping them see their strengths and weaknesses and be inspired to improve and this is what exactly coaching is. Executive coaching is a highly individualized form of leadership development and support available because it is based on the understanding that in order to be maximally effective, executives must articulate their strengths and aspirations, examine the impact of their behaviors on others, and intentionally reflect on and align with their values, goals, and visions.

Coaching for Behavior Change

According to Marshall Goldsmith, one of the most successful executive coaches who has coached more than 80 Fortune 500 CEOs, the higher the positions the executives hold, the more behavioral are their problems. Our business experience tells us, this is very true.

Let’s take a Greater China Sales & Marketing VP in a medium-sized American company for example. He has been with the company for 15 years, is responsible for a US$40-million business and has about 40 people under him. In spite of the importance of his position, he is hated and isolated by his direct reports. In fact, in many ways, he is a classic story of disastrous leadership, because:

-He never listens and will stop his subordinates whenever they try to express themselves.

- He is critical and rarely praises his team. If he asks a manager into his office, it’s always about what you have done badly.

- He makes decisions for his direct reports without consulting them before hand.

- When people in his department leave the company, his mantra is “Let him go” and he’ll say that in front of the rest of team. He takes it for granted that it’s natural that people will change job after 2-3 years.

- He shows no compassion. When he says he’ll join his team at 1:30 PM at the company’s trade show booth, he showed up at 4:00 PM without letting them know before hand.

- He rarely gives feedback to his direct reports for the latter’s development. People development is never on his agenda partly because he never bothers to develop himself.

- He shows little interest in his staff’s personal life. He has no idea where his direct reports live, how old are their kids, what hobbies do they have and so on. He has little involvement with his direct reports besides work.

- In most organizations, 70% of employees quit their jobs because of their bosses; in this particular case, almost all the people leave the company because of this department head with high IQ but extremely low EQ.

“In spite of the importance of his position, he is hated and isolated by his direct reports.”

As you can see, all these problems are behavioral in nature and no doubt to say, all these problems will translates into low engagement, low retention and little development. These leadership behaviors are the liabilities for the company. CEOs can’t afford not to see these problems if they want to stay competitive in the game.

Ok, so let’s take a break and now talk about the other common leadership behaviors that undermine the competitiveness of organizations:

- Leaders who are strong and capable performers themselves but no one who works for them will be developed and no one enjoys working with them.

- Leaders who are silos who lead more by e-mail or meetings than by face-to-face communication, problem-solving workouts, personal interactions and networking.

- Leaders who are nice, but not assertive, unable to make tough calls in a challenging business environment.

- Leaders who are perfectionists, who are never satisfied by the work of their staff. They end up being very busy all the time by themselves and losing talented people one by one.

- Leaders who have super egos and are terribly ignorant of how they are perceived by their bosses, peers and staff.

- Leaders who refuse to express regret unable to take responsibility for their actions.

- Leaders who blame everyone but themselves.

- Leaders who start every comment with “No,” “But,” or “However.”

- Leaders who like to tell the world how smart they are.

- Leaders who are good at numbers but bad at leading and motivating missing the point what leadership should be in the first place.

It’s no exaggeration to say in every organization there are leaders with the above-mentioned leadership patterns. As Ram Charan, a leadership consultant, beautifully wraps up, “It’s rarely for lack of smarts or vision. Most unsuccessful CEOs stumble because of one simple, fatal shortcoming.”

The question is, do CEOs recognize the fact that these bad leadership behaviors will inevitably cause huge losses for the company? If the answer is ‘yes’, what should the CEOs do about these behaviors?

I often wonder how the CEOs address these behaviour problems in their organizations no matter what industry they are in and what size. Can training help? Or MBA / EMBA / EDP programs? Or assessments? Or different job assignments? Or firing and rehiring?

In my personal point of view, nothing is as effective as executive coaching in addressing behaviour change in senior leaders. In the past 10-15 years, executive coaching has consistently been employed as a highly effective tool in fast tracking leadership development. About 80% of Fortune 500 companies and FTSE 1000 companies today use executive coaching extensively in an effort to stay edgecutting.

Having said that, we also realize that coaching is still new in China, especially for the Chinese companies. There is still a lot of work to