By Michael F. Carmichael
September 3, 2009
The field of business coaching is growing, even now. Or, particularly now.
A 2006 study by PriceWaterhouseCoopers found 30,000 business coaches worldwide, adding up to a $1.5 billion industry. The International Coaching Federation alone claims to have 14,000 members globally. Many of the top business executives in the country rely on them.
What is a Business Coach? Why Would You Need One?
One reason comes from Rich Horwath, a business coach, Professor of Management at Lake Forest Graduate School of Management, just outside Chicago, President and CEO of Strategic Thinking Institute and author of Deep Dive: The Proven Method for Building Strategy, Focusing Your Resources, and Taking Smart Action. “Almost every company, no matter what its size, has a ‘strategy meeting’ once a year,” Horwath says. “What happens is, during the other eleven-and-a-half months of the year they’re spending time tactically and operationally, but they’re not thinking strategically. They’re not able to pick up changes in the marketplace - with their competitors, and with their customers and what they value. When they miss those changes they fall behind their competition and in today’s economy that can mean they’re out of business.”
How do You Find an Effective Coach?
How does a company - or a member of the leadership team - find an effective business coach? “First of all,” Horwath says, “you have to decide what you want to have - someone to bounce ideas off of, someone to come in and work more closely with your leadership team and perhaps educate them so they’re all on the same page. Write down what skillsets and knowledge base you expect in your coach. Talk to friends, colleagues. Use your social networking tools like LinkedIn where you can post specific questions to the groups or organizations to which you belong. Don’t just Google ‘business coach’ and see what pops up.”
Because the profession of business coaching is relatively new, a company might want to check out the Web sites of the International Coaching Federation or the Worldwide Association of Coaches. Both are trying to establish standards for the profession that will lead to certification,
‘An Angel on Your Shoulder’
Having a business coach, suggests Horwath, is a little like having an angel on your shoulder. “They will remind you,” he says, “that strategy in not a one-time thing. You need to be constantly monitoring all aspects of your business from a strategic standpoint. The business coach provides that second internal monolog that reminds us ‘here are some key things to be thinking about.’ A good business coach acts as a sounding board. They can give fair, objective, non-political solutions or opinions without having internal ramifications within the organization.”
Coaching, particularly strategic coaching, is something that all businesses should buy into, no matter what their size, according to Horwath. “Strategy is something that needs to be communicated to all levels of the organization, not just at the senior management level. A good strategic coach can help senior management make that happen.”
Advice for GM: Change the Culture
Asked what he would have done had he been the strategic business coach for former General Motors chairman Rick Wagoner, Horwath replied that “Wagoner was a good leader and I’m not sure that the strategy at his level was flawed. The challenge was getting people at the middle level and lower to understand and accept the changes that needed to be made. Because of a long history at the company it was hard to get change to take hold culturally.”
The culture of a company can often be the reason management, particularly new management, will seek the counsel of a business coach - or coaches. “When a company has been successful over a number of years,” explains Horwath, “there’s a natural tendency for it to become complacent. The challenge is for it to be aware that its competitors are evolving, its market is changing and that it has to be changing at a more rapid rate. Convincing its people that they’re on a ‘burning platform,’ that there’s a sense of urgency to why they need to change some of the things they do or the ways they think is a huge challenge.
“Great leaders,” Horwath continues, “are able to create that sense of urgency, even before there’s a crisis, in order to stay ahead of the pack.”
Certainly, to return to the General Motors example, GM seems to have recognized the need to change the way they think at all levels. They recently introduced a “new” crossover vehicle to the media and selected members of the public - and then slightly more than a week later announced that they wouldn’t be building it after all. Reaction both from members of the automotive media and the public was that GM had introduced a “rebadged” version of another GM vehicle - something the “old” GM would have done.
“The challenge many executives face,” say Horwath, “is that they have a lot of good ideas coming at them and they have to be able to say ‘no’ to potentially good ideas so that they can focus the company’s resources on the key products or services that are going to drive (in GM’s case) the success of the business. That means taking risks as a leader.”
Horwath explains that “sins of commission - where we do something and fail - are judged much more harshly than sins of omission - where we just sit back and do nothing and don’t take advantage of an opportunity that could be very beneficial and it just goes by the wayside.”
The other side of that coin is those who take great risks that are not necessarily good for the long-term health of their company, but they do it for short-term potential personal gain. Horwath responds, “Lehman Brothers, for example, had more than 80 percent of their assets invested in corporate bonds and high risk securities. They were taking risks that were not good for the organization as a whole, but for individual greed.” Could a good strategic business coach have prevented that? “When you look at the definition of strategy,” Horwath says, “it’s the intelligent application of a company’s limited resources. Most people would say that the Lehman portfolio was not the way to go.”
Providing Customer Value is Critical
What is something else that business coaches find that corporate leaders are neglecting? “Focusing on customer value,” says Horwath. “They can get so caught up in the day-to-day operations and capturing intelligence on the competition that they lose sight of the basics - the true end goal of any business - serving customers. If they keep concentrating on the value they provide, what potential unmet needs a customer may have - both in talking to them and observing them - then they’ll be able to stay ahead of the curve.”
Does Size Matter?
Are business coaches, particularly strategic business coaches, only for large organizations? “On the contrary,” Horwath counters. “Small businesses have fewer resources - time, talent and budget - so they have to be even smarter in how they’re allocated. It gets back to goal setting. When those are established and everyone buys into them, it’s a relatively simple process to allocate the necessary resources to get the company there. The cautionary aspect that a business coach can help remind the leadership team, is being successful as a start-up doesn’t guarantee success in the long run. The goals, the long-term plan, needs to be written down and then communicated to the rest of the organization so that they have a clear understanding. That raises confidence in the organization and in the leadership.”
In today’s economy, with the marketplace changing daily if not hourly, what advice would a business coach provide to a client on how to cope? “There are a lot of companies and leaders who are like bumper cars,” explains Horwath with a smile. “Anything that comes in - a customer complaint, a competitor activity - boom! off they go in a different direction. If they haven’t set a clear course they can be swept aside and not even know it.”
Horwath cautioned that companies must seek to define the differentiation of their core offerings. “What is unique about them, and the value they offer. Once they define that, it’s what is going to make potential clients’ heads turn. Saying you’re better than the competition is subjective to a potential client. Saying you’re different from the competition and then spelling out those differences gives your prospective client the criteria on which to make a decision (hopefully in your favor). Getting past ‘better’ to ‘unique’ is really what customers or clients really want to hear.”
A Final Word
The signs of a potential recovery are beginning to show. How can a company prepare today for tomorrow? How would Horwath advise his clients? “New growth comes from new thinking,” he responds. “If you’re planning for your business to grow in new and exciting ways and you don’t have new ways to think about your business, new tools to help it grow, it’s like a farmer expecting new crops to grow before any seeds are planted. That’s using hope as a strategy. It may have gotten someone elected but it doesn’t work in business.”