Coaching Entrepreneurial Growth and Change

A great deal of attention has been paid to the role of entrepreneurial companies as engines of economic growth.  Studies have shown that most of the job growth in the US is from entrepreneurial companies.  Studies have also shown that most small entrepreneurial companies fail to grow beyond the original owner and a handful of employees.  In order for entrepreneurs to grow their company, they must be willing to change how they operate their businesses.  Change creates a challenge for most entrepreneurs because they tend to cling to the strategy that helped them launch their company.  Many of these entrepreneurs are happy to create a job for themselves or just maintain their lifestyle.  The following case illustrates how coaching can help a small, lifestyle business transform itself into a growth company. The case will include the obstacles, frustrations, and breakthroughs leading to change.

Growth and Change in an Entrepreneurial Company

Sean has been in a service business for 20 years.  After some early success, his sales have remained flat for the last several years.  During this time, he experienced a great deal of turnover in staff.  Morale was poor, with most employees believing that Sean was only interested in making money to support his affluent lifestyle.  Although the company has a good reputation with customers for its expertise and service, most of its success is due to the owner’s wearing multiple hats and filling in many roles. Sean’s major asset in addition to being an expert in his field is his ability to network with potential customers. He is an extrovert and very likeable.  He shows a strong interest in others, which opens up many client relationships. He has one key executive who handles a portfolio of customers.  The remainder of employees are assigned to customers for projects that the owner or key executive sold.

Sean has had a six-year coaching experience that initially helped him double his revenues.  Two issues still concerned him: he was afraid of losing his key executive who was responsible for about half of the company’s sales, and he was also frustrated with the turnover of staff that quit and went to work for customers or competitors, or opened their own business in competition with his company.  While his company was profitable, he realized his business was not sustainable beyond him and his key executive.  Without them, the company had limited financial value. 

The first challenge was to make sure his key executive was committed to staying with the company. Coaching sessions identified several options, and a deal for stock ownership and a strong bonus program were worked out.  It was hoped that the key executive would also become the COO and run the day-to-day company affairs.  This was not to be.  While very good at sales and client relationships, his key executive had little interest in assuming a company leadership role.

Poor morale and turnover continued. Coaching the owner to change his management style or bringing in a COO did not materialize as options.  This was one of those times when a coach needed to confront the coachee with the “brutal facts.” Either Sean makes major changes in his business or he would not be able to build any equity or sustainable growth. With Sean choosing to grow his company, his coach encouraged Sean to consider a consultant who would perform an organizational audit and help Sean restructure his company for growth.  After weeks of hesitation, Sean invited the consultant to conduct the audit and make recommendations for change.  His coach followed the consulting relationship closely, interacting with the consultant and Sean.  After several months, a plan was proposed, and Sean committed to it.  The plan called for reorganizing the company into three divisions, changing roles and responsibilities for employees, stronger communication and cooperation between employees, and greater accountability for everyone in the company.  The consultant was retained to help implement these changes. 

It is too early to tell whether Sean will stay committed to the recommended changes.  He will need to take a leadership role in implementing the changes.  He is highly motivated to change, and his coaching sessions help him to stay focused with the company transition.

Entrepreneurs are very good at starting a business but not always good at growing the business. Beyond the creativity and spurt of energy to launch a company, there is a barrier to growth.  As Marshall Goldsmith, a leader in executive coaching, has stated in the title of his recently published book, What Got You Here Won’t Get You There, a different set of skills is required to grow a company.  These skills include leadership, an accountability culture, continual monitoring of the organizational culture, systems and procedures, and, in many cases, a change in strategy and organizational design.  These are skills that entrepreneurs often lack, and outside help may be needed to create these changes.  Realizing this, a coach can facilitate growth and change by challenging the entrepreneur to decide on whether he or she is willing to change or be at risk of failing to survive beyond the entrepreneur’s ownership. Understanding this dilemma is paramount to how the coach can approach the entrepreneur and help with the changes needed for growth and sustainability of the company. This case also illustrates how the role of the coach differs from the role of a consultant.

 

 

 

Coaching Growth and Change

At its core, executive coaching is about growth and change.  Coaches are continuously challenging their coachees to change behavior in order to accomplish meaningful goals. Coachees who are able to engage in new behaviors are growing their skills and assets. The executive coaching process is evolutionary, and both parties must be prepared to deal with continual change for growth to occur.  It may sound like a cliché, but without change, there is no growth. And without growth, there is no change.

I decided to offer two cases to illustrate different approaches to growth and change. In this blog, I will present a case that deals with an employee promoted to a management position.  Being promoted posed several challenges for the coachee, which are discussed below.  In my next blog, I will present a second case that deals with an entrepreneur who had great difficulty in growing his company. His challenges were not only in changing himself but other team players as well.

The Challenges of Promotion

Mike was a successful employee in an asset recovery company. Recognizing his leadership potential, his CEO promoted him as head of operations. Mike was ambitious and accepted the promotion without full consideration of the challenges that were in store for him.

His first challenge was to develop his leadership style.  Most of his leadership experience came from role models he experienced at work, from coaches on teams he had played on in his youth and in high school, and from parenting, both as a son and his experience with his own children.  His style was controlling.  He led by directing people on what they needed to do. He explained in great detail how his employees were to accomplish goals.  He readily expressed his disappointment when goals were not met.  This led to many complaints about his leadership style.  He was particularly bothered when the complaints came from former friends who felt Mike was micromanaging and condescending.  Recognizing that Mike needed some help, his CEO hired a coach to work with him. 

It did not take long to uncover several major challenges affecting Mike’s leadership. He struggled with the transition from being a peer to one of being a “boss.”  He did not like the term boss, but he realized that this is how others perceived him in his new role.  Old friendships were strained, and Mike was grieving this loss. He knew he needed to change if he was to be effective in his new leadership role. He was highly motivated to earn the respect of the workers he was supervising. 

In coaching sessions, several models of leadership were discussed.  By examining his balance sheet, Mike was able to identify several assets that would help him forge an effective leadership style.  For example, using his approachability and achievement assets, he was able to focus on achieving stronger relationships.  At his monthly coaching sessions, Mike discussed his leadership experiences.  He analyzed these experiences, reflecting on the gap between his desired leadership approach and how he actually behaved.  It did not take long for Mike to have success both in his team’s productivity and in how others perceived his leadership.  Mike readily acknowledged these changes, which reinforced his new approach and reduced the tensions he had experienced.  His CEO also recognized Mike’s growth as a leader. He expanded Mike’s role by taking him on sales trips to meet customers and including him in top-level strategy meetings.  Mike is now, for all practical purposes, the COO of the company. 

Promotions often create challenges. Newly promoted executives are thrust into leadership roles that they have never experienced.  In Mike’s case, he needed to change peer relationships while coping with the loss of old friendships. Mike grieved these losses.  Coaching helped him manage the transition from a peer to a leader.  By processing his feelings, he soon realized that his own growth was tied to his ability to manage his feelings and to alter his leadership approach.  Mike strongly felt the tension of his failed attempts to lead. He embraced the need to change his leadership style. He became a better listener and showed appreciation for the effort and accomplishments of his employees. His old friends soon adjusted to his changed style that was both supportive and open to feedback.  Mike’s growth as a leader prepared him for a larger role in the company. 

 

 

Coaching Operational Excellence

In addition to coaching leadership and strategy, which were discussed in my previous two blogs, an executive coach needs to understand operations, or how organizations convert human, financial, and material resources into finished products and services. Operations include functional areas such as human resources, technology, manufacturing, and organizational design.

Human resources refers to the recruiting, hiring, training, and retention of the best employees. It also includes compensation, employee relations, and organizational development. Pretty much everything that has to do with people defines the role of human resource management.

A coach must also have an understanding of the technology of operations, including the processes used to produce products and services. While it is not be necessary for a coach to be an expert in technology, it helps to have familiarity with business systems, information technology, and different manufacturing technologies. He or she must also be familiar with product innovation, manufacturing and its support functions, quality control, and project management.

Understanding methodologies of operational efficiency will help coaches when dealing with the challenges of costs and on-time delivery of products and services. This knowledge is vital for the coach if she or he is to be able to help the coachee’s organization remain competitive and cost effective.

Finally, knowledge about the relationship between organizational design and organizational performance will help the coach to guide executives in developing the most effective ways of structuring their organizations. The following case demonstrates the role of an executive coach in helping a CEO to organize his company operations in pursuit of a competitive edge.

Case Study: Operational Effectiveness through Coaching

Mark is an engineer who took over a garage-based business from his father and turned it into a thriving manufacturing company with 270 employees and two state-of-the-art factories.  Marks major customers are manufacturers and suppliers of automotive vehicles.  His success was mostly from patented products that his company designed and developed in-house. Anticipating intense competition from China once his patents expired, Mark was concerned about his costs and his ability to retain business.  At the same time, customers wanted Marks company to constantly cut its costs, making it difficult to fund innovation and create the next generation of products.  Innovation also requires a special environment without the pressures of deadlines and production schedules.

 

Realizing his future lay in both innovation and cost efficiencies, Mark needed an organizational structure to solve the paradox between the needs for innovation and the efficiencies of low-cost manufacturing.  Many coaching sessions were spent exploring options about how to do this.  Facing this paradox head on, Mark, with guidance of his coach, came up with a brilliant plan: he created a task force that he called his Pioneer Team.  This group would have its own budget and report directly to Mark. He knew he had to protect their independence. Their major goal was to develop new products and improve existing ones.  He put his most innovative people on this team.  A second, smaller team was charged with taking the Pioneer Team designs and creating models and prototypes of its designs. They were also charged with testing these designs using rigorous quality and endurance standards.  The remaining operations people were charged with continuing to concentrate on low-cost manufacturing. Their role was to create efficiencies, cut waste, strip unnecessary costs from the operations, and make sure that deliveries met customer expectations. 

 

By separating these three functions, Marks company was able to focus on three different processes and protect each from the incompatibilities of the others.  He was able to produce low-cost products, test, and innovate. In most organizations, these goals get blended together, losing focus on the unique requirements of each and often failing to do any one of them well.  In Marks plant operation, his team was able to cut costs in manufacturing processes and materials without sacrificing quality.  They also vertically integrated their operation through building a new plant that enabled them to control supplier costs, quality, and on-time delivery. All this was accomplished through an organizational design that protected otherwise incompatible functions from interfering with each other.  Marks company continues to grow in the highly competitive marketplace of vehicle manufacturing. 

 

The role of coaching in Mark’s case was to help him appreciate how the relationship between organizational design and predictable outcomes affected his company’s ability to meet seemingly incompatible goals.  The coach’s understanding of organizational design and its effect on operations helped Mark to solve a problem that otherwise could have threatened his business.

Coaching Strategy

A major role for top executives is to be a strategic thinker. In order for a coach to properly add value to these executives, he or she must understand various levels of strategy, including how to identify and leverage personal and organizational assets, and create and sustain a competitive advantage. In other words, the coach needs to be a competent strategic thinker, paralleling what is expected from the executive being coached.

It is important for a coach to understand both the strategic side of business and the tactical, management side of business because any strategy is useless without the ability to execute it. While it is important for the coach to consider the coachee’s organization from both a high level and the ground level, it is also the coach’s responsibility to ensure that the executive remains focused on strategy while delegating specific activities to the appropriate parties who will be able to execute them. The case below illustrates how coaching can help a coachee to think strategically in growing his or her company.

Case Study:  Coaching Strategic Thinking

Peter is the consummate entrepreneurial executive.  Trained as an accountant, he began his early career at a top national accounting firm working in the health care industry.  After a few years, he was recruited by a hospital as its CEO, where he established a reputation as a very capable executive.  In his next position, he navigated a regional hospital through a highly political and turbulent environment.  During this time, he earned an MBA.  In all of his work experiences, Peter developed skills in networking, negotiating, and strategic thinking.  He saw the big picture in health care, and he knew where market niches existed and how to access them.  His networking ability allowed him to identify persons who could help him enter into relationships to support niche opportunities. These were Peters assets, but he also had liabilities.

One liability was his lack of attention to detail. So, when he took a position in a private for-profit health care company, he hired his former number-two person as COO of this company.  The COO was strong on detail and in running the operations of the company. By managing this liability, Peter was then able to focus on a strategy to guide and grow his company. His coach helped Peter to understand and leverage his assets. He had some initial success in leveraging his relationships to obtain new customers.  He also developed new products with existing customers who were looking for ways to differentiate themselves from competitors.  But Peter struggled to get traction with larger national customers who questioned his companys size and ability.  This frustrated Peter. He presented this challenge to his coach, and they discussed how to gain visibility and credibility with larger companies. Again, the power of asking probing questions led to a strategy that leveraged Peters assets. He had already formed a relationship with the CEO of a company that did business with larger customers. He approached this company with a proposal that they form a strategic alliance, with Peters company offering them products and services they did not currently have. A deal was struck and, over the next several months, Peters company was able to sign contracts with several larger companies.

Peter had another asset. He had a deep understanding of his industry and its players.  His coach encouraged Peter to identify niche opportunities for his company.  One of these opportunities had the potential of creating a major breakthrough in patient care.  He was able put a strategic plan together, raising the capital needed to launch the service on a national scale. His company had grown from a small, regional player to a much larger company with national customers.

The primary role of Peter’s coach was to keep him focused on his strategic objectives and how to achieve them. Understanding Peter’s balance sheet, his coach continually probed about opportunities, questioned how they fit his growth plans, and helped Peter become aware of how to leverage his assets in the pursuit of strategic opportunities.  This enabled his company to grow its markets and absorb this growth under the very capable executive in charge of operations.  The coach’s knowledge about strategy played an important role in helping Peter grow his company.

Coaching Leadership

In a previous blog, I made the case for why executive coaches need to understand business.  In the next several blogs, I will offer specific areas of business that executive coaches need to be skilled in.  Coaches also need to understand enough about these areas to ask appropriate questions that will guide executives toward action, and change when needed. I will start with leadership. 

Leadership involves the capacity for vision, team development, group dynamics, delegation, and the ability to develop, mentor, and motivate individuals and teams.  Executive coaches must have strong leadership skills because their primary job is to develop these skills in their coachees.  The following case will illustrate this point.

Leadership Case:  An Introvert Learns to Lead

Joe was the general manager of a large distribution division of a publicly held corporation.  He was not the stereotypical leader—bold, assertive, and decisive.  Instead, Joe was an introvert, quiet and slow at making decisions. He had many strengths, including strategic thinking, expert knowledge of distribution, trustworthiness, and responsibility.  Joe inherited a politically charged executive team when he arrived at his division.  His predecessor regularly played executives against each other and made separate deals with each of them.  Joe knew he needed to take action, but his leadership liabilities soon became apparent. He was not sure which way to turn. 

Much of Joe’s coaching was focused on identifying and managing his assets and liabilities. Once his balance sheet was established, Joe decided to rebuild his team with people who, first, were competent in their area of responsibility and, secondly, complemented his liabilities with their own strengths. For example, Joe’s HR director was so aligned with the previous GM that no one else on the executive team found him credible. Furthermore, the HR director was not doing the job Joe wanted him to do.

Because Joe had a hard time firing people, his coach helped him to set up a performance feedback program to use in addressing the deficiencies of his HR director.  This program clearly identified deliverables and deadlines. Anticipating that the HR director may not meet his performance goals, Joe’s coach helped him to craft a response by asking questions that dug deeper into the reasons for poor performance.  Joe asked his HR director, “What is keeping you from meeting your objectives?”  After several missed deadlines the director resigned, stating he felt unable to perform as expected. One by one, with the help of his coach, Joe built his own team, each time upgrading its skill level and strengths. Joe was able to use the balance sheet approach in evaluating his team members and coached them on how to leverage their own strengths while managing their liabilities. 

In this case, Joe was able to overcome his reluctance to fire a team member by benchmarking deliverables and setting a timetable for completion.  Not being able to meet these expectations, team members chose to resign rather than be fired.  Joe learned to ask good questions that made clear what constituted success and failure for his team members.  He was able to replace his dysfunctional team with highly functioning executives.

Joe’s division had tremendous success, much of it attributable to the skill he demonstrated in building his team. The team members turned out to be his disciples, cascading organizational goals down to the workers on the floor.  Joe learned that he could lead with a supportive team that complemented his leadership style. As a result of Joe’s success in his division, he was promoted to run worldwide distribution for his company at their home office. 

Every leader has a balance sheet of assets and liabilities.  The secret to effective leadership is not a stereotypical formula of leadership attributes but the ability to leverage assets while managing liabilities in pursuit of organizational goals.  Being an introvert does not disqualify a leader; it merely changes the way he or she leads. If coaches are to help executives to master the leadership process, they must first understand how the leadership process works.

 

 

 

 

 

On Becoming a Coach: Programs to Develop Coaching Skills

Okay, you have decided you want to be an executive coach. You have business experience, and you have the behavioral skills that are necessary for successful coaching. Where do you go to build your coaching skills?  I will briefly describe several ways to learn about executive coaching. These include academic institutions, coach certification programs, online programs, local coaching peer groups, reading, and executive peer advisory companies that train coaches/facilitators.

Academic Programs:  Very few academic programs exist that will prepare you for a career in coaching.  Only a scattering of MBA courses in executive coaching have been created and taught.  The problem in academia is that very few faculty members have the experience or skills to teach executive coaching. 

Coach Certification Programs: A few coach certification programs are taught in academic-like settings.  The College of Executive Coaching has an impressive roster of coaching faculty and offers a program of training and mentoring by a master coach. Another top-rated program is the Institute for Professional Excellence in Coaching, or iPEC.  Both The College of Executive Coaching and iPEC offer programs in several urban locations. The Fielding Institute, in Santa Barbara, California, offers courses that will prepare professionals for executive coaching.  There are certification programs like those offered by the International Coaching Federation that require many hours of supervised experience with a master coach in order to be accredited as a coach. Other institutes, like the Gestalt Institute, of Cleveland, Ohio, help coaching students adopt a holistic approach to working with coaching clients.  These programs profess to be rigorous, and they require many hours of training.  However, the verdict is still out on whether these programs truly prepare executive coaches who deeply understand the coaching process.

Online Programs:  As in so many other areas today, coaching certification programs and coaching associations are becoming increasingly internet-based.  While these types of online programs are probably emerging to meet the growing demand for the services of the coaching profession, many experienced coaches have serious doubts about the efficacy of these programs. A “one-size-fits-all” commodity approach to executive coaching is a recipe for disappointment.  An executive coaching certification program is an intensive, interpersonal developmental process requiring face-to-face mentoring from a master coach; it simply cannot be achieved over the internet.

Coaching Groups: One way to learn more about coaching is through interacting with other executive coaches.  In joining a coaching group, try to seek out coaches who really understand what coaching is all about.  Several years ago, I founded a group of executive coaches who met monthly and explored different approaches to coaching.  Some coaches went through Gestalt training; another worked on deep change techniques using brain research as the basis for her approach to coaching. Still others were graduates of academic programs that taught courses in leadership, communication, and change.  One was an experienced executive who was self-taught as a coach.  Being part of a professional network of colleagues who engage in effective coaching will enhance continued learning about the coaching process.

Reading: A great deal of knowledge about coaching can be acquired through reading.  Dozens of books and articles have been written about coaching.  However, the quality of these publications varies greatly.  I have a personal bias toward coaching books that are based on a change model. After all, change is what coaching is all about.  Readings that have change at their core are rare.  Here are a few recommended readings:  Leading Change, by John P. Kotter; Deep Change, by Robert E. Quinn; Grow Your Own Leaders: How to Identify, Develop and Retain Leadership Talent, by William C. Byham, Audrey Smith, and Matthew J. Paese; Profiles in Coaching, edited by Howard Morgan, Phil Harkens, and Marshall Goldsmith; and Leading with Soul, by Lee G. Bolman and Terrance E. Deal, which is a parable with an excellent example of a coach and a coachee as they experience the process of coaching.

Peer Advisory Programs:  Companies exist that train coaches in support of their mission to help their executive clients succeed. I have been associated with one such company for over 20 years.  Vistage International (formerly TEC) recruits former top executives with a high aptitude for coaching and behavioral professionals with significant business experience to be chairs.  Vistage trains its chairs to be group facilitators and executive coaches.  It creates groups of 12 to 18 non-competing business leaders to provide a forum for learning, group problem-solving, and individual coaching.  The chair/coach is responsible for executive education and facilitating group problem-solving sessions.  Between monthly group meetings,  chairs engage in a one-on-one coaching session with each of their members, keeping them focused on growing their companies and their leadership skills. 

Vistage training for chairs is very intense and utilizes many of the coaching methods discussed in my book and blogs.  Vistage has over 18,000 CEO members and over 800 chairs/coaches.  More can be learned about becoming a Vistage chair by visiting its website at www.vistage.com.

There is no clear pathway or program to becoming an executive coach.  A few programs offer extensive training in coaching. Others do not.  Many of the paths lack in-depth understanding of behavioral change or a comprehensive development of the skills needed to become an effective coach.  If you are serious about becoming an executive coach, seek a program designed around the change process and strong mentoring to help you develop your coaching skills. 

 

 

On Becoming a Coach: Three Behavioral Competencies

Originally posted on executivecoachingbook:

No consensus exists on which behavioral attributes are most important for executive coaching. However, there is little question that possession of certain behavioral attributes, when present, will enhance the effectiveness of coaching. I will comment on three attributes that I believe are critical for anyone thinking of becoming an executive coach. They are emotional intelligence, the ability to immerse oneself into another person’s situation, and intuitive thinking.

Much has been written in the last decade about Emotional Intelligence, often abbreviated as “EI.” The key components of EI related to coaching are self-awareness, self-control, and the ability to relate to others. Let me explain why these are important.

Self-examination is not limited to coachees. Every coach has a balance sheet of assets and liabilities. Awareness and understanding of one’s balance sheet allows the coach to manage the coaching relationship. Every coaching relationship is different, and the coach must be aware of…

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