Is Executive Coaching Really Worth it?
Is there anything more unsettling than making huge decisions alone? Thankfully, it's been a while since I've tried. But in the past, I've made my share. I can tell firsthand that having a coach has many benefits beyond better decision-making. Leaders constantly navigate competing priorities. Boards, direct reports, customers, and of course, family and friends all have their unique needs. Leaders must be able to carefully explore and assess new ideas to thrive in an increasingly complex workplace. Executive coaching is a thought-provoking and creative partnership that inspires leaders to maximize their potential. Before you start exploring whether the costs are worth the benefits. The first question you need to wrestle with is if you are entirely ready. Like any development, you will get the most significant return when you can do the work. Here is what you can expect it to cost, five frequent benefits, and what to look for in an executive coach.
What executive coaching is and is not?
Coaching is not counseling, mentoring, or consulting. Counseling deals with past or current trauma, mental health, and symptoms to restore emotional wellness. Executive coaching focuses on the future and not the client's history.
Unlike a coach, a mentor sets the agenda for their client using their experiences to guide the relationship. While that approach can be helpful in reality, we are all created with different strengths and backgrounds. A coach draws out the executive's desire and works to co-create options to achieve the executive's goals with individual and organizational benefits.
Consulting involves partnering but differs from coaching by collaborating on the development of comprehensive strategies and tools. A consultant provides answers, and a coach uses questions to help you find the answers to your questions.
An executive is a person with senior managerial and leadership responsibility in a business or organization. Executives are the owner, CEO, or Senior Leadership Team at a midsize company. These are generally categorized by revenue between $10 million to $1 billion and 50-250 employees. They can also be a Director or VP or on the Senior Leadership Team at a large organization.
The International Coaching Federation (ICF) defines coaching as partnering with clients in a thought-provoking and creative process that inspires them to maximize their personal and professional potential. The method of coaching often unlocks previously untapped sources of imagination, productivity, and leadership.
Executive coaching, then, is a coaching relationship between a coach and a person with senior managerial and leadership responsibility in a business or organization.
Why do executives and business owners need coaching now more than ever?
Today's reality for a senior leader is that the marketplace changes rapidly. You are either ripe and rotting or green and growing. So, how can an executive effectively stay green and grow in such a fast-paced environment?
In an extensive quantitative study by Stanley Black & Decker, the Sasha Corporation found that executives receiving coaching increased goal performance by 15% compared to executives not receiving coaching.
In a literature review of 81 executive coaching studies, researchers found that executive coaching positively impacts the leader and the organization. These benefits range from becoming more confident to contributing more effectively to empowering employees and improving employee retention.
Some of the most admired companies in the Fortune 100 contribute to the $1 billion executive coaching industry. Coaching is a fast-growing sector, and the broad support for executive coaching as a solution to today's challenges and its effectiveness is undeniable.
Evidence suggests executive coaching leads to individual and organizational benefits, including:
Enhanced self-awareness
Improved performance
Better communication
Stress management
Conflict resolution
Decision making
Career advancement
“It is not in the pursuit of happiness that we find fulfillment, it is in the happiness of pursuit.” — Denis Waitley
What do you get from executive coaching?
Outcome 1. Resilience
Resilience is a fundamental outcome of executive coaching. Frequently, leaders look for a coach to help adapt their leadership style, deal effectively with change, or build high-quality, trust-based relationships. As executives work to achieve their goals, barriers, and challenges must be overcome. In the process of overcoming these barriers, leaders build resilience and self-confidence.
Outcome 2. Shifting Assumptions and Perceptions
Mergers and acquisitions (M&A) are key growth strategies for many organizations: entering new marketplaces, acquiring new technologies, and leveraging scale and size. Culture is critical during notable changes, such as M&A, and executive leaders increasingly work with and lead multicultural teams. Coaching helps leaders shift assumptions and perceptions and adopt positive cross-cultural motivation, vision, and cultural agility.
Outcome 3. Improved Emotional Intelligence (EQ)
A recent Harvard study revealed that a leader's emotional intelligence (EQ) matters more than their mental ability (IQ). A key outcome of executive coaching is improved emotional intelligence. Often, leaders pressed for time to move from one urgent task to another and miss the advantage of pausing to reflect and become self-aware. An executive coach's use of assessments like a 360-leadership survey and purposeful reflection helps leaders learn and enhance their emotional intelligence. Reflection improves performance.
Outcome 4. Growth Focus and Accountability
Any road will get you where you want to go if you don't know where you are going. Setting direction is vital to growth as a leader. An executive coach ensures development goals are purposeful and bring perspective to the best areas to focus. Leaders are busy and without accountability, miss opportunities for learning and growth. In the executive coaching relationship, external accountability is a crucial benefit. A coach can help the leader prioritize critical topics to change in the best direction.
Outcome 5. Developmental Feedback
Executive leaders receive feedback continuously from a wide range of sources on potential areas of development but also can struggle to make sense of the feedback. Proximity to a problem sometimes impacts the leader's clarity on importance. Also, general feedback is often not presented in effective or constructive ways. A coach assists the leader with filtering through various points of critical feedback to return focus on the essential constructive aspects.
How much does executive coaching cost?
Executive coaching costs and pricing strategies vary widely based on the services offered, the executive coach's experience level, and the client's organizational level. Executive coaches commonly use hourly, value-based, retainer, or productized pricing.
Studies by the Harvard Business Review and The Conference Board suggested executive coach rates range from $200 to over $3500 per hour. Some coaches, like Marshall Goldsmith, who is frequently listed as the top-rated executive coach, use a performance-based pricing model. Simply stated, he only gets paid when his clients improve. Ready for the mic drop? He gets $250,000 per client for a year-long engagement.
Recently, virtual coaching has become more popular, and offers added convenience, service, and affordability through reduced travel and costs from associated time out of the office. Although these benefits are advantageous, the research does not support replacing face-to-face coaching with virtual coaching. In reality, in-person and virtual coaching both have associated pros and cons.
What to look for in an executive coach?
A good executive coach is trained and qualified. The International Coaching Federation (ICF) is a globally recognized association with evidence-based competency and code of ethics certification requirements. The ICF identifies the following eight core coach competencies updated as of 2019 based on empirical data collected over two years and from job analyses of 1,300 coaches globally:
Demonstrates Ethical Practice
Embodies a Coaching Mindset
Establishes and Maintains Agreements
Cultivates Trust and Safety
Maintains Presence
Listens Actively
Evokes Awareness
Facilitates Client Growth
In addition to the list of coach qualifications, evidence suggests the following additional traits and competencies specific to executive coaching:
Self-confidence
Assertiveness
Goal Orientation
Continuous Learning & Development
Integrity
Business acumen
Psychological knowledge
Organizational knowledge
An excellent executive coach usually refrains from giving advice or sharing personal stories. Instead, the coach asks powerful questions to help the executive clarify their problems in achieving their goals.
Conclusion: Is Executive Coaching Really Worth It?
The confidence and growth that comes from a creative thought partnership in the executive coaching relationship can't be beaten. Now more than ever, due to the complexity placed on senior leadership roles, executives need coaches who can support their continuous development.
Falling behind in a rapidly changing marketplace will not lead to success. The coach-leader relationship fosters a leader's growth through purposeful direction, reflection, feedback, and accountability.
See how our goal-oriented executive coaching turns your aspirations into your future.
Accelerate your career - Coaching keeps you feeling challenged and increases your blind spot awareness.
Live life to the fullest - Coaching facilitates experimentation and self-discovery.
Shift your mindset - Coaching helps you challenge your assumptions and views.
References:
Ahrend, G., Diamond, F., & Webber, P. G. (2010). Virtual coaching: Using technology to boost performance. Chief Learning Officer, 9,44–47.
Athanasopoulou, A., & Dopson, S. (2015). Developing leaders: By executive coaching. Oxford Press.
Athanasopoulou, A., & Dopson, S. (2018). A systematic review of executive coaching outcomes: Is it the journey or the destination that matters most? The Leadership Quarterly. 29(1), 70-88.
Berglas, S. (2002). The very real dangers of executive coaching. Harvard Business Review, 80(6), 86-153.
Clark, D., Cohn, A., & Goldsmith, M. (2019). A short guide to pricing your services as a consultant or coach. Harvard Business Review.
Doolittle, J. (2023). Life-Changing Leadership Habits: 10 Proven Principles That Will Elevate People, Profit and Purpose. Organizational Talent Consulting.
ICF. (2020). 2020 ICF global coaching study: Executive summary. International Coaching Federation.
