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US News & World Report - Give Me a C-O-A-C-H!

Feb 16, 2004

Explore the rise of executive coaching and its impact on leadership transformation.

Explore the rise of executive coaching and its impact on leadership transformation.

MONEY & BUSINESS

Give Me a C-O-A-C-H!

By Marci McDonald Published: February 16, 2004


At strategy sessions, he hunkered in the back of the room, a shadowy presence taking notes. In the chief executive's office, he sat in on every meeting, whispering into the boss's ear. But as he whipped up an atmosphere of intimidation and mistrust at the company, some staffers demanded a background check on the outsider they thought was having such a disastrous Svengali effect on their CEO.

That inquiry revealed that the boss's self-styled executive coach had no relevant training or experience for his trendy job. Having rubbed shoulders with CEOs, he "thought he might like a career change," says Howard Guttman, whose New Jersey company sets up coaching programs for Fortune 500 firms. "You've got somebody who thinks, `Hey, I'm good with people,' and they hang out their shingle," Guttman says. "They can do real damage."


A GROWING INDUSTRY

Across the country, tales of wannabe corporate gurus dispensing psychobabble or cult-like techniques have tarnished one of the nation's hottest growth industries. Over the past five years, coaching has mushroomed from a sideline on the motivational and consulting circuits to an expected perk in virtually every executive suite.

One reason for the explosion is a series of public testimonials on the transformations that high-profile coaches have wrought. David Pottruck, president and CEO of Charles Schwab & Co., credits former IBM executive Terry Pearce with transforming him from a sharp-elbowed despot into a sensitive consensus-builder. Pfizer Chairman Henry McKinnell was so enthusiastic about the feedback he got from Boston coach Dan Ciampa that he posted his own performance review on the company's internal website.

Some coaches, like Dartmouth Professor Vijay Govindarajan, specialize in strategizing, while others, like Ciampa, focus on merging clashing corporate cultures. At a time when globalization makes delegation of authority essential and corporate governance scandals abound, both boards and shareholders are increasingly focused on leadership development.


WHY COACHING IS IN DEMAND

Most coaches are now called in to smooth a CEO's rough, my-way-or-the-highway edges that may be driving top talent to rivals. "Companies used to be able to function with autocratic bosses," says Rosabeth Moss Kanter of Harvard Business School. "We don't live in that world anymore."

The qualities that may have propelled hard-chargers up the corporate ladder often make them unfit to lead, including an unwillingness to tolerate dissent or a propensity for tantrums. "Screaming and throwing things can be fixed," says Marshall Goldsmith, an exuberant, Zen-spouting Ph.D. whose CEO makeovers were profiled in The New Yorker in 2002. "Any behavior can change—unless there's a defective gene."


COACHING: AN EVOLVING PROFESSION

So great is the demand for coaching that leading consulting and outplacement firms have begun to offer coaching services, and some multinationals are creating in-house coaching teams. Next month, pharmaceutical giant AstraZeneca will begin training 55 human resource staffers to work one-on-one with middle management. "It's a way of building our leadership bench strength," says Janet Steinwedel, the company's director of leadership coaching.

A coach, however, doesn't come cheap. Fees can range from $250 an hour to $17,000 a day. Such potentially enormous profits have spawned hundreds of online coaching schools with lively titles like GottaGettaCoach.com, offering certifications for prices ranging from $29.95 to $1,795 a course.


CHALLENGES AND SKEPTICISM

The proliferation of coaches has bred skepticism about a profession that is unregulated and lacks an oversight body or widely accepted credentials. "It's kind of like the Wild West," says Gisele Garcia, a coach who has organized a seminar for the Conference Board in New York on drafting hiring criteria.

Some coaches have joined together to set voluntary standards. Only 1,100 of the International Coach Federation's 7,000 members have qualified for ICF certification. The Association of Career Professionals International has certified only 500 of its 2,000 members.

To address concerns, some corporations create pools of approved coaches for executives to choose from, while others advise checking degree claims and references. Clients are encouraged to demand a code of ethics that guarantees confidentiality and ensures coaches do not overstep their limits. "If a coach sees someone is deeply depressed," says Toronto-based coach Dorothy Greenaway, "he or she has a professional obligation to say, `I'm not qualified to deal with this. Go see a doctor.'"


AVOIDING PITFALLS

While most coaches insist on keeping client revelations confidential, some boards and CEOs argue they have a right to know what key officers disclose. As a result, more executives are paying for coaching out of their own pockets.

Ciampa notes that vague expectations often lead to failure. He advises clients to set benchmarks for progress and to choose a coach with expertise in their desired area of growth. Goldsmith himself refuses to address issues such as career planning or organization, hiring colleagues for these tasks.

"One of the biggest problems is not enough coaches turn down business," Goldsmith says. Even in his niche—transforming CEO behavior—Goldsmith refuses clients with integrity issues. "People with integrity problems should not be coached," he says. "They should be fired."


Published in US News & World Report, February 16, 2004

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