In today’s dynamic business landscape, the imperative for strong leadership is undeniable. A 2022 report from McKinsey and Company found that organizations performing in the top 25% of leadership have almost 2x the financial performance of others. From top-level executives to front-line managers, effective leaders set the strategic vision, cultivate a high-performing culture, and empower their teams to achieve ambitious goals.
However, navigating an increasingly complex world of constant disruption presents unique challenges for even the most seasoned leaders. Research from U.K.-based consulting firm Changefirst found that 76% of executives report feeling overwhelmed by the pace of change. Confronting continuous change and uncertainty can shake leaders’ confidence and hinder their ability to make decisions and lead their teams effectively.
Leadership coaching offers a powerful solution. Coaches provide guidance and support as leaders develop new skills and strategies and navigate challenges. Furthermore, a leadership coach provides motivation and accountability that helps leaders shift their mindset to overcome barriers and seize opportunities.
The business case for leadership coaching
In the past decade, an increasing number of organizations have turned to professional coaching to enhance the performance and development of their leaders. In fact, more than 1 in 3 Fortune 500 companies have adopted coaching as a standard component of leadership development among top executives and high-performing employees. Why?
Leaders at every level can benefit from the guidance, support, and feedback offered through a structured coaching program. Even seasoned leaders benefit from having an experienced, confidential advisor in their corner when navigating business challenges. When leaders have the support they need to operate effectively, the whole organization wins.
Research demonstrates a strong correlation between leadership coaching and improved business performance. According to the Institute of Coaching, over 70% of leaders who receive coaching saw improved work performance, relationships and improved communication. The same study found that nearly 9 in 10 companies reported that their investment had a positive return on investment (ROI).
The business case for leadership coaching is compelling. According to research conducted by the International Coaching Federation, leadership coaching results in a 70% increase in individual performance, a 48% increase in team performance, and a 50% increase in organizational performance.
Some of the ways that coaching improves performance at the individual, team, and organizational levels include:
- Enhancing leadership effectiveness: Coaches help leaders identify strengths, weaknesses, and development areas, enabling them to become more confident, decisive, and influential
- Improving employee retention: Strong leadership fosters a positive work environment, leading to higher employee morale, satisfaction, and loyalty
- Increasing productivity and performance: Effective leaders drive results by setting clear goals, empowering teams, and creating a culture of high performance
- Accelerating talent development: Coaching can be used to identify and develop high-potential leaders, ensuring a robust leadership pipeline
- Strengthening organizational culture: Leaders play a critical role in shaping organizational culture; coaching helps leaders align their behavior to a desired culture
When deployed strategically, leadership coaching is one of the most powerful, highest ROI tools in the L&D toolkit. However, deciding when, how, and with whom to deploy coaching can be a challenge. In the next chapter, we’ll explore some of the key indicators that your leadership development strategy should include coaching.
Do my leaders need coaching? Identifying the key indicators
Before designing a coaching program, it is important to understand why coaching is a worthwhile investment for you and your stakeholders. This requires identifying and analyzing key indicators at the individual and organizational levels to determine how your organization will benefit from coaching.
Organizational performance
Leadership has an outsized influence on organizational performance and culture. By analyzing your organization’s financial and human resources reports, customer insights, and employee engagement surveys, you can identify key indicators that build a picture of your organization’s health:
- Is the company consistently failing to hit revenue and growth targets?
- Has there been a downturn in reported customer satisfaction?
- Is the organization experiencing higher-than-usual employee turnover?
- Is employee engagement trending downward?
- Do employees have a limited understanding of organizational objectives and how their role contributes to achieving them?
These can all be indicators of strategic misalignment that harms the organization’s short-term success and long-term viability. They also indicate that leaders may benefit from coaching.
Individual performance
At the individual leader level, changes in a leader’s performance can indicate that coaching could be beneficial. You might look for:
- A decrease in the leader’s productivity
- A trend in the leader failing to meet stated goals
- The leader demonstrating poor morale or engagement
- Negative dynamics on the leader’s team, including poor collaboration or conflict among team members or with cross-functional colleagues
Coaching can re-engage leaders experiencing burnout and shift their mindset to overcome the barriers that cause frustration and harm their performance.
Individual behavior
High performers are not always natural leaders; it takes specific behaviors and attributes for leaders to effectively engage and motivate their team members. Some behavioral indicators that a leader could benefit from coaching include:
- Lack of self awareness
- Resistance to change
- Difficulty navigating interpersonal relationships
- Struggling to communicate with teams members and stakeholders
With the intervention of a coach, high-performing employees can develop the behaviors, mindset, and attitudes that transform them into high-potential leaders.
Do any of these indicators ring true for your organization or leaders? Learn how ExecOnline’s integrated learning and coaching solutions accelerate leaders’ ability to drive business impact and foster organizational culture.