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The CEO Coach Conundrum

Coaching can elevate your game or get in the way. Here’s how to make it work for you.

Irene M. Dorner traces her current assignment as CEO of HSBC Bank USA, to a challenge posed by an executive coach she was, at first, reluctant to engage. "Where do you want your next career move to take you?" her coach asked. Dorner, who began her career with HSBC in 1982 and was responsible for a portion of its U.K. business at the time,was initially puzzled by the question. She replied, "I suppose wherever the bank needs me most." The coach pushed back, saying, "What makes you assume that if you do a great job, the bank will notice you, read your mind and reward you with the opportunity you most want?"

"This was an eye-opening attitude I had never considered," she recalls. In turn, Dorner asked herself: What if my assumptions were wrong? "I had to take personal responsibility formy career," she says. Based on the coaching she received, Dorner talked to HSBC's global CEO. "You have made a big investment in me," she said. "What HSBC should be doing now is optimizing that investment. This is what I want to do and this is what I don't want to do."

The result? Shortly thereafter she was asked to be CEO of HSBC Bank Malaysia. After two years, the company asked about her preferences for her next role. Early this year, Dorner moved to New York City to lead the U.S. banking arm of HSBC Holdings, one of the world's largest financial services organizations. "I can connect the dots between the coaching and my present position," Dorner says.

Getting an Edge

Are there any pressures greater, challenges as complex and visibility so isolating as those that come with the CEO position? "It's lonely at the top," is not just a saying; it's true.Who can a CEO talk with who doesn't have a stake in the outcome of the conversation? Certainly not subordinates. Board members can be helpful, but most CEOs shy away from talking to the board about their deepest uncertainties. Other CEOs can lend a helping ear, but there are barriers to complete honesty and trust. Because of these limitations and with the unique developmental needs of chief executives, CEO coaching has emerged as a cottage industry.

According to a 2008 survey of 656 companies by Right Management, a division of the employment service company Manpower, 35 percent of large organizations routinely make coaches available to their CEOs. Although there is much anecdotal information about the benefits of executive coaching at the individual level, no one really knows the benefits executive coaching bring or, indeed, if results can bemeasured at all.Despite the rave reviews, there is room for skepticism. Nearly everything known about coaching is self-reported by individuals with an incentive to praise its benefits. And even if we accept that coaching often benefits CEOs and sometimes even their organizations, to manage coaching as an effective corporate resource is another matter.

What is CEO Coaching?
What exactly is coaching and how does it differ from training, consulting, mentoring, and counseling? Here's a working definition of CEO coaching followed by a quick way to distinguish the various approaches to development.

Definition: Coaching helps you meet your leadership goals, not by telling you what to do, but by asking increasingly pointed questions that help you target important goals, defining the activities that promote or detract from those goals, committing to doing more of the former and fewer of the latter, and holding you accountable for following through on the commitments.

Training involves imparting specific skills. The trainer determines what skills are needed. To the extent skills are transferred in a coaching relationship, the CEO determines what skills are needed. Coaching is about drawing out the internal wisdom of the client.

Consulting has more of a recommendation, prescriptive, or advising quality than coaching. At the end of a consulting engagement, the client has answers. At the end of a coaching engagement, the client has more questions. Consultants are often eager to implement the recommendations. If there's any heavy lifting to be done, coaches always expect the client to do it.

Mentors are generally more senior members of a company who can help a junior navigate the formal and informal paths of the hierarchy. A mentor says: "I've walked this path before. Maybe the path that worked for me will help guide you." A coach says: "We are on untrodden ground now. Where do you want your next step to be?"

Counseling is traditionally oriented toward analysis, understanding patterns, and interrogating the past for hints about the present. Coaching is relentlessly present-minded and action-oriented. While coaching may be therapeutic for some CEOs, it is definitely not therapy.

Finally, get three or four references and call them. The strongest question you can ask a reference is "Would you engage this coach again?"

There are other reasons for caution, beginning with the undisciplined world of executive coaching. Anyone can claim to be an executive coach. In fact, more than 20,000 individuals currently bill themselves as coaches to CEOs, most with no meaningful claim to the title. There are few standards and even fewer regulations. Although there have been a few attempts to build certification programs and ethical standards for coaches, these programs represent a tiny fraction of those who say they are executive coaches.

For this article, I talked to more than a dozen CEOs and an equal number of coaches. Yet only four active CEOs agreed to be quoted by name. Even when Fortune 1000 CEOs have experience with coaching and found it beneficial, many are reluctant to talk about it publicly. I had better luckwith recently retired CEOs. "CEOs have a hard time making public statements related to their own development," says Jonathan Schwartz, president andCEOof Sun Microsystems until it was recently acquired by Oracle. "CEOs seek whatever help they can get; they just don't do it in the public eye."

Even Schwartz, who won a reputation for transparency with his use of socialmedia (hewas perhaps themost visible CEO blogger when he was at the helm of Sun), didn't tout his coaching experience while he was a CEO. Yet he valued the coaching of Justin Sherman, an executive coach based in San Francisco.

Five Engagements of Coaching

CEOs engage coaches inmany ways and for a variety of outcomes. But the engagements tend to fall into five major patterns: career development, accountability, credibility, authentic feedback and informed perspective. Most coaches tend to focus on one or two of these objectives at a time.

Career Development. Career development is one of the most common waysCEOs leverage executive coaching. CEOs need career development as much as any other member of an organization. That they often don't receive any is just another reason CEOs are isolated. As executives advance in the hierarchy of any organization, useful career development feedback from the CEO's team becomes increasingly critical, yet less frequent an dmore unreliable.

"I have the same developmental needs I had at the start ofmy career," says Steve Bennett, former CEO of Intuit. "At the end of the day, people who are high achievers—who want to continue to learn and grow and be effective—need coaching."

Accountability. Unlike almost anyone else, a coach is able to hold a CEO accountable for specific outcomes. Devora Zack, president of Only Connect Consulting Inc. in Bethesda, Md., and author of Networking for People who Hate Networking, recounts working with a client who was very successful, but whose stakeholders had the sense that he was on the outside looking in.The fact that the CEO commuted to headquarters froma different state quite likely had something to do with that impression. The goal of the coaching became for the CEO to build stronger interpersonal relationships. The CEO agreed to invite a different colleague to lunch or coffee twice a month.

Thereafter, each coaching session began with Zack asking, "So, how many people did you have lunch or coffee with last month?" The CEO kept his commitment and his performance becamemuch stronger for it.

Credibility. Increasing credibility is a common goal of CEOcoaching.This is no simple task, says Paul C.Gaske, a San Diego-based executive coach and managing director of Leadership Research Institute. "Credibility is something a CEO can influence, but he or she can't control," he says. "Credibility is conferred on the CEO by how he or she is perceived."

Gaske provided coaching services to a number of executives on the leadership teamat Pfizer, including former chairman and CEO Hank McKinnell, who retired in 2006. At one point, McKinnell was perceived as cerebral, analytical and somewhat aloof.What critical leverswere deployed to change how McKinnell was perceived?

"‘Holiday cards!" says McKinnell, who recounts Gaske coming to a coaching sessionwith one of the Pfizer season's greetings cards that McKinnell had mailed to employees and colleagues. The cards had a message of gratitude and were stamped, "Seasons greetings, Dr. Henry A. McKinnell." Gaske didn't need to say a word. McKinnell immediately understood that the holiday cards communicated an unintended impersonality and formality.

Gaske suggested that if McKinnell wanted to move the needle on how Pfizer people perceived him, he could begin by applying more of a personal touch to his communications, such as signing the cards "Hank" and including a brief personal message. The coach made the suggestion, but the heavy lifting was up to McKinnell.

The next year, he not only signed each card, but added a short personal note to each recipient. The change was immediate. "I can't tell you how many hundreds of people reached out tome to tell me how much they appreciated my gesture,"McKinnell recalls. "It took only a little effort on my part, but it made a huge difference."

Truth Telling. No one in the organization needs an honest, close and longterm relationship with a trusted advisor more than a CEO. No one else needs to hear the truthmore, but gets it less from colleagues; no one else is always the focus of criticism when things go wrong; no one else is the final maker of difficult and often lose lose decisions; and finally, no one else benefits from the rewards and celebrity when things go right.

When CEOs ask Boston-based Grace Andrews why they should engage an executive coach, she says: "The value you get from an outside person looking in who is not attached to your persona, job or product gives you an insight that you will never get from your colleagues. And what better benefit can you get than the truth?"

For Steve Bennett, former CEO of Intuit, the chief benefit of coaching is to get "unbiased feedback on the good and ill of my behavior." After a career at GE, Bennett became used to the candid and occasionally brutal feedback GE executives routinely receive. But the moment he became CEO, the feedback ceased. "The last time I knew I was funny was the minute before I became CEO,"Bennett says.

Informed Perspective. CEO coaches can provide not only strategic advice, but a strategic sounding board. "The nature of CEOs is that they tend to leverage the factors, qualities and attributes that led them to success," saysMorganMcKeown, a coach in Harrison, N.Y. "That mix usually serves CEOs well. But there are aspects of the CEO job that requires them to act differently, communicate differently and partner differently. A coaching partnership can help a CEO with those."

"Great CEOs, like great athletes, benefit from coaches that bring a perspective that comes from years of knowing [you], the company and what [you] need to do as CEO to successfully drive the company forward," agrees William R. Johnson, CEO of the H. J. Heinz Co. "Every CEO can benefit from strong, assertive and honest coaching."

The ROI

There is much at stake. Coaching can be costly, but not because of the fees, which, with travel expenses, can exceed $100,000 for a six-month engagement, but in terms of the CEO's time. "Compared to the magnitude of the decisions CEOs make, money is not the issue," says Schwartz. "If you have a new perspective, if you feel better with your team, the board and the marketplace, then you have received real value."

SELECTING A COACH
It's important to give an executive coach the same scrutiny that you would give any other professional. These six questions get the conversation started.

1. How do you define coaching? Professional coaches will have a definition of what it is they do. Be wary if a prospective coach can't offer a brief and cogent definition. Look out for candidates who are consultants in disguise. Consultants give you answers. Coaches ask you questions.

2. May I see your code of ethics? A formal code of ethics does not guarantee ethical behavior. But subscribing to one is indicative of a willingness to be accountable and level of professionalism. Look for a coach who subscribes to a code that addresses conflicts of interest, total confidentiality and transparent financial arrangements.

3. What principles do you favor in your coaching? A coach must have a solid knowledge of learning theories and change-process dynamics. Coaching sessions aren't bull sessions. Coaches must be expert communicators who use goal-setting, pacing and accountability to bring about the desired learning and behavioral changes. More than a cheerleader or a sympathetic ear, the coach must be someone who understands how professionals learn and grow and must have the skills to facilitate that learning.

4. What will you require of me? Any meaningful coaching engagement requires commitment. It's important to understand what the coach's process will require. How often will the coach want to meet with you? For how long? Will he or she ask you to complete personality assessments or do homework? Will the coach meet with the board or other managers in the organization? If things aren't working, is there a contingency plan? Asking for specifics helps you avoid a coach who's strong on charisma and weak on substance.

5. Does the proposed program match my needs? To get the best results, be specific about what you need, while staying open to the possibility that you may need something else entirely. In any case, it's helpful to say to your prospective coach, "Here's what I want to do. What do you know about it, and how can you help me?" Try to establish a level of detail where you know exactly what will happen if you work together.

6. Is confidentiality clear? The first question is who is paying the coach's fee and who is the coach accountable to? In most cases, the fee is paid by the CEO's organization, but the ideal response is that the coach is accountable to the CEO alone. That means all conversations and counseling are private and inviolate. The board should be able to evaluate progress based on external results, not on a report card from the coach.

Finally, get three or four references and call them. The strongest question you can ask a reference is "Would you engage this coach again?"

About John Kador