A number of factors are contributing to an impressive increase in the use of of executive coaching:
Shift in workforce demographics – Organizations have become more concerned with developing their next generation of leaders, especially as 'baby boomers' retire. More and more companies are investing in executive coaching to boost employee skills levels as part of succession planning initiatives.
Development for retention – In survey after survey, CEOs say “retention of key workers” is one of the most critical factors in their firm’s success. Dissatisfaction with the potential for career development is a leading reason executives search for new positions. Organizations understand that it is far more expensive to recruit new employees than it is to retain them, and that development is a very effective way to create a positive work environment where employees are engaged, feel appreciated and see opportunities for career growth. In fact, HR professionals rank executive development programs as second only to competitive salaries as key to reducing turnover among executives.
Ever-changing business environment – The rapid pace of business and increasing time pressures mean that dealing with the speed and complexity of change is becoming an everyday challenge. Flexibility and the ability to learn and adapt have become essential skills. Focused interventions, such as coaching, have become critical to helping executives adjust to major shifts in business strategies and objectives.
Customized, just-in-time development – Because the development needs of individual executives are so diverse, the traditional use of “one size fits all” training programs that occur several times a year are becoming obsolete. Coaching offers a flexible, and highly personalized approach to development, which can be delivered to individual executives or management teams to address specific shortcomings in current performance, bolster under- developed skills or capitalize on existing strengths.
Broader management roles – Corporate downsizings and the resulting flatter, and hopefully more productive, organizational structures mean that newly promoted individuals often have to make larger leaps in skills, responsibilities and performance in their new positions. Development can help these executives in achieving these changes quickly.
Increased pressure in the “C-Suite” – With increasingly rigorous oversight from boards of director and the public’s concern over trust, ethics and integrity, the performances of the most-senior leaders within an organization have never been so heavily scrutinized and carefully measured. There is a growing recognition of the costs associated with poorly performing top level executives and the turnover among CEOs is at an all-time high. According to Harvard Business Review, 2 out of 5 CEOs fail in the first 18 months. For C-level executives, it is getting lonelier at the top as they have fewer people they can confide in and develop ideas and discuss decisions with. Executive Coaching allows organizations and boards to undertake preemptive and proactive interventions to improve C-level performance while providing these executives with the services of a safe and objective confidant with whom to collaborate on issues.
Individual responsibility for development – Downsizing, restructuring and other organizational changes have radically altered the traditional “employment contract”. With the decline of “jobs for life”, employees can no longer rely on employers to provide them with all their career development needs. As executives are being asked to remain flexible and to accept responsibility for their own careers, many are requesting professional coaching to help identify development needs, plan development activities and support personal problem solving.
Increased emphasis on succession planning – Corporations are beginning to realize that executive succession pipelines are broken. It has become absolutely critical for companies to cultivate internal candidates for top positions by establishing on-going programs that correctly identify the highest potential executives and provide them with meaningful and measurable development.