Work Life

More Companies Mindful of Cost Even as Focus on Quality Coaching Intensifies

Coaching quality is essential to program success, but it is easy to let coach expenses get out of control. Maintaining quality while reducing expenses requires taking control of the process at the point of sourcing.
— By Ingrid Johnson

Bristol Myers Squibb (BMS) conducted a “survivor analysis” and discovered their new executives were leaving because the company needed to do more to ensure the success of senior-level professionals. The existing industry-recognized coaching program was successful in most ways, but there was obviously room for improvement at the senior level.

That triggered a desire to improve the quality of the coaching program while controlling costs as the company expanded its globalization efforts. The end result: BMS developed a multi-vendor coach cadre after interviewing 100 or more coaches to find the professionals who were best fits. A cross-departmental team was formed that developed a global rate card to provide a formal, consistent method for sourcing coaches and evaluating the effectiveness of the coaching process.

Driven by Need
There are many reasons to employ executive coaching, including succession planning, managing strategic organizational change, closing capability gaps, developing a global mindset, managing organizational transitions, and changing unproductive or negative leadership behaviors. Organizations are also flatter, more diverse and more technology-driven so they need leadership able to adapt to rapid change.

BMS recognized that lack of formal sourcing, goal setting and measurement was costing the company in terms of results and money.

One of the advantages to the BMS approach is it standardizes the coaching selection process. The buying decision for today’s executive coaching services is not simple because coaching is a customized service and customization adds value to pricing. Once the contract is signed, there are switching costs and cancellation fees in place, meaning the company is faced with additional expenses should the one-on-one executive coaching setup prove to be ineffective.

When BMS decided to develop a more effective approach to contracting executive coaches, the company was focused on quality, efficiency, effectiveness and cost reduction. Rather than letting the coaching vendors define services provided, BMS developed its own rating card and interviewed over 100 coaches to develop a supply base of coaches that can fit various needs.

BMS, in effect, set its own standard for defining third-party coaching, which is a stage of coach sourcing; it is safe to say that this is not reached by most companies.

Before the Contract is Signed
Standardizing the coaching recruitment and contracting process produces a number of benefits. With the revised sourcing process, BMS knows exactly how many coaches are working within the organization and who is being coached.

Rather than letting each unit hire coaches, BMS uses a cross-functional team that represents the entire organization and not just a single unit or department. When vendors are selected, it is based on consensus through the rating card. This is a cost control feature in that it controls the number and cost of coaches, but it also ensures the organization stays involved in ensuring the coaches are aligned with the corporate values, strategies and initiatives.

Coaching vendors approach organizations making promises as to effectiveness. In the past they were in the driver’s seat in terms of negotiating the number and type of coaching sessions and end results. BMS chose to put itself in charge by setting coaching goals and objectives that align with those of the organization and taking a firm hand in coaching requirements.

For example, BMS expects potential vendors to provide information on real-life experiences of coaches. Executive coaches need to bring knowledge and experience and also demonstrate good judgment and opinions. Other factors BMS considers include the quality of the company’s client list, clear methodology, ability to communicate clearly and avoid confusing HR jargon, ability to match the coach to the executive’s business needs, ability to adapt the coaching program to organizational priorities, and so on.

The coaching vendor should be able to demonstrate it has an organizational support structure in place to support clients however the client needs supporting.

Qualities for a Global Business Environment
There is a lot of talk today about the importance of a global mindset, which adds complexity to leadership. Global coaching can lead to open dialogue and develop the management acumen needed to resolve complex issues in a diverse environment. It also can increase talent mobility when executives develop their diversity and multicultural awareness. Upcoming and current executives can learn cross-cultural communication and how to avoid miscommunication.

This is one reason that coaching assignments should include as-needed meetings in addition to regularly held meetings. Coaching contracts that set a pre-determined number of meetings are generally not in sync with the flexible, dynamic global environment. Built into the program should be the ability for executives to meet with external coaches as deemed necessary to ensure continued progress.

Though a planned schedule is contractually important, it is more critical to ensure the executive is getting full value from the coaching program – whatever that takes. That includes promoting strategic thinking, improving conflict management and communication skills, and learning to deal with change management on a global basis.

Ensuring Value for Money Spent
During coaching vendor selection, companies need to consider certain features that will generate the most effectiveness.

Coaches obviously need to be trained and have demonstrable experience. They also need to document an action plan that establishes a goal setting process. This provides the baseline for measuring progress. There needs to be structure, but within that structure there should also be flexibility. Structure includes a formal matchmaking process, clear goals and objectives, and accountability measures.

How is an executive coaching program measured? One way is to simply ask the executive periodically during the program what performance improvements are being realized.

There are more formal impacts that financially and statistically measure results. For example, increased organizational functioning or bottom-line improvements are Returns on Investment (ROI). There has been a hesitation in the past to develop a rating system for a subjective process, but BMS decided to take out some of the subjective and add objective expectations and measures. The results have been to lower costs and increase efficiency and results.

As global organizations develop executive leadership for the future, they realize they need executives who are adaptable to change, able to act on innovation, and capable of communicating in a diverse environment. Executive coaching is one successful strategy for achieving all three goals.