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Executive Coaching Trends Soft Skills, ROI, Technology All Gaining Importance

Business coaching was a $10 billion industry in the United States in 2018, according to IBISWorld’s recent market research report. With annual growth up 1.6 percent from 2013 to 2018, more than 95,000 people are employed in the industry, including coaches who work in-house in organizations and those who work in coaching firms.

Some 18 percent of coaches specialize in the executive coaching niche, a global survey by the International Coach Federation (ICF) found.

As the industry continues to grow, executive coaches are seeing distinct trends in what their customers want. These trends include a focus on soft skills and recognition that coaching credentials and training are important.

Soft Skills
Executive coaches are seeing more executives who want to improve their soft skills, such as team building, emotional intelligence, change management, and stress management.

“There seem to be more requests around soft skills in general,” said Todd Kemp of the Northwise Group in Denver. “I think the years are waning where people can be strong performers from a results standpoint, but be pretty toxic and create problems in the [work] culture.“

Soft skills cover many aspects of leadership, from “how to have hard conversations with people,” to “how to integrate heart and backbone,” when many people tend to operate at one end of the spectrum or the other, Kemp said.

Another soft skill Kemp coaches clients on is how to use coaching as a tool in creating a specific culture within an organization. People often think of “coaching” the way it’s used in sports, as a form of instruction. However, executive coaching is “a partnership with the client in a thought-provoking and creative process that inspires the client to maximize potential,” he said.

“The leaders I work with are recognizing there is an opportunity to change the culture of their organization” by using open-ended coaching questions, Kemp said, adding that executives use the coaching techniques to encourage team members to think creatively and develop their own solutions to problems.

Results
Clients and the companies they work for also want to see results that justify the expense of coaching. They’re demanding some form of ROI (return on investment), whether qualitative or quantitative. Many clients look to an internal 360 review to show results, said Ravi Raman of Raman Coaching in Denver.

“Are they getting positive reviews from peers, reports, management? How are things going, that’s what businesses are looking for,” he said. “They want to be able to show [coaching is] moving the needle.” For individual clients, the measure of success is often that they are feeling less stress, he added. “It’s not a quantitative measure, but to them, it’s pretty obvious.”

Credentials
Clients are also getting savvier about seeking executive coaches with training and other credentials, because the industry doesn’t have licensing requirements. (All the coaches interviewed for this article by Advisors Magazine have credentials through ICF.)

“Some coaches are not trained, and they can take a company down a bad path,” said Chris Sier of Executive Potential Plus in Michigan. Additionally, some executives might not know if they want a coach or a consultant. A consultant generally helps the company with a specific issue while executive coaches help improve leadership performance.

“Consultants leave and take the information with them, while a coach helps build up the company. When the coach leaves, the company has the knowledge the coach helped them build. ICF coaches help develop clients so they have the skills needed, which improves the business and allows them to be more strategic,” Sier said.

Raman agreed that more and more clients are demanding credentials and evidence of training.

“Clients now ask about credentials and how I coach. I think ICF credentials help create a trust factor.”

Industry-Specific Experience
Many executive coaches enter the field after acquiring business experience in a specific industry. Which industry they were in matters to some clients, who want a coach who’s familiar with their sector.

“The clear trend is for a shared background and understanding the context the client is in,” said Raman, who was a director at Microsoft before becoming a coach. “I find the people who hire and work with me are looking for that shared background. They know I understand how to make a tech product and get it to market. I coach people who are at a higher level than I was, but I can speak the language they speak.”

While Sier has seen some clients who are interested in specific industry experience, she isn’t convinced it’s necessary.

“Having the business background is what’s important. The important thing about coaching is to ask the client questions that allow them to have insights about their particular problems,” she said.

Sier also has a background in IT, but in contrast to Raman’s experience, she once lost a potential coaching client because “they wanted someone with a non-IT background to get a different perspective.”

Technology
One trend that’s probably no surprise is that executive coaches, like the rest of us, are doing more of their work with the help of technology.

“Technology has changed the game,” Raman said. “Almost all my clients are in the Bay Area, New York, or Seattle. We use Basecamp, Dropbox and Zoom Meeting for many sessions. I’m increasingly expected to be virtual to fit into people’s days.”

These trends, and the growth of executive coaching in general, may point to the changing nature of what it means to be an executive in the 21st century.

“Authentic leadership is increasingly important,” Raman said. Leaders once were able to “follow a format… Now it’s less about fitting into the model of what a leader should be and more about being you.” And, he added, coaches can help clients discover their own style, fix their shortcomings, and focus on their strengths.

 

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