The CEO's performance has come under increasing scrutiny of late. Shareholders in public and private companies are demanding higher levels of financial performance. This mandates a quick dose of external help, often in the form of coaching to motivate individual mind-sets.
But being coached is seen as a sign of weakness by many CEOs, who think it could affect their image as strong leaders. Besides, there is the point that outside of seeking executive education, CEOs have only a few options available to them unlike employees who have a variety of training options.
“There is a strong correlation between a CEO's acceptability and a company's periodic results,” says Nimesh Patel, retired Chairman of a Baroda-based mid-cap polymer processing company. “The attitude and willingness to change translate into money. Only those who are comfortable in their own skin will have the courage and vision to do so.”
As the CEO of a mobile phone company, Sairam Iyer faced a sensitive profitability milestone that was brewing internal pressure. For years, the company had used a revenue-based compensation model, but with increasing cost pressures, a less popular compensation model had become inevitable if the company had to stay competitive in the marketplace.
In such tough times, Sairam remained optimistic, convincing senior executives and his field teams to evaluate new approaches. With a continued drop in prices and market pressure, he often wondered if they would be able to pay employee salaries and maintain the retail outlets necessary to manage growth. Externally, however, he was composed, a pretence he needed to maintain.
Sairam's experience may have been different had he worked with a coach to help sort out his often unexplained stress. His senior team needed support as well. As Sriram says, “Under pressure, the tendency to look inward is common and being aware of such issues means one has the opportunity to fix them. Despite this logic, CEOs continue to place low priority on getting external help.”
CEO style and performance
P. Srivastav, a first time CEO, has found that the “bulldozer-style” management approach does not gel in his present company. In previous leadership roles, Srivastav would take charge of the situation, thinking through every problem himself. After several months of coaching in his new role, he has finally developed the ability to get employees to take more initiative in solving problems. “Superior solutions began to surface more efficiently, and I was able to concentrate on the larger issues appropriate to my leadership responsibilities,” Srivastav confessed.
Sairam remembered the trickle-down effect of working with his coach much after a new compensation model was put in place and attrition rates went down. “CEO coaching done in a vacuum is speculative and does not address root-cause issues,” he says. “My coach has improved my ability to focus on ‘macro' issues such as shareholder value management, talent acquisition and improving employee performance — all of which require cross-functional coaching. From what I've seen, good CEO coaches don't work just with the CEO, they work with the entire senior management.”
Band-aid or a fix?
Informal advisors have traditionally been the first choice for CEO coaching. However, the younger CEOs, given their quicker rise to the top and shorter tenure at the helm, need professional support to develop systematic leadership capabilities that coaches are best equipped to address.
Even the best B-schools do not necessarily address the practical aspects of CEO functions. For instance, business schools may offer negotiation skills, but hardly teach the art of closing deals. From the viewpoint of a CEO, the gap between getting coached in a class-room type environment and hiring a coach to hand-hold him through practical aspects of a client facing business directly impact top-line growth.
During the recent World Cup, there have been arguments in favour of India appointing an exclusive fielding coach, like every other country. The lack of specialist training has shown up in some lack-lustre fielding performances.
Improved CEO performance
The consequence of resisting change comes at a price. In the case of a mid-size packing goods MNC, though the CEO readily accepted the headquarter's recommendation to utilise coaching services, the Indian CEO only provided lip service to the coach's ideas, with not much real progress being made. With no signs of improvement, the CEO was fired and the coaching relationship terminated.
Karthik Kumar, senior partner with a ‘Big Four' audit firm, brought in a professional coach to help him gain fresh insights and points of view. “I was keen to have someone who'd been through this before,” he says. “Because of my coach's previous top management experience, I felt secure that he could effectively help me take a whole new look at things.”
When coaching is welcomed, the benefits reach well beyond the CEO's chamber. “In our company, CEO coaching resulted in increased effectiveness and greater optimism among senior executives as well,” Sairam observes. “Though a majority of traditional senior executives resist hiring external advisors as coaches, a good number of forward-thinking executives wholeheartedly accept professional coaches to better their performance. This trend will accelerate over the next few years and become commonplace amongst executives,” Karthik says.
CEO coaching is not for everyone as individual insecurities can sometimes get in the way. When executed with care, coaching can yield tangible and intangible benefits, stimulating much needed growth.
(The writer isManaging Director, The Business Labs Inc . This article is based on a recent CEO coaching camp and other programmes conducted by him in India.)