Still in Demand | Slowdown spur for executive coaching9 min read . Updated: 24 Feb 2009, 12:09 AM IST
Still in Demand | Slowdown spur for executive coaching
Still in Demand | Slowdown spur for executive coaching
When S.S. Raman took over as president of TVS Electronics Ltd, part of the TVS group, in 2005, one of the biggest challenges he faced was the shift in leadership styles. “I had a command-and-control style of working, which is typical of executives in a manufacturing set-up. I was faced with a very different situation when I had two-three companies reporting to me," says Raman, who had moved from consumer durables firm Whirlpool of India Ltd, where he had been heading the manufacturing, technology and procurement functions as executive director. Raman, now chief executive officer (CEO) and president of TVS Electronics, says, “The moment I stepped out of my territory, ambiguity grew beyond one axis."
Raman’s 34 years in the manufacturing and technology sector, which included working in The Tata Engineering and Locomotive Co., now called Tata Motors Ltd, and Birla Yamaha, now called Birla Power Solutions Ltd, had not prepared him for this. Luckily, Raman’s boss gave him an opportunity to be coached. This helped him transition smoothly into the new role.
“One big learning for me from my coaching sessions was to pause and listen and see where the other person is coming from," says the 56-year-old executive. “I was so used to giving out solutions the moment a problem was put in front of me that I was not investing time in getting to the root cause of the problem with the other person and help him find a solution."
As businesses in India get increasingly globalized, companies are turning to executive coaching to help high-potential employees perform optimally in larger and ever-changing roles. Executive coaching—which refers to one-to-one mentoring of senior executives on leadership styles, organizational change and strategy—has caught on over the last three-four years, although an ad hoc concept of it has been around for many years. It isn’t as well-developed here as it is in Europe but Smita Anand, regional director, Asia-Pacific, at Hewitt Associates Consulting (Shanghai) Co. Ltd, says the leadership development practice has seen a 100% year-on-year growth in number of clients in the last two years. And companies are now showing greater interest in deliverables, understandable given the costs involved.
“Many forward-looking Indian organizations have invested time and resources in grooming their high-performing executives and have resorted to coaching to attract and retain the best and brightest talent," says Nina Chatrath, senior consultant in the leadership and talent consulting practice of global search firm Korn/Ferry International in India.
Conglomerates such as the Godrej group, Mahindra and Mahindra Ltd, RPG Enterprises group, consumer care and home products maker Hindustan Unilever Ltd, pharmaceuticals company Dr Reddy’s Laboratories Ltd, telecommunications company Bharti Airtel Ltd and information technology firm HCL Technologies Ltd, among others, are increasingly investing in executive coaching to help high-performing employees take on bigger roles. India’s largest software services firm Tata Consultancy Services Ltd, for instance, decided to focus on building leadership capabilities at all management levels and grooming managers across the TCS network for global leadership positions as the company scaled up significantly in the last five years. “Leadership development programmes have been customized and tailored in the last three years to develop key competencies and behavioural attributes for global managerial roles," says Ajoy Mukherjee, vice-president and head, global human resources, TCS.
The current economic slowdown has only spurred the need for executive coaching. “Contrary to popular belief, we are only seeing growth," says Pradipta Mohapatra, executive coach, co-founder and chairman, Executive and Business Coaching Foundation India Ltd. Although companies are cutting back on plain vanilla training, they are not doing the same with value-added leadership development programmes.
There is a business rationale behind this. Many of the managers at the senior level, especially in young companies, do not usually have experience of steering a company through a downturn, which requires a different set of skills. Coaches help these CEOs, chief operating officers and chief marketing officers look at new possibilities, survive a crisis and take rational and often tough decisions on issues such as downsizing and cost-cutting. “During a downturn, CEOs are required to have the ability to innovate, look for new markets and segments—basically step out of (their) comfort zone and look at new areas of growth," says Hema Hattangady, vice-chairman and CEO, Conzerv Systems Pvt. Ltd, which is into design, development and implementation of energy management systems for industrial applications. “A coach helps you broaden your mind, look at the positive sides and hang in there till the upturn."
Citing an example, Hattangady says her company had only been targeting industrial and commercial users of power management systems and had never bothered about other segments because it was easily achieving 45% year-on-year growth. A downturn later, she was facing declining demand and her coaching experience led her to look at lesser-affected segments such as health care and educational institutes. “I was surprised to see the demand in these segments which we never bothered about since we were doing fine," says Hattangady.
“During (a) period of business downturn, organizations need their best people to navigate successfully through difficult times," says R. R. Nair, an executive coach who is on the faculty for executive education programmes at the Indian School of Business (ISB), Hyderabad—he coached Hattangady. “Asking leaders to force-rank (prioritize) the concerns that they seek to address creates highly targeted coaching interventions with a high likelihood of success."
Raman, too, believes that coaches have a major role to play in such difficult times. “The need for a coach is far greater since (the) time available to executives is sharply reduced and the magnitude of problems have enormously increased," says Raman. In Hattangady’s own words, the credit for her evolution from a diffident sales professional in 1993-95 to a CEO in 1996 goes to her executive coaches. “Initially customers were very resistant to me. They were not ready to accept a woman executive, and that too with no technical background," she says. “Coaching helped me get where I am today."
The corner office can also be a lonely place. There are times when a CEO needs an outsider with no vested interest to act as a sounding board. “Executives come under tremendous pressure during the economic downturn, affecting their teams’ productivity and often people under pressure revert to their natural styles in order to survive," says Raman. “A coach can help leaders find solutions by widening their perspective, maintain (the) desired leadership style and manage morale during crisis."
Generally, companies adopt a mix of approaches to train and coach future leaders. Internally, they involve top management, board directors and subject matter experts to coach and mentor top performers while externally, they have coaches and consultants for executives. Interestingly, executive coaching is now being used increasingly to do more than just influence behaviour or improve performance. “Coaching is not just about changing behavioural styles, but it is becoming an essential part of a business leader’s learning process, providing knowledge, opinions and judgement in critical areas," says Chatrath.
The executive coaching space in India is dotted with a number of companies, including global players such as Europe’s leading coaching firm Noble Manhattan Coaching Ltd, FranklinCovey Co., Coach U, Inc. and Personnel Decisions International Corp. The Change Partnership UK, led by coaches Peter Hogarth and Kenneth MacLennan, has had a presence in India through The Change Partnership India since 2004. Executive coaching is also administered by coaches such as Marshall Goldsmith of Marshall Goldsmith Partners Llc. and management guru Charles Handy, who are invited by organizations and leading business schools.
A number of executive search firms such as Spencer Stuart, Korn/Ferry International and human resource consulting firms, including Hewitt Associates Llc., Right Management Inc. and Totus Consulting Services Pvt. Ltd, have added coaching to their service offerings. In 2007, Executive and Business Coaching Foundation India was set up as the first recognized organization in India to accredit coaches and advance the profession of executive coaching.
Many senior executives have taken to executive coaching after retirement. After a 33-year career with Unilever Plc., Naren Nanda took up executive coaching after retiring in 2003 as the head of human resources for Unilever’s global home and personal care business. Nair of ISB was formerly organization development adviser with Unilever’s Asia business group. Mohapatra, who set up the Executive and Business Coaching Foundation, is former president and CEO of the technology businesses of the RPG group and an alumnus of Harvard Business School. Other executive coaches include Anil Sachdev of Grow Talent Co. Ltd and Tarun Sheth. Sachdev, who is the founder and CEO of School of Inspired Leadership, a business school with a focus on leadership development, says he has coached at least 200 senior executives in the last eight years.
However, the executive coaching market, in India and globally, remains largely fragmented. Business consultant Ram Charan, who has worked behind the scenes with top executives, explains this in a study on coaching published by Harvard Business Review, or HBR, in its January issue. He says that barring some coaching groups, most are still boutique firms specializing in, for example, administering and interpreting 360-degree evaluations.
“To get beyond this level, the industry badly needs a leader who can define the profession and create a serious firm in the way that Marvin Bower did when he invented the modern professional management consultancy in the form of McKinsey and Co.," says Ram Charan.
“At the moment, the executive coaching space in India is not as well developed or sophisticated as that in Europe," says Gerard O’Donovan, executive coach and chief executive officer, Noble Manhattan Coaching. “There are still a number of organizations that do not quite understand the difference between coaching and consulting and training. However, this is changing quickly." There is an insistence on clearly etched deliverables and more and more organizations are looking at return on investment, or RoI.
Coaches say RoI can be measured by having clear-cut objectives at the outset and deciding how to measure coaching performance. “The performance can be measured by the coachee or the reporting head along with a 360-degree feedback survey before the commencement of coaching and after the end of coaching," says Mohapatra.
The increasing interest in deliverables is understandable. For an individual, the cost of coaching ranges from $100 (about Rs4,780) to $400 an hour, with an average of $250. In the case of corporate coaching, the coach is usually paid a day rate. “In India, that would currently range from $500 to $3,000 per day with an average of $1,500 per day," says O’Donovan, who has coached extensively in India—both individually and on contracts with companies, including beverages company PepsiCo Inc., staffing company Ma Foi Management Consultants Ltd, IT solutions and service provider Vertex India Pvt. Ltd.
Globally, on an average, one can expect to pay an executive coach $500 an hour, according to the HBR study. Mohapatra says coaching sessions are usually longer in India and one can expect to pay around $1,000 for 2 hours of coaching a senior-level executive. For mid-level executives, the fee would be $500 for the same amount of time. The HBR study showed that contrary to popular perception, coaches are being engaged primarily to develop high-potential employees.
Among the 140 coaches surveyed, 48% of the respondents said coaches were hired to develop high-performing managers or facilitate transition. Only 12% felt that coaches were signed up to address “derailing behaviour" in executives.
Experts say specific coaching will be visible in the next phase of coaching—the trend is for more executive coaches to work within corporations. Not only on a one-to-one executive basis, but also to help with boardroom coaching, facilitating senior-manager meetings and working with teams of managers to help them understand how they can manage in a more “coach-like" way.
“Corporate life remains complex and companies and managers will continue to seek professional help to be able to build solid competencies around the skill sets that get challenged most," emphasizes Raj Bowen, managing director, Personnel Decisions International India Pvt. Ltd.