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Role of Executive Coaching in Transitional Economies

Guest post by: Veronika Chmelar

Article Overview: The author of this study is Mr. Sanjay Gupta. He was an MBA student in 2004 at CEU Business School, Budapest, when he wrote this study, as one of his exam papers. In this study Mr. Gupta compared the different approaches of coaching in the Middle and East Europe.     The reason, why this study is in my author “box” on www.EvanCarmichael.com and on www.businesscoaching.hu, is that it relates to the topic (coaching), and Mr. Sanjay Gupta interviewed me for this study. Further, there are different sources / references of my work (Coaching expectations and Conclusions – Alcoa CSI Europe) quoted in this study. This publication on both websites – mentioned above – is with Mr. Sanjay Gupta’s permission.

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Role of Executive Coaching in Transitional Economies

CEU Business School • July 2004

The author, Sanjay Gupta, is currently working for Siemens Rt., the Hungarian subsidiary of Siemens AG Germany as a Project Director. He is responsible for executing a Business Process Reengineering Project based on customized ERP solution for Siemens group in Hungary. He is leading (jointly with his Austrian counterpart) a team of approximately 100 employees from Hungary, Austria and Switzerland.
    Between 1999 and 2004, he handled the outsourcing business opportunities for various Siemens divisions in Hungary and executed outsourcing projects for Siemens customers. Before coming to Hungary Mr. Gupta has worked in Siemens India from 1991 to 1996 and in Siemens Germany from 1996 to 1997.
    Mr. Gupta is an Economist by qualification and is currently studying (part-time) for his MBA from Central European University in Budapest.


Table Of Contents
Executive Summary
•  Definition
•  Types of Coaching
•  How it works
Executive coaching in transitional economies
•  Need
•  Target group
•  Performance issues and Benefits
•  Possible Pitfalls
Cultural issues and obstacles
Conclusion
Sources



Executive Summary

The institution of executive coaching is a relatively new development in the field of leadership development initiatives. This also explains the dearth of agreed-upon definitions and standards in this field at this stage. The challenges of modern economy are making the organizations aware of the significance of starting leadership development programs. The need for a more personalized and customized approach to an individual executive’s development as a leader has been the main driving force behind the increase of executive coaching engagements. Executive coaching, to quote the The Executive Coaching Handbook (page 42) is a balance of science, art and expert improvisation.
    From the point of view of this study, I have investigated the practices of executive coaching in Hungary and drawn upon the personal experiences of a practicing Hungarian executive coach, Ms. Chmelár Veronika. She mentioned that her role is not to provide answers, but to help the executive to ask the right questions from themselves and discover the answers from within their own reservoir of knowledge and experience.
    The performance issues involved in such an engagement should always be derived from the strategic organizational objectives and all the individual goals of an executive must be linked to and subordinated to these objectives. The usual obstacles faced by an executive coach are scepticism, lack of personal motivation in the executives and confusing coaching with therapy. However, there are certain attitudes more pronounced in Europe in general, but also in transitional economies in particular, e.g. academic approach and curiosity towards the leadership as a concept and field of knowledge. In transitional economies, mainly due to historical reasons, an executive coach needs to concentrate (perhaps more than in the already established market economies) on development of certain specific skills or aspects like shifting the management paradigm, decision making skills, delegation skills, communication skills and constructive and mature approach towards handling conflicts. Another speciality, stemming from the organizational set ups, is the skills for dealing with Headquarters as the representative of the interests of the local subsidiary.


What is Executive coaching

Definition
The Executive Coaching Forum, a premier institution involved with the establishment of the principles and guidelines for executive coaching, defines executive coaching and the individual terms therein in The Executive Coaching Handbook (page 19) as follows:

Executive coaching is an experiential and individualized leader development process that builds a leader’s capability to achieve short- and long-term organizational goals. It is conducted through one-on-one interactions, driven by data from multiple perspectives, and based on mutual trust and respect. The organization, an executive, and the executive coach work in partnership to achieve maximum impact.

Definition of individual Terms:

Experiential: The development of the leader is accomplished primarily by practical, on-the-job approaches rather than through classroom or more abstract methods.

Individualized: The goals and specific activities are tailored to the unique aspects of the individual and the organizational system.

Leader development process: Executive coaching focuses on developing the executive’s ability to influence, motivate, and lead others. Rather than relying on tactical problem solving or basic skill acquisition, executive coaching develops strategic thinking skills.

Leader: We use the term broadly to mean any individual who has the potential of making a significant contribution to the mission and purpose of the organization.

One-on-one: The primary coaching activities take place between the individual leader and the coach.

Build capability: Developing new ways of thinking, feeling, acting, learning, leading, and relating to others builds individual and organizational effectiveness.

Data from multiple perspectives: In order for the executive and her principal stakeholders to understand, clarify, and commit to appropriate coaching goals, various data collection methods are used to identify key factors and skills required in the organizational context. The appropriate use of interviews and standardized instruments assures accuracy and validity of data gathered from people representing a range of perspectives within the organization.

Mutual trust and respect: Adult learning works best when the executive and the coach, along with other members of the organization, treat each other as equals, focus on their mutual strengths, and believe in each others’ integrity and commitment to both coaching and the organization.

Three Levels of Learning:
Executive coaching involves three levels of learning:
•  Tactical problem solving
•  Developing leadership capabilities and new ways of thinking and acting that generalize to other situations and roles
•  “Learning how to learn”: developing skills and habits of self-reflection that ensure that learning will continue after coaching ends
The third level is an important and sometimes overlooked goal of coaching. Its aims are to eliminate an executive’s long-term dependency on his coach and teach habits of learning and self-reflection that will last a lifetime, enabling him to keep developing throughout his career.

Two main factors, which differentiate coaching from the other forms of training and skill development programs, are: (page 22 The Executive coaching Handbook by executive coaching forum)
•  It always involves a partnership among executive, coach and the organization
•  The individual goals of an executive coaching engagement must always link back and be subordinated to strategic organizational objectives



Types of Coaching

From the point of view of the role of the executive, skills to be developed and performance issues to be tackled, the following types of coaching exists:
•  Personal/life coaching
•  Career coaching
•  Group coaching
•  Performance coaching
•  Newly assigned leader coaching
•  Relationship coaching
•  High-potential or developmental coaching
•  Coaching to provide feedback debriefing and developmental planning
•  Targeted behavioural coaching
•  Legacy coaching
•  Succession coaching
•  Presentation/communication skills coaching
•  Team coaching



How it works

One could divide the process of executive coaching into the following four generic phases:

Phase 1 – Develop formal commitments: In this phase all the stakeholders in this process meet, discuss the performance and other issues involved, agree upon the basic goals and obtain commitments. The stakeholders are the Executive, the Coach and the representative of the organization in the role of a Sponsor.

Phase 2 – Information gathering and Planning: This step involves all the participants, but primarily the executive and the coach getting to know each other and developing an understanding of the organizational and personal context, in which the coaching process is executed. This involves carrying out a thorough review of the performance issues involved, the short and long term goals of the organization and getting to know and assess the individual executive through face-to-face discussions and questionnaires etc. The deliverable for this phase is a customized “Professional Development Plan” for the executive. The bases for this plan are the predefined organizational objectives (both short and long term), which the executive needs to achieve. In this phase a lot of personal interaction is required between the executive and the coach. There has to be an environment of absolute faith and confidentiality. Needless to say, this is a big challenge because in the beginning the executive needs to feel the sense of security in discussing his/her weaknesses with the coach. The coach needs to establish and follow the basic rules about confidentiality, anonymity and professional conduct.

Phase 3 – Coaching: This is the phase, when the actual coaching begins. The process is designed to follow the basic structure of the professional development plan. However, the execution of the plan or the individual goals of the plan should be achieved with a certain degree of flexibility. Also the plan itself might need to be fine tuned in light of the initial experiences. The process involves “learning on the job approach”. The experiential aspect of the coaching is very important and the executive must experience the effects of changes in his/her style of functioning or communicating. The role of the coach is to make the executive aware of the need and the potential for improvement and then accompanying the executive at every stage of this journey towards becoming a more effective leader. It involves a stream of one to one discussions, observation by the coach and feedbacks from the coach (even from colleagues in certain cases).

Phase 4 – Evaluate and Follow-up: This is the last step in the process. There is a formal evaluation of the result of the coaching assignment. The aim is to assess the extent of the achievement of the initial goals of coaching. The basis for this is provided by the mutually accepted professional development plan as modified during the coaching process. The aim is to provide the executive with a framework for sustaining the improved performance and the tools for continuously being capable and willing to learn new skills. In the end result, the executive should become more effective and be able to contribute constructively to the achievement of the organizational goals.



Executive coaching in transitional economies

In order to make this study more focussed and also due to ease of reference, I will endeavour to concentrate on the situation in Hungary in the field of executive coaching. As is clear, that Hungary is a transitional economy and the business, management and leadership issues involved in this economy are a fair representation of the situation in most other transitional economies. I also came across some material about developing managerial competence in Russia. Since the European perception of executive coaching is somewhat similar, irrespective of the country and type of economy involved, I shall also draw some inferences about the challenges of being an executive coach in Europe from the material about the European view of an executive coach.


Need

The need for developing managerial competence in the transitional economies is related to the historical development of this aspect in these economies. Most of these economies have been planned and controlled economies guided by the concept of socialism or socialistic pattern of society. The guiding factors in all economic pursuits have been the greatest common good and adherence to the authority. The foundation stones of a modern economy are result orientation, competitiveness, active responsibility and disciplined approach to team work.
    Principally speaking these two approaches are not mutually exclusive. However, the implementation of the concept of greatest common good has lead to a style of management, in which the adherence to authority and discipline have been interpreted as exercising control and getting work done through explicit instructions. Individual creativity and questioning the established practices (and thereby questioning the instructions of the mangers) was not rewarded in this environment. As a result of this, the managerial competence got limited to administrative competence and individual creativity become dormant.
    In the last 10-15 years the influx of foreign capital and management competence has lead to a marked improvement in the level of managerial and leadership skills of the local mangers. However, this is a process, which needs to be supported by a conscious effort on part of the organizations and individual executives. The leaders should be guided by the pursuit of excellence through motivating, inspiring and coaching their team and harmonizing the personal goals (their own and the team members’ goals) with the organizational goals. Various kinds of group trainings are there to develop the team skills and management skills of the individuals.
    At higher levels of hierarchy in the organization a more customized and individualized approach towards leadership development is needed. Executive Coaching is the attempt to fill this void and provide a personalized support framework for awakening the dormant leadership instincts of these executives or further honing them, to make them more effective and productive as leaders.


Target group

The target group primarily is the top management level and the level below it. To put it in a hierarchical perspective, it is the level of the CEO, CFO, CIO, COO and the Vice Presidents of individual business divisions.
    In some cases certain individuals from the lower layers of management are also being developed through the institution of executive coaching. These are generally high potential executives targeted for bigger leadership challenges in the foreseeable future.


Performance issues and Benefits

The expectations from the leadership and management development initiatives, from a Russian perspective, have been summarized in the following quote from a paper on Management Development in Russia by Igor Gurkov, Higher School of Economics, State University Moscow (bullet point 6.1):
    “Management development in Russia, like in other transforming economies, is an ‘open-ended’ process, aimed at improving managerial effectiveness through the deliberate acquisition of specific and practical knowledge. Three of the major challenges, which fostered the acceleration of the acquisition of knowledge by managers are:
•  Developing the potential for an individual’s horizontal and vertical mobility
•  Obtaining and mastering an adequate role in emerging entrepreneurial governance structures based on private property rights
•  Transforming management techniques, structures and values in a market-oriented fashion in order to both revitalize and strengthen enterprises and gain a competitive advantage”

In another instance an American company operating in Hungary has specified the following performance issues for its executive coaching programs:

Coaching – Expectations – Alcoa CSI Europe

What I have been looking
•  Changes in
•  Improved managerial skills – confirmed by performance indicators
•  Development in competencies, specific areas for individuals – confirmed by actions
•  Removing blocking factors which hinder achieving the best performance in the
•  Managers who will understand and adapt coaching their own toolkit

Source: Personal interview with Ms. Chmelár Veronika, a practicing executive coach in Hungary.

My aim for showing these two lists is to highlight the fact that expectations and performance issues involved in an executive coaching engagement differ from country to country and from organization to organization.
    However, the approach in Alcoa’s case is closer to the context of leadership development that this study primarily focuses on.

The benefits of a coaching experience have been briefly summed up in the following list:

Conclusions – Alcoa CSI Europe

•  A method which delivers changes to almost “hardwired” characteristics
•  Professional background and external view can prove extremely beneficial
•  Setting goals and measuring progress is key, even if changes are not fast, or not that easy to capture
•  It can have pleasant side effects, like extra communication channel, strengthened trust whithin the team, special consulting opportunities (comes handy for performance appraisals too)
•  An alternative personnel development method, worth more than its cost

Source: Personal interview with Ms. Chmelár Veronika, a practicing executive coach in Hungary.

One unique feature of coaching as an approach towards developing leadership skills comes from the “experiential” aspect. During my personal interview with Ms. Chmelár, she mentioned that her role is not to provide answers, but to help the executive to ask the right questions from themselves and discover the answers from within their own reservoir of knowledge and experience. She does not consider coaching a consulting assignment; rather to her it is similar to a sports coach’s job of supporting the athlete’s efforts to bring out the best performance.
    The study by Igor Gurkov quotes Singer about the same concept (bullet point 3.2.1):
    “...In such situations, the act of coaching is quite consistent with contention that it is ‘concerned more with asking questions which help a man to think than with teaching him what to do’ (Singer, 1979)”



Possible Pitfalls

It is absolutely imperative that due care is taken in selecting the executive coach. Also, the formulation of expectations and goals from such an engagement needs to be a collaborative process involving the executive, coach and the organization. It is very important that all the involved parties understand the basic goals and premise of cooperation in the same way. In absence of such an alignment of goals and comprehension, there are unnecessary frictions and conflicts rendering the coaching process ineffective or limiting its positive influence.
    The issues of professional integrity, confidentiality, mutual respect and faith are some of the cornerstones of a successful coaching engagement. In case any of these basic prerequisites are missing, the success of coaching is seriously jeopardized.



Cultural issues and obstacles

As mentioned earlier, the transitional economies share a common and distinct past as compared to open market economies. Due to this an executive coach operating in these economies needs to tackle, over and above the usual obstacle, certain special challenges.

The general obstacles to a successful executive coaching engagement are:

•  Scepticism towards the coach: the coach has to dispel, right in the beginning, the perception about he or she being the Mr./Ms. “Know it all”. An open discussion communicating the fact that the coach is there to help in the executive’s search for excellence and not to give recipes for instant success would go a long way to tackle this issue.

•  Motivational factors: The executive needs to be duly convinced and motivated to develop his/her leadership skills. If the organization “orders” the executive to go for such a process, the individual motivation is replaced with a compulsion. This severely damages the effectiveness of coaching. Further, the executive should not have an escapist attitude and should acknowledge the need for further developing or rectifying certain skills.

The issues, which might be more Europe specific can be summed up as follows:

•  Therapy v/s Coaching: I would like to point out that (in light of my research on the subject) this is more of a European phenomenon than a global one. To make my point, I quote Lynne De Lay, CCL’s feedback and coaching manager in Europe:
    “In general, Europeans seem to think that coaching is about ‘fixing something that is wrong,’ that the person who is asking for or needs a coach is deficient in some way. While this attitude can exist in the United States, it is the most common understanding in Europe.
    Coaching also gets confused with business consulting or therapy. In fact, some European coaches do therapy under the guise of coaching – with little or no regulation or standards – which further confuses the issue.
    In addition, culturally speaking, Europeans also tend to be more private, less ready to share personal issues with others than Americans.”
    To the question about, how they handle this issue, the following answer was given:
    “When CCL holds coaching workshops in Europe, they typically have a two-fold purpose: to develop coaching skills but also to help the organization create a common understanding about coaching. This is especially critical when the company initiative in coaching crosses multiple cultures.
    Another key element is to provide assurances around confidentiality...”

•  What is Leadership: To quote Mike Kossler, CCL’s custom programs manager – Europe:
    “Our cultural lens may define leadership differently depending upon from which part of the world we come...”
    This is an issue, which needs to be addressed in the beginning. If the executive coach is not a native of that country, then he/she should carry out adequate research to be able to understand the perceptions of the executives about leadership, with whom he/she works.

•  Theory of Leadership: Don Prince, CCL’s open-enrollment program manager in Europe says:
    “Another key difference in the European and U.S. perspective of leadership development is the interest in the theoretical and logical aspects of leadership. In European programs we give more emphasis on the theories of leadership. The questions ‘why’ and ‘how’ are asked more frequently. There is a stronger need to understand the reliability and validity of psychometric instruments and a greater emphasis on the ‘expert’ or ‘right’ answer.”
    The strong theoretical interest of the European managers in general is also an important issue. The coach would do well to formulate an approach to handle this need in a way that the executive’s natural curiosity is satisfied but the coaching engagement does not boil down to a “class room” discussion about management and leadership theories.

Over and above these general obstacles, the executive coach might come across the following issues peculiar to the transitional economies due to their history or culture:

•  Shift of Management Paradigm: Due to the ongoing transformation and changes in the transitional economies, there needs to be a re-evaluation of the traditional concept (in these economies) of what a manager or leader does. It is important to distinguish between an administrator and a leader. The executives and their organizational environment must understand that management is a fulltime job and not just an add-on to operative work. This will lead to a rethinking on the part of the executive about his/her primary task and responsibility. The result should be a release of capacity, time and energy, hitherto blocked in operative or administrative work, for developing his/her coaching, motivational, inspirational and in general leadership skills.

•  Decision making skills: Due to historical reasons, the decision making and owning up responsibility for those decisions was not an individual’s sphere of responsibility in these economies. Now the executives need to release their own inherent creativity and use their insight and experience to make responsible business decisions (having short and long term effects). This is an area, which requires special attention and a conscious effort on the part of all the participants in a coaching engagement. The organization needs to create an atmosphere of trust and faith in the decision making capabilities of their executives (primarily in case of the organization being a local subsidiary of a large multinational). The executives, on the other hand need to be aware of the impact of their decisions and be willing to seek (from all possible sources, irrespective of the level of hierarchy) and evaluate all relevant facts, before making a decision. The coach should be in a position to support the executive’s decision making by ensuring that the executive is equipped with the tools and thinking patterns necessary for making a considered decision.

•  Delegation: An important part of a manger’s job is to be able to delegate tasks to the suitable persons in his/her team. Lot of executives are averse to delegating and would rather do it themselves. The reasons vary from the executive being convinced that he/she can do it the best to the executive not having enough faith in his/her team members. There might also be an element of insecurity involved in avoiding efficient delegation of work. However, the executives need to realize that delegation is as much their responsibility as a “privilege”. Unless they delegate operative and even parts of strategic assignments to their tem members, they will not have enough time and energy to concentrate on their task of leading the group or organization. Secondly, delegation is an important tool for job enrichment and professional development of managerial successors.

•  Communication skills: This is an area where considerable and perceptible improvement can be made through effective coaching. There needs to be a shift in the approach here and the executives should realize the importance of “two way” communication and “active listening”. The right balance between reacting and listening skills is very important.

•  Conflict handling skills: The culture in most of these economies has been that of subservience to authority and creating an appearance of apparent harmony without any conflicts. The modern economy, by nature, does not always have black or white answers or approaches to issues. In such an environment there is bound to be difference of opinions and points of views. In a mature and open work culture voicing these differences and practicing constructive criticism with the aim of improving overall performance is and should be the way of life. The executives in the transitional economies need to be made aware of these facts and be encouraged to not only practice it, but also provide opportunity for the employees at lower levels of hierarchy to do so as well.

•  Handling the relationship with Headquarters: In lot of cases, the organizations operating in these countries are the subsidiaries of large multinationals. These multinationals have their own organizations, which are generally characterized by a matrix structure and regional management levels. An executive working in such an organization needs to balance the tasks of leading the local organization and effectively representing the organization and its interests towards the headquarters. This situation has its own peculiarities and it makes demands on the executive’s communication, negotiation and intercultural skills.



Conclusion

To conclude I would like to say that executive coaching is already and will be, in future, a more and more often used tool for leadership development in transitional economies. The reason for this, on one hand, is the increased awareness about the need for developing effective leadership locally and on the other hand the continued pressures of the modern economy for optimization of resources and achieving sustainable competitive advantage.



Sources

Personal interview with Ms. Chmelár Veronika, a practicing executive coach in Hungary. Web site: www.businesscoaching.hu
The Executive Coaching Forum
Executive Coaching Studio
Center for Creative Leadership
BlueSteps
Management Development in Russia

The author is Sanjay Gupta

9th July, 2004

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About the Author: Veronika Chmelar
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Veronika Chmelar Executive Coach, Managing Director I have started result-oriented economic and business output enhancing executive coaching in Hungary with prior US experience. The following of my prior experiences have significantly contributed to the fact that I pursue it with a high-standard of competence: my professional sport background; my B. S. in Economics and M. S. in Finance; my generalist experience and perspective gained through my jobs in various industries, service sectors, management positions, and my expert work; my experience as an entrepreneur for eighteen years and as the manager of my own firm; my further studies. Business Coaching Ltd. Hungary 1023 Budapest, Frankel Leo ut 86. Phone / Fax: +36-1-3260288 Mobile phone: +36-20-9612919 www.businesscoaching.hu

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