For several years, corporate leaders have utilized executive coaches to address personal challenges, refine leadership strategies, and enhance both individual and organizational performance. Given the substantial cost of coaching, which typically ranges from $200 to $3,000 per hour, a critical question persists: Are executive coaches truly worth this investment?
According to leadership experts and seasoned coaches, the effectiveness of coaching is contingent upon having clear objectives, personal accountability, and guidance from a trusted, experienced professional.
Coaching is most beneficial when it offers more than mere advice. It provides a structured, external perspective that aids leaders in increasing their self-awareness, improving decision-making, and enhancing communication skills.
David Peck, global head of Heidrick & Struggles’ executive coaching practice, notes that effective leadership is not inherently understood. He emphasizes that executive coaching at its best enables leaders to identify the areas where they need to adjust their mindset and behavior to achieve significant changes.
Coaches are particularly valuable for those advancing towards top executive roles. Leadership experts assert that coaching improves transition readiness, enhances emotional intelligence, and expands strategic vision. As Liz Bentley, founder of Liz Bentley Associates, an executive leadership coaching firm, explains, having someone introduce new ways of seeing and acting is crucial.
A number of chief executives acknowledge coaching as instrumental in their professional advancements. Former Google CEO Eric Schmidt once referred to hiring a coach, whom he consulted weekly for approximately 15 years, as the best professional decision he made. Similarly, Amazon founder Jeff Bezos and Microsoft founder Bill Gates have highlighted the importance of external counsel in navigating critical leadership moments.
Although the results of coaching are often qualitative and personalized, research indicates substantial benefits. A 2019 survey conducted by FMI, a management consulting firm, revealed that 87% of participants reported a significant return on investment from executive coaching.
In recent years, the market for coaching services has grown rapidly. From 2019 to 2022, the number of leadership coaches increased by 54%, with the industry’s annual revenue reaching nearly $4.56 billion, according to a 2023 International Coaching Federation global coaching study. However, this growth has resulted in a crowded and inconsistent field. Besides certification from the ICF, there is no universal licensing body or set of credentials, complicating the differentiation between experienced professionals and self-proclaimed “gurus.”
Dennis Baltzley, Korn Ferry’s global head of leadership development solutions, warns that credentialing is an inadequate substitute for relevant experience and skill. He stresses the importance of real-world experience and proven success.
Gary Rich, founder of Rich Leadership and former CEO, concurs, suggesting that it is challenging to identify those devoid of genuine expertise. He advises selecting coaches through trusted referrals, reviewing past clients, and ensuring alignment on coaching style, whether seeking a thought partner or a candid truth-teller.
Rich also emphasizes the importance of real-world leadership experience, asserting that individuals who have led significant enterprises possess valuable insights.
Despite its benefits, coaching does not offer a magical solution. Experts underscore the necessity of entering the process with clear objectives and a mindset geared towards growth. Shawn Cole, president of Cowen Partners Executive Search, points out that the coaching process can devolve into therapy if not driven by a genuine desire for leadership development.
Ultimately, the most substantial returns from coaching are realized when it is employed with intentionality for growth rather than merely coping. In today’s complex business environment, such clarity may be the most invaluable leadership tool.
This article originally appeared on Fortune.com.
