Our “Pay for Results” Executive Coaching Process

by Marshall Goldsmith

My mission is to help successful leaders achieve positive, long-term, measurable change in behavior: for themselves, their people and their teams. When the steps in the coaching process described in these posts are followed, leaders almost always positive behavioral change — not as judged by themselves, but as judged by pre-selected, key stakeholders. This process has been used around the world with great success — by both external coaches and internal coaches.1

Our coaching network (Marshall Goldsmith Group) provides coaches for leaders from around the world. All of the coaches in our network use the same proven process. At the beginning of our coaching relationship, we get an agreement with our coaching clients and their managers on two key variables:

– What are the key behaviors that will make the biggest positive change in increased leadership effectiveness, and

– Who are the key stakeholders that can determine (six to eighteen months later) if these changes have occurred.

We then get paid only after our coaching clients have achieved positive change in key leadership behaviors — and become more effective leaders — as determined by their key stakeholders.

I believe that many leadership coaches are paid for the wrong reasons. Their income is a largely a function of “How much do my clients like me?” and “How much time did I spend in coaching?” Neither of these is a good metric for achieving a positive, long-term change in behavior.

In terms of liking the coach, I have never seen a study that showed that clients’ love of a coach was highly correlated with their change in behavior. In fact, if coaches become too concerned with being loved by their clients. They may not provide honest feedback when it is needed.

In terms of spending clients’ time — my personal coaching clients’ are all executives whose decisions impact billions of dollars — their time is more valuable than mine. I try to spend as little of their time as necessary to achieve the desired results. The last thing they need is for me to waste their time!

Qualifying the Coaching Client: Knowing When Behavioral Coaching Won’t Help

Since we use a “pay only for results” coaching process, we have had to learn to qualify our coaching clients. This means that we only work with clients that we believe will greatly benefit from our coaching process.

We do not work with leaders who are not really motivated to change. Have you ever tried to change the behavior of a successful adult that had no interest in changing? How much luck did you have? Probably none! We only work with executives who are willing to make a sincere effort to change and who believe that this change will help them become better leaders. Our most successful coaching clients are executives who are committed to being great role models for leadership development and for living their company’s values.

I have personally worked with several of the world’s leading CEOs. One reason that they are so effective in leading people is that they are always trying to improve themselves — not just asking everyone else to improve. Our best coaching clients are dedicated to be great role models in consistently working to improve themselves.

Some large corporations “write people off.” Rather than just fire them, they engage in a pseudo-behavioral coaching process that is more “seek and destroy” than “help people get better.” We only work with leaders that are seen as potentially having a great future in the corporation. We only work with people who will be given a fair chance by their management. We do not work with leaders who have been “written off” by senior management.

There are several different types of coaching. We only do behavioral coaching for successful executives — not strategic coaching, life planning, or organizational change. I have the highest respect for the coaches that do this kind of work. That is just not what our coaches do. Therefore, we only focus on changing leadership behavior. If our clients have other needs, we refer them to other coaches.

Finally, I would never choose to work with a client who has an integrity violation. We believe that people with integrity violations should be fired, not coached.

When will our approach to behavioral coaching work? If the issue is leadership behavior, the coaching clients are given a fair chance and they are motivated to improve, the process described in these posts will almost always work. If these conditions do not exist, this process should not be used.

Involving Key Stakeholders

In my work as a behavioral coach, I have gone through three distinct phases.

In phase one – I believed that my clients would become better because of me. I thought that the coach was the key variable in behavioral change. I was wrong. We have published research on leadership development that involved input from over 86,000 respondents2. In our research we have learned that the key variable for successful change in leadership behavior is not the coach, teacher or advisor. The key variables that will determine long-term progress are the leaders being coached and their co-workers.

I learned this lesson in a very humbling way. The client that I spent the most amount of time with did not improve and I did not get paid! This was a painful reminder to me that I was not the key variable in my clients’ improvement.

The client that I spent the least amount of time with improved more than anyone I ever coached – and he was great to start with! He was later recognized as the CEO of the Year in the United States.

When I asked my ‘most improved’ client, what I could learn about coaching from him, he taught me a great lesson. He told me that I needed to: 1) pick the right clients and 2) keep the focus of my coaching on my clients and their teams (not my own ego and need to prove how smart I was).

In phase two – I spent most of my time focusing on my coaching clients. I slowly learned that a motivated, hard-working client was more important than a brilliant coach! I learned that their ongoing efforts meant more than my clever ideas. My results improved!

In phase three (where I am now) – I spend most of my time not with my coaching client but with the key stakeholders around my client. I focus on helping my clients learn from everyone around them. By making this change, my clients’ results have improved even more dramatically3.

How do I involve key stakeholders? I ask them to help the person that I am coaching in four critically important ways:

– Let go of the past. When we continually bring up the past, we demoralize the people who are trying to change. Whatever happened in the past – happened in the past. It cannot be changed. By focusing on a future that can improve (as opposed to a past that cannot improve), the key stakeholders can help my clients achieve positive change. (We call this process feedforward, instead of feedback.4)

– Be helpful and supportive, not cynical, sarcastic or judgmental. As part of our coaching process, my clients involve key co-workers and ask them for help. If my clients reach out to key stakeholders and feel punished for trying to improve, they will generally quit trying. I don’t blame them! Why should any of us work hard to build relationships with people who won’t give us a chance? If my clients’ co-workers are helpful and supportive, my clients’ experience increased motivation and are much more likely to improve.

– Tell the truth. I do not want to work with a client, have him or her get a glowing report from key stakeholders, and later hear that one of the stakeholders said, “He didn’t really get better, we just said that”. This is not fair to my client, to the company or to me.

– Pick something to improve yourself. My clients are very open with key stakeholders about what they are going to change. As part of our process, our clients ask for ongoing suggestions. I also ask the stakeholders to pick something to improve and to ask my client for suggestions. This makes the entire process “two-way” instead of “one way”. It helps the stakeholders act as “fellow travelers” who are trying to improve, not “judges” who are pointing their fingers at my client. It also greatly expands the value gained by the corporation in the entire process.5 In one of my most successful case studies, I was asked to coach one top executive – and about 200 people ended up improving.

Steps in the Leadership Coaching Process

The following steps describe the basics of our behavioral coaching process. Every coach in our network has to agree to implement the following steps. If the coach will follow these basic steps, our clients almost always achieve positive change!

Involve the leaders being coached in determining the desired behavior in their leadership roles.
Leaders cannot be expected to change behavior if they don’t have a clear understanding of what desired behavior looks like. The people that we coach (in agreement with their managers, if they are not the CEO) work with us to determine desired leadership behavior.

Involve the leaders being coached in determining key stakeholders.
Not only do clients need to be clear on desired behaviors, they need to be clear (again in agreement with their managers, if they are not the CEO) on key stakeholders. There are two major reasons why people deny the validity of feedback: wrong items or wrong raters. By having our clients and their managers agree on the desired behaviors and key stakeholders in advance, we help ensure their “buy in” to the process.

Collect feedback.
In my coaching practice, we personally interview all key stakeholders to get confidential feedback for our clients. The people who I am coaching are all CEOs or potential CEOs, and the company is making a real investment in their development. This more involved level of feedback is justified. However, at lower levels in the organization (that are more price sensitive), traditional 360° feedback can work very well. In either case, feedback is critical. It is impossible to get evaluated on changed behavior if there is not agreement on what behavior needs to be changed!

Reach agreement on key behaviors for change.
As I have become more experienced, my approach has become simpler and more focused. I generally recommend picking only 1-3 key areas for behavioral change with each client. This helps ensure maximum attention to the most important behavior. My clients and their managers (unless my client is the CEO) agree upon the desired behavior for change. This ensures that I won’t spend a year working with my clients and have their managers determine that we have worked on changing the wrong behavior!

Have the coaching clients respond to key stakeholders.
The person being reviewed should talk with each key stakeholder and collect additional “feedforward” suggestions on how to improve on the key areas targeted for improvement. In responding, the person being coached should keep the conversation positive, simple, and focused. When mistakes have been made in the past, it is generally a good idea to apologize and ask for help in changing in the future. I suggest that my clients listen to stakeholder suggestions and not judge the suggestions.

Review what has been learned with clients and help them develop an action plan.
As was stated earlier, my clients have to agree to the basic steps in our process. On the other hand, outside of the basic steps, all of the other ideas that I share with my clients are suggestions. I just ask them to listen to my ideas in the same way they are listening to the ideas from their key stakeholders. I then ask them to come back with a plan of what they want to do. These plans need to come from them, not me. After reviewing their plans, I almost always encourage them to live up to their own commitments. I am much more of a facilitator than a judge. My job is to help great, highly motivated, executives get better at what they believe is most important — not to tell them what to change.

Develop an ongoing follow-up process.
Ongoing follow-up should be very efficient and focused. Questions like, “Based upon my behavior last month, what ideas do you have for me next month?” can keep a focus on the future. Within six months conduct a two-to-six item Mini-Survey with key stakeholders. They should be asked whether the person has become more or less effective in the areas targeted for improvement.

Review results and start again.
If the person being coached has taken the process seriously, stakeholders almost invariably report improvement. We then build on that success by repeating the process for the next 12 to 18 months. This type of follow-up will assure continued progress on initial goals and uncover additional areas for improvement. Stakeholders almost always appreciate follow-up. No one minds filling out a focused, two-to-six-item questionnaire if they see positive results. The person being coached will benefit from ongoing, targeted steps to improve performance.

End the formal coaching process when results have been achieved.
Our goal is not to create a dependency relationship between coach and client. While I almost always keep in touch with my coaching ‘graduates’ for the rest of their lives, we do not have an ongoing business relationship.

1For a study on the effectiveness of this process with internal coaches in GE Financial Services, see “Leveraging HR: How to Develop Leaders in ‘Real Time’, in Human Resources in the 21st Century, M. Effron, R. Gandossy and M. Goldsmith, eds., Wiley, 2003. 2“Leadership is a Contact Sport”, H. Morgan and M. Goldsmith in Strategy+Business, Fall 2004 (re-published in Fall 2010 as one of nine outstanding articles in the history of the journal). 3This process is explained in more detail in “Recruiting Supportive Coaches: A Key to Achieving Positive Behavioral Change” in The Many Facets of Leadership, M. Goldsmith, V. Govindarajan, B. Kaye and A. Vicere, eds., FT Prentice Hall, 2003. 4“Try Feedforward, instead of Feedback” originally published in Leader to Leader, Summer 2002. 5For a great description of the impact of co-workers’ focusing on their own improvement, read “Expanding the Value of Coaching: from the Leader to the Team to the Organization” in The Art and Practice of Leadership Coaching, H. Morgan, P. Harkins and M. Goldsmith, eds., Wiley, 2004.





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