Executive coaching explained: when it works, what it costs, how to choose

Executive coaching is coaching for people in senior roles, usually paid for by their employer, and usually with three parties involved: the executive, the coach, and a sponsor such as the CEO or the head of HR. That third party changes everything about how you should buy it.

This guide explains what executive coaching is, when it works, what the research shows, how companies select coaches, what it costs, and how to set up an engagement so that everyone knows what success looks like.

What executive coaching is

An executive coach works one to one with a leader on how they lead: decisions, communication, relationships with the board and the team, and the transition into a bigger role. The coach is not a therapist, not a consultant and not a mentor, though the work borders on all three.

The sponsor matters. In a company-paid engagement, someone decided this leader should have a coach, and that person has expectations. Good engagements start with a three-way meeting where the executive, sponsor and coach agree on goals and on what the sponsor will and will not hear about.

When it works

Executive coaching works best in four situations: a transition into a larger role, a specific behavior that is limiting an otherwise strong leader, preparation for a defined event such as a board presentation or a merger, and the loneliness of the top job, where the leader has no one to think out loud with.

It works poorly as a remedy. In a 2009 Harvard Business Review survey of coaches by Diane Coutu and Carol Kauffman, most coaches reported that they were hired to develop high potentials or facilitate transitions, and only a small share said they were brought in to address a derailing behavior. Coaches in that survey also said that companies rarely measured results. If the real intent is to manage someone out, coaching is the wrong instrument and the coach should say so.

What the research shows

The evidence for workplace coaching is moderate and positive. A 2016 meta-analysis by Jones, Woods and Guillaume, covering 17 studies, found that coaching had a positive effect on outcomes for the people coached, with the strongest effects on skills and performance. The same review found that internal coaches produced effects comparable to external ones, and that using multi-source (360-degree) feedback did not by itself increase the effect.

Two cautions. The studies are few and mostly small. And "coaching works on average" says nothing about whether this coach will work for this leader. Use the research to justify the budget, not to skip the selection.

How companies select coaches

Large companies tend to keep a pool of vetted coaches and match executives to two or three candidates, who each hold a chemistry conversation with the leader before one is chosen. Smaller companies usually rely on a referral from the CEO's network or from the board.

Both approaches have a blind spot. Pools reward coaches who are good at being selected by HR; referrals reward coaches who are good at being liked by CEOs. Neither measures outcomes. Whatever the route, ask each candidate for two references from engagements that ended at least a year ago, and ask the references what changed.

Look for coaches who have worked at the level you are hiring for. A coach who has never sat in a board meeting will struggle with a CFO's board presentation.

What it costs

Executive coaching is the most expensive segment of the coaching market. Fees depend on the seniority of the client, the coach's track record and the country. In the United States and the United Kingdom, engagements for C-level and senior vice-president roles are commonly sold as six-month packages, and rates for established coaches are several hundred dollars per hour, with the total for six months often in the five figures. The ICF's Global Coaching Study documents how fees rise with experience and credential level.

Ask for the package price, the number of sessions, what happens between sessions, whether a 360-degree assessment is included, and how many sponsor meetings are built in. Compare total cost against the cost of the decision you are trying to protect: a failed senior hire, a stalled succession, a leader who leaves.

Setting up the engagement

A good setup has five written elements: goals agreed by executive and sponsor, a confidentiality rule that states what the sponsor will hear, a session rhythm, a mid-point review, and a closing review. Six months with sessions every two weeks is the common shape.

The confidentiality rule is the piece most often skipped. Write it down: the sponsor receives progress against goals, not the content of sessions. Without that rule, the executive will not say the things the coaching is for.

Questions to ask a candidate

1. Which levels have you coached, and in which kinds of companies?
2. How do you run the three-way meeting, and what does the sponsor receive?
3. Which assessments do you use, and why?
4. Two references from engagements that ended more than a year ago?
5. What do you do when the sponsor's goal and the executive's goal differ?
6. What would make you end an engagement early?
7. Which credentials, and who supervises your work?
8. What does six months cost, and what is included?