The Hidden Benefits of a Coaching Culture

The Hidden Benefits of a Coaching Culture

By | November 11, 2019

How a coaching culture helps build trust, engagement, and empowerment

The financial benefits of a coaching culture are well-documented. In one study, 51% of organizations with a strong coaching culture reported revenue above their industry peer group, versus 38% of organizations without a strong coaching culture.

Given the potential for increased performance, it is no surprise that organizations are embracing coaching culture — a 2017 industry survey showed one in four organizations has a strong coaching culture, representing almost a 50% increase from the year before.

But there is another benefit of building a coaching culture. One that research indicates is at least as impactful at driving employee performance: building trust.

What is a coaching culture?

A coaching culture is one in which coaching is viewed as a key strategy to achieve goals, high performance, and organizational results. A coaching culture is characterized by:

  • Regular, organic feedback conversations
  • Discussion of (and learning from) both failures and successes
  • Emphasis on growth and development
  • Greater self-awareness for individuals
  • Distribution of accountability
  • Accessibility over hierarchy

Building a coaching culture requires leaders to spend a significant amount of time having coaching conversations — managers and leaders in organizations with strong coaching cultures spend, on average, 28% of their weekly time coaching. Those conversations are central to solving a key challenge.

Companies have a trust problem

Employees don’t trust their leaders. According to Gallup, just one in three employees trust the leaders of their organization. That lack of trust is impacting engagement, loyalty, retention, and productivity.

45% of people say lack of trust in leadership is the biggest issue impacting their work performance.

Although employee engagement is at 34%, the highest it has been in a decade, 66% of employees are still not engaged or actively disengaged, costing their employers up to $500 billion annually in productivity losses.

With unemployment at historic low and Baby Boomers exiting the workforce at a pace of 10,000 per day, there is unprecedented competitiveness in the recruiting landscape. That means if employees aren’t happy, there’s nothing stopping them from moving on. Only 30% of employees say they are loyal to their company. 42 million employees left their jobs in 2018, costing employers $600 billion in direct turnover costs. 32% of employees plan to change jobs this year, and 43% said they would leave their companies for just a 10% pay increase somewhere else.

How can organizations build trust between leaders and their subordinates? By building a coaching culture.

How a coaching culture builds trust

Building a coaching culture requires reducing the power distance between leaders and employees. To make a coaching culture work, leaders must be transparent about their successes and failures, and be willing to accept feedback up the ladder. Employees, for their part, must be transparent about their successes and failures, and must be empowered to share feedback with their superiors without fear of retribution.

These conditions require trust, and what psychologist Amy Edmondson described as psychological safety — the extent to which leaders and employees feel safe to take risks and be vulnerable in front of each other.

Google’s two-year study of its teams showed that psychological safety was the single most important factor impacting performance. Individuals on teams with higher psychological safety were more engaged. That engagement, in turn, leads to better performance. Gallup showed that business units with engaged employees experienced:

  • 41% lower absenteeism
  • 17% higher productivity
  • 10% higher customer metrics
  • 20% more sales and
  • 21% greater profitability

At Google, people on high-psychological safety teams were less likely to leave the company, brought in more revenue, and were rated as effective twice as often by executives.

Psychological safety is more readily achieved through a coaching culture. If an organization’s culture is built around sincere, constantly circulating dialogue and feedback, regardless of level, employees inevitably feel more valued, empowered, heard, and respected. Increased trust and employee engagement is a direct byproduct of this type of environment.

The Ties That Bind Us

Building a coaching culture requires that leadership embody the concept first. If it is not emanating from leaders, the culture can never truly become embedded, nor common practice. While building a coaching culture requires an investment of time and intention, ultimately, it will save companies time, money, and headaches while accelerating growth, employee engagement, and bolstering the underpinning of any relationship: trust.

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