Corporate Coaching: Weighing the Internal vs External Decision

With the increasing popularity of internal coaching, I’m seeing a lot of external corporate coaches getting uncomfortable. Would they face more competition? Are companies applying coaching for the right reasons? Does an internal coach provide as much value as an external coach?  Having served on both sides of the fence as an external coach and an internal corporate coach, and now someone who helps global companies implement coaching programs, I’ve seen internal coaching go seriously awry when it’s done in isolation of certain factors.
Since the early 80’s when coaching became a formalized practice, the industry has moved a long way along the corporate coaching evolutionary curve. Business leaders initially viewed coaching as a version of “developmental counseling.” Today, coaching is recognized as a key lever in driving business outcomes and an integral component to organizational culture.  Internal coaching is starting to emerge as the next wave of coaching trends. It’s no surprise when you find out that $2 billion of our economy goes into the coaching industry.
There’s plenty of data indicating the positive impacts that coaching can have on employee engagement, retention, optimizing performance and building up the talent bench. The power of coaching is not in question. HOW you implement coaching is what needs to be carefully weighed against such factors as corporate culture, size of organization, role of the coach and the hierarchical proximity to the coachee.  If these aren’t taken into consideration, using internal coaches will simply be another exercise rather than a means to an end.
According to the recent 10th Annual Coaching Survey produced by Sherpa Coaching, LLC, “internal coaching is on the rise. …four years ago, just seven percent of coaches were internals. This year, that number has risen to ten percent. That may appear to be a modest increase, but it is a relative rise of over forty percent. The number of internal coaches signing on to take this survey has doubled in recent years.”
If you’re evaluating the merits of internal versus external coaching for your organization, here are some issues to consider based on my perspective as someone who has coached from both “sides.”
Potential advantages to internal coaching:
Cost savings — The company can save money by paying someone already on the books to conduct coaching.
Walking the talk – Bringing coaching in-house is a tangible demonstration that the company values employee development.
Convenience – It’s easier for employees to receive face to face coaching if the coach is nearby.
Growth — Employees have an opportunity to learn how to coach and share the learnings
Less burden on management – Managing an in-house coach can be less time-consuming and costly than overseeing an external, private coach.
Potential downsides to internal coaching:
Lack of trust — Coachees are less likely to trust a coach connected to an HR function. As a result, the coachee will be hesitant to divulge information that may be paramount to his/her success.
Worries about privacy – Confidentiality, a key practice of coaching ethics, can easily get compromised when coaches play multiple roles in the organization.
Limited viewpoint – Because internal coaches are part of the organizational culture, they may be unable to contribute an outside viewpoint that can be critical in helping the coachee gain perspective and insight into key issues.
Time conflicts — Internal coaches typically have competing priorities in their job, so coaching may come second or last.
Poor return on investment – Using individuals who have minimal coach training can dilute the brand and efficacy of coaching.
Not for high level executives – Research shows that only 13% of top line leaders are likely to use an internal coach.
If your company has made the decision to implement an internal coaching program, here are 10 guidelines that can help you avoid pitfalls and achieve your goals:
 Clarify the meaning of coaching and the boundaries around confidentiality among stakeholders.
Define roles and responsibilities of the coachee, the coachee’s manager, the coach and any other stakeholder.
Go out of your way to demonstrate transparency. For example, if a leader suggests coaching for a report, the coachee can share an area worked on with a coach and talk about how the dialogue helped them improve.
Create “small wins” to encourage those who are eager to grow and receive coaching.
Use only coaches certified by the International Coach Federation (ICF) or by an ICF-approved training organization.  This site is a good place to start your search for high quality, certified coaching resources.
Use coaches who are wholly dedicated to coaching or have coaching as their top priority.
Avoid designating internal coaches from the ranks of HR.
Maintain distance by not assigning a coach from the same facility as a coachee, if possible.
Design a method of measuring IOB (Impact on Business). At Right Management, we use robust analytics tools to measure the impact of coaching for clients and identify significant trends to inform future needs. There are other less technical but still effective approaches, such as interview-based research to gather qualitative data on program effectiveness.
Integrate internal coaching with external coaches. Use internal resources for lower level leaders and/or independent contributors, while dedicating external coaches to mid-level managers and above.