In a recent CEB survey related to talent issues, we examined the competencies and skills of 2,200 finance staff at over 75 global organizations in 48 countries. The research found that 87% of finance department heads feel that their teams lack the competencies needed to drive effective department performance.
There is a clear need for managers to reinvent both their hiring strategies and interviewing techniques. But a more pressing question for managers already staffed at full capacity is how to develop their staff to close skill gaps.
It’s critical to focus your training and development (T&D) efforts but it’s extremely hard to know which development interventions have the maximum impact. Thus, most organizations adopt a variety of programs to develop their staff – more is often considered better.
Primacy of coaching
Our analysis debunked this theory. We found that coaching is the single largest driver of competency improvement, with 51% of finance staff surveyed saying so. The chart below shows the outsized impact that coaching has on finance competency improvement. It is much more effective than traditional one-size-fits-all functional training programs or leadership development programs and also rotations.
Coaching as key driver of competence
Several organizations do realize the value of coaching, but they fall prey to three common “myths” about effective coaching:
- It requires more time
- It should happen ‘off the floor’ in a distraction-free environment
- Any attention is good attention
Consequently, well-intended organizations often fall into common traps of simply doing “more” (more time, more structure, more feedback) when they are asked to improve the effectiveness of their coaching programs.
So, we went deeper to examine the effectiveness of the types of finance coaching activities on competency improvement. What we found was quite surprising – not all coaching activities are created equal.
While you may think that going through a project list or providing performance feedback qualify as high-quality coaching interactions, what matters most is providing professional guidance to staff in order to drive their professional growth. Professional advice makes a contribution of 33% to staff competency development (see chart below), but it is often underplayed during coaching interactions.
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Professional advice: Most effective coaching activity
There is a clear takeaway for CFOs and their finance teams here. When engaging in coaching, managers should spend the most time providing this impactful career guidance (i.e. advice about how subordinates can advance in their professional career), followed by discussing day-to-day challenges and then teaching new skills.
There are other activities that help improve staff behaviors on the hard-to-train competencies. They include sharing personal professional experiences, providing narrative-based advice using stories, analogies and tangible examples and helping staff expand their professional networks.
Finance talent leaders in the Asia Pacific region are especially sensitive to this finding because they are part of globally dispersed teams and often have to wear many hats across finance functions. Additionally, they have to ‘work their matrix environment’ and often rely on personal networks to get their job done.
Providing professional advice and guidance plays a key role in these situations by helping staff overcome work challenges and learn from their peers to better engage the business, demonstrate more credibility and increase their efficiency.
Our work uncovered a best practice from a pharmaceutical company with more than US$20 billion in revenues. The company’s Asia-Pacific CFO emphasized the use of narratives to help internalize coaching. Narrative-based learning has an emotional appeal that can transform professional behaviors. Thus, the CFO personally uses narratives to make coaching advice actionable, interesting, and memorable for finance staff.
He uses four key levers to maximize coaching impact:
- First, he leads by example through personal, one-to-one interactions that help him develop an understanding of the coachees’ key issues.
- Second, he uses analogies that make it easier for the coachee to understand and internalize behavior change.
- Third, he asks questions that increases the coachee’s self-awareness and improves the CFO’s understanding of the staff’s coaching needs.
- Fourth, he analyzes past successes to provide benchmarks for good performance and provide a success-formula for the coachee to replicate.
Another organization with large operations in Asia and US$10 billion in revenues worldwide asked its regional CFO to accompany key staff on their business trips to create powerful coaching moments.
The CFO handpicks country finance leaders (high potentials two to three levels below him, with clear development needs) and shadows them on international field visits. The CFO’s coaching focuses on competencies that are hard to observe in a day-to-day setting (e.g., persuasion, business awareness). He then ensures sufficient post-travel interactions with the coachee to maintain the development process and personal relationship.
As you think about allocating your own scarce time, how you should optimally work and guide your teams, and how to work with HR business partners to develop finance staff, focus on coaching activities that are more oriented toward professional advice and helps staff understand (often through personal stories and narratives) how they can overcome work challenges.
Good coach, not-so-effective coach
There’s no ideal checklist to follow, spreadsheet to fill out, or time to spend to ensure coaching is productive. With this in mind, we’ve identified a framework that differentiates the effective coaches from the not-so-effective ones.
Please note that this isn’t a prescriptive, iterative list that you must follow to become good. It’s simply a set of guidelines that, if implemented, drives better, more productive coaching.
Good coaches clearly define what good coaching means. Coaching manifests in different ways, from project check-ins, to performance feedback conversations, to mentoring. Our research showed that the most common types of coaching at organizations (project review and project feedback) are actually the least valuable. The coaching activities that truly drive skill development include providing professional advice, mentoring, and resolving work-related challenges.
Good coaches tailor coaching to different personality styles. Individual staff members have different learning preferences. They absorb information differently and respond to stress differently. Supervisors need to tailor coaching delivery to their staff’s personalities and learning styles to enable more productive sessions. One size does not fit all.
Good coaches balance time spent on scheduled vs. in-the-moment coaching. The most effective coaching format is one that is integrated into the employees’ day to day workflow. You don’t need a conference room and a one-hour appointment to coach. The most effective coaching efforts include on the job coaching in real-time situations.
Good coaches ensure steady coaching progress. The coach who maintains a healthy relation with direct reports is better positioned to generate desired skills and performance improvements from their staff members. Measuring coaching efforts and comparing them with your peers helps to better understand performance issues to take timely corrective actions and to keep coaching progress on track.
Finally, here is a foundational list of things to keep in mind before your next coaching interaction.
- Build coaching receptivity by outlining a common definition of coaching and its benefits to your team.
- Coach the core for performance and the stars for retention.
- Spend between four and five hours of coaching per staff member per month.
- Be prepared. Plan adequate and appropriate time for coaching and coaching prep.
- Build trust with your direct reports by showing your dedication to improving their results.
- Tailor coaching style to the individual.
- Give feedback in person and as close to the event as possible.
- Limit feedback. Focus on one to two key areas to avoid overwhelming staff.
- Use questions to discover root causes of performance challenges and gain staff buy-in on improvement options.
About the Author
Kruti Bharucha is Senior Director at CEB, a US-listed research and advisory firm that boasts 85% of Fortune Global 500 companies as clients and/or network members.
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