Positive change through a coaching leadership style

Great businesses are built by great teams.

The people in any business are vitally important; however, the style and effectiveness of leadership will almost certainly dictate the success of that team.

The top-down leadership style of the past is increasingly being replaced by a coaching approach that supports employees in overcoming challenges, innovating and contributing to the team, and developing professionally and personally.

But what is a coaching leadership style, and what difference could it make to your business?

What is a Coaching Leadership Style

A coaching leadership style takes a longer-term view, focusing on developing the individual as a whole person, rather than just the employee through the proper guidance and support. A leader who coaches their team encourages ongoing personal learning and inspires accountability as well as a stronger sense of self-awareness.

Leaders who adopt this approach coach and mentor their team, empowering them to grow and perform at their best.

A coaching style of leadership is about asking the right questions to encourage reflection, thought, and problem-solving and inspires ownership and action.

The days of telling people what to do and how to do it in that traditional authoritative approach have been replaced by a world where diversity of thought and celebrating the strengths and challenges of your team is encouraged.

The history and evolution of coaching leadership

Over the years, coaching leadership styles have found their way into the world's boardrooms from the fields, tracks and pools of the sporting arena, where for many years, athletes have relied on the insight and support of their coaches to achieve their goals.

Often less prescriptive than some sports coaching, leadership in the business world, as outlined by the likes of Peter Drucker, who was focused on 'management by objectives', has evolved to become a journey of self-development, creative problem-solving, and flexible critical thinking, which are essential for modern leaders.

As access to different markets has opened up through the globalisation of trade, the challenges organisations face have become more complex. Inspiring innovation and encouraging leadership from within the team is essential to compete. It shares the burden and builds incredible resilience throughout your organisation.

A coaching style is no longer a nice to have; it's a necessity.

Why coaching leadership is the future

A coaching leadership style has a considerable impact on employee retention.

We know that employees who feel valued, where their contribution is heard, where personal development is encouraged, and where they feel inspired to take ownership are considerably more likely to stay with the company.

According to the International Coaching Federation, a coaching approach to leadership increases the chances of retaining your leading employees by 70%.

This leadership style also aligns with the demands of modern employees, especially millennial's and Gen Z, who seek purposeful work and personal development.

Many felt a mentoring and coaching approach would help them develop the adaptability and resilience required. 

Moreover, a coaching leadership style supports a culture of continuous learning and improvement. In a 2023 report by the World Economic Forum, the most in-demand leadership skills included empathy, active listening, and the ability to coach and mentor. Leaders who embody these qualities will be better positioned to navigate future challenges and lead their organisations to success.

Key characteristics of a coaching leader

To better understand what sets a coaching leader apart from other leadership styles, let's delve into some defining characteristics:

1. Empathy and emotional intelligence: A coaching leader understands their team's emotions and perspectives. They know how to communicate effectively, offer support when needed, and handle conflicts sensitively.
2. Active listening: Coaching leaders prioritise listening to their team members rather than jumping in with answers. They attempt to get to the root cause of an issue by asking open-ended questions that encourage a journey of problem-solving.
3. Focus on development: As a coach, your role is to help your employees grow as whole people by acquiring the right skills and attributes. This often involves setting long-term development goals and providing ongoing feedback.
4. Encourages self-reflection: Taking time to reflect on your performance is central to a coaching style. It encourages employees to take responsibility for their own personal development by identifying areas for improvement.
5. Builds trust: Coaching leaders build trust and foster a positive work environment by showing genuine interest in their team's growth and transparency in their communication.

How to implement a coaching leadership style

Transitioning to a coaching leadership style involves a shift in mindset. We've outlined seven strategies to help you develop a coaching leadership style:

1. Active listening: Successful coaching leaders actively listen to their team members. This creates a culture of trust and opens the door for meaningful conversations about challenges and opportunities. Listening helps leaders understand individual strengths, motivations, and development areas.
2. Asking open-ended questions: Rather than providing solutions, ask questions encouraging team members to think critically and develop their own answers. For example, instead of saying, "Do it this way," ask, "What approach do you think would work best in this situation?"
3. Offering constructive feedback: Feedback should be a two-way street. Coaching leaders provide constructive and supportive feedback aimed at helping individuals grow. Use the honest, direct and timely feedback, taking a caring approach for the individual and how they will hear this while making sure it is heard and understood and the way forward is clearly agreed upon.
4. Encouraging self-reflection: Encourage employees to reflect on their progress and areas for improvement. This helps them take ownership of their development. Self-reflection exercises like journaling or regular check-ins will help them identify action plans and become more self-aware.
5. Setting developmental goals: Collaborate with team members to ensure your SMART goals align with their career aspirations and the organisation's objectives.
6. Creating a safe space for learning: A coaching leader creates a situation where team members feel comfortable taking risks and owning mistakes, actively encouraging the learning that comes from these actions. This approach helps build confidence and resilience.
7. Promoting peer coaching: Encouraging team members to coach each other is a fantastic way to share knowledge and foster a collaborative culture.

The business benefits of a coaching leadership style

Businesses that adopt a coaching leadership style often see significant improvements in employee performance and engagement. Leaders who coach effectively build stronger team relationships, leading to higher morale and a collaborative work culture and can build real psychological safety.

According to a report by McKinsey, companies that invest in leadership coaching see a 30% increase in overall performance.

Not only does this leadership style improve internal dynamics, but it also leads to better business outcomes. High-performing teams are more likely to innovate, meet goals, and deliver superior results to clients. A coaching leadership style can also reduce employee burnout by creating a more supportive work environment where employees feel heard and valued.

Furthermore, the return on investment (ROI) for coaching leadership is substantial.

In research from the International Coach Federation (ICF), it was found that organisations with strong coaching cultures have employees who are 46% more likely to report being highly engaged and 61% more likely to view their leadership team as effective.

Examples of Coaching Leadership in Action

Some of the world's most successful companies, including Google, Microsoft, and IBM, have embraced coaching leadership to drive their teams forward.

For instance, Google's Project Oxygen study found that its most effective leaders are those who exhibit coaching skills, such as listening, mentoring, and supporting employee development.

As a result, Google has made coaching a core competency for its leaders and provides extensive training in coaching skills.

IBM has also integrated coaching into its leadership development programs. By focusing on a coaching culture, the company has boosted innovation and employee satisfaction while adapting more quickly to changing market conditions.

Conclusion

Adopting a coaching leadership style is a long-term investment in your people and your business.

Leaders can build stronger, more resilient teams by focusing on personal development, fostering a culture of feedback, and empowering employees to take initiative. As the workforce evolves, businesses that embrace coaching leadership will be best positioned for success.

Implementing this leadership style may require time and effort, but the rewards—increased employee engagement, improved performance, and higher retention—are well worth it. Adopting a coaching leadership style could be the key to unlocking your team's full potential if you want to build a high-performing team that thrives in today's dynamic business environment.