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What should executive leaders focus on to improve corporate performance?

Performance is everything to a company. Whether its sales growth, revenues, EBITDA or cash—these are the bottom line goals that chief executives, chief operating officers and shareholders focus on. But we all know an organization’s people are its foundation and the key to its success. This is why companies invest in their employees and provide technical, skills-based and leadership training, together with other professional development activities.

I used to work for a large aerospace and defense firm where identifying high-potential engineers and staff employees was critical for their leadership growth and succession plans. The company invested heavily in these employees—establishing programs for their growth and development, spending a significant amount of money and devoting senior executives’ time in mentoring and training these employees. But after they received this training, little was done to ensure continued success and additional support. Many of these employees either left the company or were placed in positions where they weren’t supported or destined to fail. The result? Turnover and performance issues were a drag on the success of the company and even the company’s reputation in the industry.

So what should the firm have focused on to retain stellar performers and ensure future success?

A growing practice in many companies is to have a robust executive leadership coaching program. A study of Fortune 500 companies found 21-40% utilize executive coaching as a way to develop leaders and talented up-and-comers. And according to an International Coach Federation’s study, the median company return for executive coaching programs was 700%—with almost one fifth of respondents reporting a return on investment of at least 50 times (5,000%) their initial investment.

It’s clear executive coaching improves leadership development, retention and return on investment. But what makes executive coaching successful in terms of improving the performance of an executive or an executive team? We explored a very simple formula while I studied at Georgetown University’s School of Transformational Leadership.

The formula was created by Tim Gallwey, a longtime coach who pioneered the study of personal and professional excellence in a variety of fields. He wrote the Inner Game series of books (2009 Random House) where he highlighted the interference of the inner self and its effect on human performance. The formula is expressed in a simple equation: P = p – i. This is defined as the quality of our performance (P) is equal to our potential (p) minus the interference (i).

A person’s ability to perform at their desired Performance level (technical, leadership, learning, growth etc.) is equal to their ultimate potential minus that which interferes with that potential (internal issues, negative self-talk, difficulties in the workplace, communication challenges, etc.). Coaching is directly aimed at working through the "interference," and if you can help a client see the interference in the challenges they’re addressing, you’re truly on a path to removing the interference and improving the level of performance.

Leadership coaching is a creative partnership whereby the organization’s inspired to maximize their personal and professional potential. It’s a transformative process that leads to growth. Its focus is to help people improve their performance and enhance the quality of their lives. Is there anyone in corporate America who’s not been personally involved in situations where their own "interference" (or that of others) affected their potential—and ultimately their performance—as an individual or team? Reducing the interference through effective coaching is key to unlocking the maximum potential of executives and executive teams.

The success of a company or organization, whether it’s a for-profit or not-for-profit organization, resides in maximizing the potential of their people and improving their performance.

Robert Wood is an advisor to the aerospace, defense and security industries at PA Consulting Group. He specializes in corporate strategy, winning competitive programs and executive leadership coaching. He is a member of the International Coach Federation.

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