The case for measuring the influence of business coaching in Start-ups – fade or evolution?

As the world shifts towards a more global start-up ecosystem, we will also need to see adaptation of the learning channels for entrepreneurs and the start-up ecosystem by creating healthier and less risky startup business environments. Europe boasts more entrepreneurs per capita than the United States, a country generally taken as a benchmark for entrepreneurial excellence (OECD, Entrepreneurship at a Glance 2016).

The problem, however, is that European companies seldom grow to scale.

At BC Team Coaching, one of our verticals, is teaming-up with High Potential Start-Ups (HPSUs) crossing the chasm, mainly the commercialization valley of death from the financial cycle of Seed to early-stage Serie A funding or technology readiness levels 6-9 (commercial maturity).

In this ecosystem, a significant need among our HPSU clients is the transfer of skills, specifically business acumen and leadership in order to scale their innovation. Entrepreneurship requires multidisciplinary skills and competencies due to rapid market changes and competitive pressures and they depend upon the creation of a culture of continuous improvement and/or continuous learning conducive to reaching market performance indicators.

Most entrepreneurs begin their journey through pre-seed/seed funding incubators and VC readiness programme accelerators where the preferred adult learning channel has been ‘mentoring’ initiated from the desire to start up with their minimum viable product (MVP) whilst preparing their VC pitching deck. This learning channel is also magnified from the deal rooms and client portfolio with venture capitalists/GPs looking for their 10X returns.

Mentoring is usually defined as a formal process of advice or support given by a person who has experience and knowledge to another person who is lacking in such experience and knowledge with research telling us both mentoring and coaching are useful as a support function for entrepreneurs however with distinct learning functions.

Over the years business coaching as a profession, has emerged from a combination of various fields such as adult learning and development, business and change management, psychology, systems thinking, consulting….etc. By its nature, the systemic approach of business coaching contrasts with executive coaching, which concentrates on individual performance and does not necessitate executive coaches having business experience.

As a Master Certified Coach (MCC) I follow the International Coach Federation (ICF) definition of coaching as ‘partnering with clients in a thought-provoking and creative process that inspires them to maximize their personal and professional potential’ and this needs to be differentiated from the problem-solving functions of consulting or structured ‘advice’ from subject matter experts downloading such as mentoring.

In the entrepreneurial context there is seldom a separation between management and leadership responsibilities, which is why entrepreneurial development initiatives should aim to develop entrepreneurs to face their unique challenges in order to cross the famous ‘valley of death’.

Executives learn through experience and making sense of their experience through reflection and whilst there is a lot of similarities and confusion between the two modalities, at BC Team Coaching due to the unique nature of the start-up ecosystem, we use a hybrid directive/non-directive learning approach.

The coaching model(s) or process that the business coach uses is often selected based on what is familiar to the coach and at BC Team coaching we have been using a holistic-systemic coaching approach based on Integral leadership, working at the inner/outer individual levels with senior team members (I - Consciousness/IT – Leadership Competencies), the senior leadership team (WE - Culture) and the wider organisation (ITS - Systems).

The model is based on the interdependencies and balance between all the quadrants for the firm to scale (Founder and Leadership Team; Product/Service and Business Model; Go to Market Strategy and Sales Cycle Traction….)

In other words, if one quadrant is unbalanced the whole system could be impacted such as the inner self mental emotional growth (I – Consciousness) of the CEO/founder - fear of not being good enough, fear of failure impacting the (IT – Leadership competencies) the visible behavioural doing mode of risk-taking, influencing stakeholders…etc leading to lack of trust in the leadership team dynamic tensions (WE - Culture) and lack of funding or strategic alignment (ITS - Systems). For TRUE learning and unlearning to take place and integrate at an unconscious level, an important emphasis is on how the problem is solved and not on the outcome.

With this framework we transform intangibles into tangibles enabling the system to see from the whole with new lenses (see HPSU recommendations on LinkedIn or download our free 63-pages eBook - How to unlock successful scale-up growth or buy the Audiobook.

Our main preferred adult learning channel remains coaching at the individual and team levels because of its overwhelming transformational results in assisting our clients to uncover their own knowledge and skills, whereas we guide, share and mentor them with scaling tools on their external systems quadrants – the comfort zone of the accelerators ecosystems. Coaching is a unique conversational space where whole hearted conversations take place for unspoken and maybe unknown wants, desires and change.

A challenge for the founder/entrepreneur is to shift from doing the work to getting things done through others, and to allocate time to think about the future of the business as most entrepreneurial ventures fail because of a lack of business knowledge or learning, poor planning, a lack of appropriate skills, poor management or inability to reach goals…etc (see Pain in Framework i.e. team performance cycle).

As a professional coach, it is important for us to remember we must coach the Whole Person, moving from the who to the what, and be adept at listening at a deeper level. We must be comfortable holding space for those who are conflicted, and we must also be aware of our own inner conflicts and biases so as to keep that space clear for powerful coaching. The best results for this modality are achieved in the UL/UR quadrants of the I-Consciousness and through performance coaching at the IT - leadership competency level.

At the (WE - Culture) level pending on the scope of the engagement we practice team coaching providing we are collaborating with all senior team members or team facilitation (focusing on clarity and facilitating dialogue) if we’re only coaching the CEO at the individual level.

(Source ICF Team Coaching competencies)

In conclusion, we coach in three dimensions the personal – interpersonal and impersonal - the skills leadership development process (IT) combined with inner-growth (I) and ultimately (ITS – process efficiencies/ OKRs) to improve organisational growth and firm performance through leadership DAC alignment (Direction – what the team wants to achieve together – Alignment – coordinated work achievements and Commitment) from mentoring and coaching.

As coaching is highly experiential, we know that 70 percent of the learning journey happens on the job, 20 percent through mentoring and 10 percent through training. The effectiveness of organisational learning is the most important competitive advantage for all organisations and, as organisational environments change faster, so the rate of learning must increase.

At its core, our work can be summed up as improving the IRL ‘investment readiness’ especially management or team readiness and consequently about company enhancement and growth knowing research states that Leadership has a 10 to 15% impact on financial performance and a 25 to 30% impact on market valuation.

This is not a quick fix, takes time due to its transformational nature, and as the VC ecosystem slowly shifts from an industry solely aimed at financial gains to one that works towards a positive outcome for people, planet and profits, we are still in the learning process, trying to figure out the best learning journey for entrepreneurs.

In order to achieve the best results, we are open to hearing from other Scaleup accelerators, VCs and engaging in a discussion related to this learning journey.

Thank you for reading this article.