How should executive coaches respond when the role of business in society is contested?

By Martin Vogel

Indignant, in any language.
Indignant, in any language.

I’m looking forward to the APECS symposium on the future for executive coaching on 18th June. As part of a group working on the social and business context for coaching, I’ve submitted a discussion paper. I found it a useful opportunity to pull together the themes I’ve been developing at this blog over the past few years. I’ve been receiving a number of requests to access the paper even ahead of the symposium, so I’m posting it here with the following caveat: my thinking on this is a work in progress rather than my last word. Feedback, critical or otherwise, most welcome.

Anglo-Saxon capitalism is experiencing a shift in the socio-economic paradigm by which we organise ourselves. In the period after the Second World War, a consensus was established around social democracy, with its emphasis on welfare, corporatism and mitigating inequality. As this became dysfunctional, it was replaced by a consensus around free markets, managerialism and shareholder value which, itself, is now being called into question by systemic failure. What replaces it will be contested. It could be a more benign form of capitalism in which organisations accept responsibility for greater stewardship of the public realm or it could be something much closer to fascism or something else again. What role, if any, should coaches play in helping executives both to recognise the shift and to play a role in shaping a constructive outcome?

Dysfunctionality in the free market model came to a head with the banking crisis of 2008 which revealed a propensity to moral hazard (risks transferred to the public as banking elites appropriated the upsides) that brought the economy and social order to the brink of collapse. Since then, studies have called into question the notion that the rising tide of inequality lifts all boats. These have come not just from the leftish authors of The Spirit Level and, more recently, Thomas Piketty but from capitalist institutions such as the IMF, which has suggested that inequality is now a source of economic weakness because it undermines demand. A final aspect of dysfunctionality has been the tendency to pursue enterprise growth by adding scale through acquisitions rather than through innovation, thereby creating corporations that are too complex to manage. Managers end up with disproportionate rewards justified by the scale of their responsibility rather than by their effectiveness in the role.

Some other broad trends:

  • Collapse of deference – Consumers are increasingly irritated by overweening business interests and increasingly assertive of their disapproval (e.g. through boycotts and protests).
  • Accountability – Members of the public have unprecedented means to hold corporations to account. Social media has created an open and challenging communications culture in which it is increasingly difficult for corporations to escape censure if their behaviour falls foul of consumer sentiment. Consumer pressure on advertisers played an important role in convincing News International that the News of the World brand was sufficiently tainted to constitute a threat to its other business interests, resulting in its immediate closure. Accountability is also strengthened by whistleblowers who, if minded, can exploit IT to put massive volumes of compromising data into the public domain. The actions of Edward Snowden created a backlash not just for government security agencies but also the US technology firms that facilitated the agencies’ access to data.
  • Collapse of trust – If the financial crash precipitated an unease with the ethos of managerialism, this has been cemented by a litany of scandals covering public and private sector alike as well as institutions with widely differing values: press phone hacking; NHS hospital scandals; MPs’ expenses fraud; the BBC abuse scandal and the incompetence of its coverage of the same; the Co-op bank collapse and the failure of its governance systems; supermarkets and the food chain.
  • Austerity – Declining living standards have turned distrust of bosses and businesses into disaffection. Not only are executives seen to be awarding themselves disproportionate pay packages but doing so in the context of failure while the broader public experiences declining living standards. The 99 per cent remains a potent message even it the potential of protest around the message has not yet coalesced. Disaffection is particularly acute among the young – more so elsewhere in Europe than in the UK, but the riots of 2011 showed that it is not far beneath the surface here.
  • Globalisation – There is increasing tension between the objective, impersonal dynamics of the globalised economy and public sentiment for more socially-minded capitalism. Corporations are responding to the latter in small degrees – e.g. by bringing outsourcing back home or by voluntarily paying symbolic sums of corporation tax. But on the whole, capital remains beyond the accountability of national governments, which only exacerbates public disaffection. There’s a growing trend of geopolitical precariousness demonstrated in: the appeal of anti-democratic elements in the Euro area; the revolutions and unrest in Arab states; the current situation in Ukraine.
  • The hollowed-out state – Not only has the state withdrawn from vast areas of public provision but it is reluctant or unable to regulate on behalf of the public interest either. The welfare contract is rapidly being dismantled and spending on public services is the prime casualty of austerity. We rely on corporations to a much greater extent than in relatively recent memory but have little institutional mechanism for holding them to account. In some ways this contradicts the observation about social media accountability above, but it perhaps also explains why the public are more inclined to exploit these channels to take matters into their own hands.

Implications for coaching

What questions do these issues raise for us as coaches? Perhaps different questions for each of us as individuals. But I believe there are also challenges for us as a profession.

As coaches we tend to serve executives and their organisations, whose immediate interests broadly lie in the status quo. But the above analysis suggests that it is at least arguable that pursuit of their narrowly defined interests is contrary to the broader public interest and possibly to the long-term interest of the organisations which employ them. As APECS coaches, our adherence to professional values – in particular, those of beneficence, non-maleficence and justice – implies we have an orientation to the broader public interest. So who do we serve as coaches and in what way?

  • Do we serve our coachees as clients and work to their presenting agenda?
  • Do we serve coachees’ companies as clients and work to their presenting agenda?
  • Or do we serve society as the vessel of the professional values to which we subscribe and therefore introduce standards that may be outside the immediate frame of reference of either the coachee or the company?

What do we do as coaches? Can we find a way to help organisations be part of the solution to the problems described above by applying our coaching skills in new ways? What does it mean for our non-directive stance if we choose to challenge or not to challenge prevailing values? To put it another way, how should coaches respond if confronted with dysfunctionalities like those evident in Stafford Hospital, the News of the World or the Co-op?

In my view, we can square the circle by optimising our role as outsiders. We serve organisations best when we hold ourselves at some distance from their interests; like court jesters, licensed in ways that insiders aren’t to highlight the follies of corporate power.

But what about our contribution beyond the corporate sphere? Is there potential to move beyond the executive coaching model to serve society more broadly as a profession? Start-ups such as Cocomotion and Rising Minds are innovating with alternative approaches. But the business models for applying coaching to deliver social value aren’t yet clear. As a profession, can we raise our game in finding ways to apply our capabilities to broader social agendas and make the case for coaching itself to help address society’s big challenges?

Image courtesy Frankenschulz.