Coaching to Influence the Boss

One lesson I learned in writing is that case studies help to illuminate the point the author is trying to convey. This is why I use case studies as illustrations of the points I want to make about coaching. Each case is a real-life example of a coach, a coachee, and a situation that the coachee is trying to cope with.

This blog post will focus on how to influence the person to whom the coachee reports. I often hear executives ask, “How do I tell my boss something he or she may not want to hear?”  This can be a challenge because many organizations are hierarchical, and the coachee is often torn between giving honest feedback and taking the risk of upsetting the person(s) to whom he or she is accountable.

I will write about two “hired gun” CEOs who tried to influence their boss/business owners. The results were very different, and the reasons why will reveal important lessons to be learned. These lessons also can apply to boards of directors or anyone in the organization that an executive reports to.  From a coaching perspective, the success of the coachee will depend on the cooperation and alignment of the boss/business owner.  It is important to be able to communicate up the hierarchical ladder in order to be in a stronger position to succeed as an individual and as a company.  The two cases you are about to read will illustrate this point.

John is a “hired gun” of a $25 Million construction supply company. He was hired by his company’s owners to turn the company around after several years of financial losses.   John accepted the position with confidence and soon learned the reasons the company was failing; they were related to the ownership structure, heavy debt, and a culture of apathy.  Sales were flat. The company had not invested capital to replace aging equipment. The previous CEO was also an owner but had been ineffective in making the changes needed to turn the company around.  In coaching, it became apparent that John’s success depended on ownership restructuring, debt restructuring, culture change, and weeding out non-performers.  Investments in equipment and supply sources were also critical for success.  Although John was the CEO, he needed owner approval for these changes.

Much of the debt burden was attributable to monthly payments owed to two of the owners. It would not be easy to convince them to restructure this debt.  Many coaching sessions addressed this challenge.  One goal in coaching was to find a way to influence the owners to restructure the debt.  John needed to first demonstrate his ability to turn the sales and bottom line around so the company would be in a position to attract bank financing.  It took a full year, but John was able to show growth in sales and profits.  He established credibility with his company’s owners–enough to raise the challenge of restructuring debt. His coach worked with John to create a case for change with a compelling agenda for the owners.  His coach also helped John develop a plan that demonstrated how restructuring the debt would allow the company to prosper.  Next, his coach helped John to contrast the restructuring plan with what would happen if the company did not restructure the debt.  He demonstrated that the status quo would handicap the company and lead to an erosion of assets just to survive. Faced with these alternatives, the owners accepted John’s plan to restructure the debt.  John found a bank willing to offer long-term financing that would satisfy the owners and the capital needs of the company with terms that would allow the company to manage its debt.   The company is on its way to its most profitable year ever.

John was successful because he was able to lay out to the company’s owners what Jim Campbell in Good to Great called “the brutal facts.”  These facts demonstrated how the status quo would eventually bankrupt the company.  John also laid out a plan of action that would satisfy the owners and allow him to grow the business. The role of the coach was to help John organize his thoughts and present a plan that the owners would accept.  The brutal facts created tension with the goals of the owners; the debt and ownership restructuring plan reduced that tension. In my opinion, this was a major reason for John’s ability to influence his company’s owners.

The second case was not successful. In this case, Don was hired by the two owners who previously had run the company but were unable to grow it beyond its current state. The company manufactured products for the local market.  The products were high in quality, and the company brand was respected.  The owners wanted to grow the products into a regional and, ultimately, a national brand.  Don was well on the way of accomplishing his mission when conflicts arose between him and the owners.  The owners kept interfering with his leadership.  Although irritating, Don was able to manage.  The conflict heated up when the owners became upset with Don over a major change initiative. I believe the owners were threatened by his success and felt displaced by his leadership.  Don’s attempts to influence the owners failed.  In fact, these attempts created even more tension.  Finally, in frustration, Don and the owners reached a mutual agreement to part ways.

Why did I include this case? It is a warning to CEOs who take over entrepreneurial companies, because I have seen similar scenarios unfold many times in different industries.  The newly hired, highly competent CEO replaces the owner who had struggled to grow the company.  The culture the new CEO enters is often controlling and highly influenced by the personality of the entrepreneur/owner.  As much as these owners would like the company to succeed, they are haunted by the fear of losing their influence and the feeling of being displaced by the new CEO.  In reality, they are often more concerned about losing their influence than the success of their company.  I am aware of one owner who accused a CEO of “throwing him under the bus.”

To summarize, it is important to influence upstairs. I would add the warning that company politics can get ugly. Coaches need to be aware of this and help their coachees to navigate the perils of their leadership. A good principle to keep in mind is to create tension for the owner, boss, or board that is meaningful and relevant to their goals. Misreading their goals can spell disaster for the relationship and job security of the new leader.

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