EXECUTIVE SUMMARY

Situation

Increased use of business coaching has created a greater need for accountability and clearer contracts.

In this white paper, we explore the limited research available on contracting—the setting up, use and monitoring of the business coaching relationship. We do not try to develop a standard coaching contract as that would be too constraining for the majority of business coaches—each contract must be customized to the client’s requirements. Instead we provide a list of factors that should be considered in developing an effective contract.

Problem

Poor contracting creates issues for all parties—business coaching contracts are much more than who, what, when and where.

What is contracting?

The business coaching interaction uses all the elements we associate with wholesome and effective human relationships such as dialog, reflection, enquiry and exploration of meaning. But this interaction takes place within a specific and unusual context—a learning conversation where the agenda for the interaction is determined by only one of the partners in the conversation. This mix of familiar and unique can lead to misunderstandings and dilemmas for both parties unless the implicit psychological contract that is operating is made explicit. The initial exploration of the terms of reference for the relationship and its continual monitoring are at the core of contracting.

Other disciplines and helping therapies such as counseling have a wealth of experience in the management of these areas. Our research identified good practice that recognizes clarity of mutual expectations as vital for a good working relationship. We describe three types of contracts that invariably operate in any helping arrangement:

Solution

Contract early using all three contract types—seek transparency for all—review the existing contract often.

Critical elements

The elements under each of these contracts are varied, and we have reviewed what communities of practice and professional associations have identified as critical. These groups include the International Coach Federation (ICF), the European Mentoring and Coaching Council (EMCC) and the Worldwide Association of Business Coaches (WABC). The Executive Coaching Forum, for example, provides a valuable service with the Executive Coaching Handbook where they have a competency model that describes the requirements of a coach, including a specific section on contracting. The complexity of this section illustrates the dynamic nature of the contract. One area of particular interest is clear accountability. Negotiating the coaching contract can be an ideal opportunity to engage the sponsor fully with setting the coaching goals and designing the evaluation criteria. Real sensitivities are, however, involved in such three-way contracts, and we suggest the use of a no-fault exit clause for both sides if it becomes clear that things are not working. Some practitioners have identified issues with the three-cornered contract specifically and even the four-cornered contract, where the line manager is not the direct manager of coaching.

In general, the business coach can effectively steer through the maze of who the client is in this relationship by maintaining transparency and appropriate ethics. For example, a mismatch between the career aims of the individual and the requirements of the organization is not unusual. The business coach must negotiate goals based on the common ground between these two perspectives and use the business coaching intervention as a method of bringing them together. 

The WABC Professional Standards for Business Coaches are explicit in the need to hold the potential tension between organizational and client agendas: “I will put the client first while at the same time respecting the objectives of the client’s organization.”

The issue of confidentiality is particularly marked in this regard as sponsors/line managers often assume they will receive reports of the progress of the coaching. Clearly this is not at the business coach’s discretion and a contracting conversation must take place with the sponsor and the executive to agree on the frequency and extent of reporting.

Results

Proper business coaching contracting protects all parties (e.g., client, business coach, organization)—efforts are rewarded.

We suggest including the following key elements in the business coaching contract. Additional elements are identified in the full paper.

The contract

Practicalities

Purpose

Process

Full White Paper

The evidence shows that a business coaching contract should be negotiated early in the relationship and revisited often.