The future economics of coaching

I alighted upon a brief but fascinating discussion of coaching within a recent Financial Times podcast about economics books.  Tyler Cowen of Marginal Revolution is a giant of the economics blogosphere and his new book considers how new technologies could affect our future economy.  Cowen argues that much of the information and material required to become an expert in any given field is available online, often without charge. In this new environment, there is a less need for a traditional teacher who imparts their knowledge to their students. What we will increasingly need are teachers and tools that provide us with the discipline, motivation and encouragement to make use of the wealth of content. In the future, teachers and professors will become more like coaches and motivators. Coaching will become part of the core skillset of more professions and coaches themselves will be in more demand.

The podcast can be found here. It is available for free but requires registration. The relevant five minute excerpt is at 47.10.

The Only Coach in the Treasury

I am moving jobs, to become a senior economist in Her Majesty’s Treasury. I have discovered from the Civil Service’s internal coaching network that I will be The Only Coach in the Treasury, which sounds like a character in a sketch comedy. 

In my new role I will focus on growth and productivity. Surely the perfect topics for a coach!  This is HM Treasury of course, so we’re talking about the growth of economic output. Nevertheless, there are some interesting insights when we look at personal growth through an economic growth lens.

As I rediscovered in preparing for my interview, sustainable growth in the modern developed economy is about how you combine your inputs (land, labour, capital), not how many inputs you have. It is ideas that matter, or to use another analogy, it is the recipes rather than the ingredients.  And so it often is for individual growth and performance. We can devote more time to certain activities but the real breakthroughs occur when we break free of our existing habits and find different and better ways of doing things.

Can we prove coaching works?

To prove whether coaching ‘works’ is much the same challenge a Government economist faces in establishing whether a new policy has worked (and whether the benefits are worth the costs). There are some tricky political issues too. Do the ministers, officials and advisers who commissioned a project really want to know if it isn’t working? Often their self interest – and self esteem – is tied to demonstrating success. At its worst, unsuccessful policies linger on until their originators move elsewhere. It reminds me of physicist Neils Bohr’s quote that ‘science moves on, one death at a time’.

Like most coaches, I am pretty evangelical about the power of coaching and honestly believe it works. But can I prove it?

There are different evaluation techniques we might consider and some are more credible than others.  If I was reviewing coaching as a government policy, how much confidence would I have in coaching’s effectiveness if different forms of evidence were used?

1.       Ask coaches. Credibility rating: 1/10. Without questioning the integrity of coaches, there can be no doubt that we have a vested interest in proclaiming the effectiveness of our profession. Indeed advocacy can be an important way in which we get business. As an analyst, I would not accept this as good evidence.

2.       Ask clients. Credibility rating: 4/10. This is a useful form of feedback for coaches to find out if there are specific things they are doing that are working well or poorly. However, client reports lack rigour as a form of evaluation. The problem is the ‘focusing illusion’, where we over-weight the importance of something when we are asked about it.  As one expert puts it, “nothing is as important as you think it is, when you’re thinking about it”.

3.       Compare client performance against a ‘control group’.  Credibility rating: 6/10. This is a more typical form of evidence in government evaluations. The outcomes achieved by the target group or area are compared against the outcomes achieved by a group or area that has received no help from the policy. The first challenge is to establish what outcomes we care about. Is it career progression, business performance or perhaps individual wellbeing?

 A more serious issue is the selection problem. Take for instance the business coaching scheme I recently visited. The clients were very enthusiastic and I have no reason to doubt that they valued the programme. But it is simply not a fair comparison to compare the outcomes of those who take up coaching with those who do not. By their nature, those who select to take part in business coaching are typically more motivated, more driven – and thus more likely to succeed in future. It’s rather like looking at the superior career results achieved by graduates and assuming that it must all be due to the fact that they attended university. At least part of the difference is driven by the factors that got them to university in the first place (brains, hard work, connections etc).

 4.       Run an RCT. Credibility rating 8/10.  There is a strong trend towards Randomised Control Trials (RCTs) in social science, building on the decades of experience in medicine.  This is typified by the awards and attention lavished on the so-called ‘randomistas’ in the economics profession.  To establish a coaching RCT, we would need to take all those who want to take part and randomly allocate them into two groups. Group A would receive coaching; Group B (the ‘control group’) would not.  Any differences in performance are then assigned to the effect of coaching.

 The weakness here is the placebo effect. Presumably it would be obvious to people whether they were receiving coaching or not, and decades of research in medicine suggests that this alone will influence their future performance.

 5.       Run an RCT vs a placebo. Credibility rating 10/10. This is the gold standard. Clients would be split into two groups a before. Group A would receive coaching and Group B would receive a ‘placebo’, such that neither knows whether they are receiving coaching or not.  It is difficult to imagine how this might work in practice, but perhaps they could simply have a series of unstructured conversations similar in length to a coaching session. The logical extension of this approach is to compare different types or elements of coaching, to see which is more effective.

I haven’t yet explored how many of these approaches have been tried ‘in the field’ and, if so, what they have revealed. I will post up anything I find of interest.  Writing this has also made me think more carefully about what I might do to more robustly evaluate my own coaching performance.

Motivating knowledge workers – can coaching help?

On the advice of a coaching mentor, I recently read Drive by Daniel Pink,  a short book on motivation in the era of the ‘knowledge worker’. I found his synopsis compelling, even though his pop-science style grated at times (in particular his repeated use of the expression “science knows”). Pink argues against managers who try to promote effective performance through a ‘traditional’ combination of supervision and monetary incentives.

Pink first sets up a simplistic model, influenced by classical economics, in which individuals are motivated by financial returns. He argues that too many organisations use this model in the way they manage people. This is something of a straw man. Most organisations realise that other things matter to their employees and economists like Bruno Frey have long been arguing that monetary incentives can have unwelcome side effects. This can include distorting behaviour away from productive work that isn’t measured, and even undermining workers’ ‘intrinsic’ motivation to do a good job.

For all that, the book neatly summarises the insights of others and highlights the idiocy of taking classical economics as gospel truth, rather than as a very useful and powerful analytical tool. In my job, I have seen a movement towards performance related pay in many public services. This is a complex area, but at the very least I believe it carries some risks given the difficulty of measuring all the things we care about and the danger of undermining the high level of intrinsic motivation that most public service workers have. Pink argues that the traditional motivators are much less effective for knowledge workers than for employees in a factory setting. The complexity of knowledge work means it is difficult to effectively supervise, monitor and measure what a worker is doing. Much knowledge work is also creative, and true creativity requires intrinsic motivation. Pink sets out three key motivators for knowledge workers:  autonomy, purpose and mastery.

Coaching becomes extremely powerful in this world. Good coaches will:

• Promote the client’s autonomy by raising awareness and encouraging them to take responsibility for their own lives.
• Work with clients to help them identify and sustain their purpose and values, and to find ways to align their life and work with this.
• Often work with clients to improve performance and achieve mastery over specific tasks such as presentation skills. Indeed, one of the seminal texts of personal coaching, Tim Gallwey’s Inner Game of Tennis, was all about how to achieve mastery.

How planning helps turn commitment into action: evidence from US voter turnout

Perhaps the most exciting place to work in the UK government is the Behavioural Insight Team, which derives its popular ‘Nudge Unit’ nickname from the best-selling book by Richard Thaler and Cass Sunstein.  The team applies insights from behavioural science to government policy, with some impressive results.  As I work as part of the same department, I’m lucky enough to be invited to their internal seminars where I can hear about the latest research in behavioural economics.

I believe there are some important lessons for coaches from a recent seminar on how policital activists try to get people to vote in US elections. The authors conducted experiments to measure the effectiveness of different strategies, with some fascinating findings.  Strategies are typically based on the rational voter model, inspired by classical economics, and thus emphasise four factors that are believed to influence a voter’s decision about whether to vote:

• The cost of voting (largely the time cost);
• The importance to the voter of the election outcome;
• The probability that their vote will influence the outcome;
• The voter’s belief in the importance of ‘civic duty’.

The first striking finding is that strategies that target these four factors have essentially zero impact on the probability of voting.  Of the strategies that did work, one was obtaining a verbal commitment from the voter that they would vote, which increased by 2 percentage points the likelihood that they actually would.  This reinforces similar findings elsewhere in the behavioural economics literature. 

A more novel finding was that there was a substantial additional effect from asking prospective voters about how they would implement their commitment.  Activists asked prospective voters as series of implementation questions including:

• When will you vote?
• How will you get there?
• Where will you be beforehand?

Experimental evidence showed that, regardless of their answers, simply asking these questions increased participation by a further 4 percentage points.  The hypothesis must be that these questions help people to think through how they will do the things that they commit to.  This is a method of raising self-awareness, which I believe is absolutely central to coaching.  It also reinforces my growing sense that I risk failing my clients if I do not help them to consider whether their commitments are realistic and what additional steps they might need to take to ensure that they happen.  A coach has a responsibility to be the guardian of the client’s long term objectives, not just to have a nice conversation.

There were some other interesting findings from the research which I will return to in another post. More information about the primary research can be found here.

ROAMEF for improvement?

Economists who work in, or with, the UK Government know the ‘Green Book’ as their bible. The Green Book is a kind of public economics 101 that describes a framework for making decisions about government policy. At its heart is an idealised step-by-step process called the ‘ROAMEF’ cycle. As I reflect on my two careers, I notice many similarities. Coaching, in its own way, uses the ROAMEF. ROAMEF is a mnemonic that represents six stages: Rationale; Objectives; Appraisal; Monitoring; Evaluation; and Feedback.

• Rationale. For economists, a rationale is the motive for Government acting rather than leaving the outcome to the market process. In coaching, the analogy is not precise. Perhaps the nearest equivalent is asking the client to identify how achieving the objective would be important to them.

• Objectives. The Green Book says that Government should specify clear objectives before it considers how best to achieve them. Exactly the same process applies in coaching, where clients are invited to describe in vivid detail what they want to achieve. This is often where much of the most fruitful work of the coaching partnership is done.

• Appraisal. Here economists assess the prospective costs and benefits of a policy option, where possible quantifying and monetising the impacts, and identifying the key risks. Effective coaches will invite clients to undertake a similar process, so that they think through the possible options for action before rushing in to them.

• Monitoring. This is about tracking performance, after the policy has been implemented. Tracking performance is common to coaching too. Often this will be about describing the feelings and emotions that were experienced, as well as ‘harder’ measures.

• Evaluation. In an ideal world, Government should evaluate their policies so that they find out what is working and why. This is an important process in coaching; learning which of the actions have been effective and which have not.

• Feedback. This is the process of applying the lessons of one policy for future policies. Without feedback, monitoring and evaluation have little value. Coaches will sometimes invite clients to reflect on what they are learning about themselves, and on what they can take from success – or failure – in one area of life and apply to another.

ROAMEF is a simplified, idealised model. It is often criticised for bearing little relation to how policy is actually designed and implemented in the real world. Common charges are that appraisal occurs after the decision has been made (‘policy based evidence making) and that evaluation findings are forgotten as decision makers move onto the next big thing.

For all its flaws, I believe ROAMEF has value. In both policy-making and coaching, when it works well it provides a structure that enables governments – and clients – to make better decisions. Explicitly naming and assessing the costs, benefits and risks should enable decisions to be made more rationally, reducing the kind of cognitive biases identified by Daniel Kahneman. I can see real value in finding a way to extend a coaching approach to policy making. Policy coaching, could help minister and officials to spend time becoming crystal clear about what they want to achieve and what it will give them.