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Happy Thursday folks,
A dark Tuesday morning back in 2010, I stood in front of my then 70+ classmates. Eyes closed. A teacher talked intensely to me, nudging me, asking me questions, and pushing me towards the desired outcome. No, this was not a practice in resisting negotiation tactics from the union; it was an attempt to show how coaching should ideally work. And to be fair to the teacher, whose name I’d forgotten, it was 100% voluntary, and I wanted to do this.
Back then, coaching was still a bit mysterious and, in all honesty, not highly regarded amongst myself and my classmates. We were more into psychology and thought the only way difference in organizations could be mad was through HR people and not through “coaches”. Over the years, this has changed, and today we're looking at the rapid growth of online coaching.
Online coaches have been on my radar for quite some time. I came across BetterUp a couple of years ago; I've seen CoachHub implemented in organizations, taken sales pitches with Plato, and am available as an adviser myself at Wisory. And it isn’t a new area. Many of the players have been around for quite a while. But what’s new is the insane growth. The stars have been aligning over the last years. And as with many other things, the pandemic has been accelerating this shift.
We are now more used to seeing, talking, and working with someone over video. But the pandemic isn't the only underlying force behind this remarkable growth; more companies recognize that off-the-shelf leadership programs aren't as effective as having a meaningful interaction 1:1.
A couple of weeks ago, BetterUp announced their series E at an evaluation of 4.7 billion dollars. That's an evaluation increase of 171% since January this year when they told their series D round. According to BetterUp, they have been "over-achieving an aggressive 2x growth plan in the first half of the fiscal year.".
CoachHub has yet to disclose its evaluation, but in December 2020, they did a Series B round of 30 million EUR, and a month ago, they did a Series B2 round of 80 million EUR. It would be safe to say that CoachHub has seen an uptick in users similar to BetterUp during the ten months between the funding rounds.
As mentioned above, there are more players than just these in this field, but these two provide excellent examples of the underlying growth we see in the area.
What's driving the growth?
Initially, I pinpointed two reasons; let's explore them and go a bit further.
As we all know by now, the COVID-19 pandemic has acted as a catalyst for change in many different areas. It's diminished the distinction between digital and physical, blurring the lines and changing what used to be our usual way of operating—coaching used to be done in person, with the other person sitting right across the table. With more people employed and comfortable utilizing video meetings, the barrier to engaging with an online coach is lower.
What we talked about in 'A new playing field' applies to the coaching sector; coaches now can work from anywhere, with anyone. For the one getting coached, this means that you can get a coach specific to your needs; there’s no need to travel somewhere to get someone in your niche.
Need someone that has experience in being a first-time manager in Poland?
Let's hook you up with one.
Need someone who has marketing knowledge and launched marketing campaigns in Japan?
Not a problem, choose from these twelve.
This benefits both parties; the coaches find customers, the ones being coached find the right coach.
Many platforms also utilize different tests that you can use to find the exact right coach for your needs. Pretty neat.
Then there's also the underlying push towards more customization around learning. I’m not saying that the days when leadership programs were a thing are gone. Still, more and more companies see value in either adding coaching as a component to their leadership programs or partly replacing their programs with individual coaching instead. I’m not saying coaching is a silver bullet that will automatically solve things, but it is one piece of the puzzle for developing leaders.
BetterUps CEO, Alexi Robichaux, says it like this;
Never has the pressure been greater on our global workforce, and as we collectively redefine the workplace, it's clear that every organization and every employee critically need support, growth, and transformation. From leadership and career development to mental fitness, connection, and belonging, customers are increasingly turning to BetterUp to support the most important part of their business—their people—in the most profound way possible: by focusing on their whole person growth and development, including their behaviors, skills, and mindsets.
He is tooting his own horn, but to a large extent, I do agree with him.
And last but not least, all of this is affordable. I can’t disclose exact amounts, but let’s just say that the yearly cost for coaching once a month will probably cost less than sending your employee to a conference. I guess that the platforms can offer these prices because they can hook up coaches long-term, driving down costs.
Once again, I'm not saying external coaches are the silver bullet that will solve all your problems, but they could be one piece of your bigger L&D puzzle and could also fit neatly into your retention plan for employees. It's terrible if an external coach is needed for the employee to feel seen and heard, but done right, it will be one additional touchpoint where the employee feels seen and heard. But again, it needs to be done right, and an external coach can't and shouldn't replace or hedge an absent manager. If the stars align, the employee will have two different input sources, helping them push their career forward.
All good then?
Well, there’s one fear raised when talking about this - but what if they do a program and then quit?
First of all, I don't think that's a rational fear. Secondly, if that's the case, then that was probably bound to happen anyway. Thirdly, if that's a pattern you see - look what's driving the pattern. There is more risk connected to not developing your people than doing so.
And it has never been more accessible and affordable to find world-class coaches and mentors than right now, so how can we utilize that in the best possible way?
That’s it for today. See you next week!