User:MSB/IMB-EU-2013/PS2-P3

= Methodology = In the following sections methodology, limitation and recommendations will be discussed.

Problem Solving Tools
From the start of the project, we were supposed to write our findings and progress reports in an open source platform called “Wikiversity”. As we were going further with our research, based on our progress reports, feedback was provided from our supervisor. This allowed us to work in an agile mode, a concept similar to an Agile Project Management applied mainly in IT industry.

From the start we used a famous problem solving tool introduced by Barbara Minto at McKinsey in 1981, “the pyramid principle” in order to make a decision on what areas we would concentrate to answer our research question. Although successful at first as we thought, after a “sprint review” report, a term used in Agile Project Management for an inter-term feedback on results, the research question was narrowed. If at first the areas of interest were executive coaching and logic of failure, later, the latter was left out.

Although one may think that approach for this paper was haphazard, in reality, it was systemic. Systemic thinking was applied: when deciding for decision making, arranging for what part was to be worked on by each member from the basis of previous research in this field; when coming with a structure for a presentation and final work.

Important to note that when sharing the research findings of each member, Corporate Storytelling method was applied to make information sharing easier, better to understand and remember.

Limitations and Recommendations
Main sources of research were secondary sources (academic literature, dissertations) as well as few interviews (executive coaching companies, interview with a performance coach), which later did not prove valuable and were not included. Limitations of our work were two factors. First, the executive coaching deals with soft problems. These are not easily quantifiable and very subjective. Although there is much research on business coaching and its effectiveness, there is a challenge to find viable data to make a strong case for effectiveness and wide application of executive coaching in companies, and especially in SMEs due the size of enterprise that does not draw attention of researchers. Second, the executive coaching process entails full confidentiality of the client. If the company where coaching process is widely represented in media, the coaches are not, thus, posing a challenge to have their insight on the issue. Also the companies are not eager to share confidential information of how the coaching process was, were the objectives met or not. As this information is sensitive and potentially might impede their value in markets.

Scientific Approach
The scientific approach to the project involved stating hypotheses and testing them. In order to define a specific research question related with the course problem solving methods: Executive couching (EC) and Logic of Failure (LF) and our related interests; two main hypotheses were defined:


 * 1) EC and LF can help SMEs from developing countries face competition.
 * 2) There is a Relationship between LF and EC as a solution for SMEs:Research from past experiences, academic papers and study cases didn’t show any proven relationship with Logic of Failure and executive coaching for SMEs. From that point, a new hypothesis was to be proven
 * 3) EC helps SMEs with HR Challenges:Based on this last hypothesis, important findings gave the group a framework to approach SMEs problem: It was clear the importance of organizational culture as an key factor for SMEs Human resources challenges, there was evidence that EC works however the problem solving method has limitations that are important to have in mind. Under this new scenario and a new research result, the group defined a last Hypothesis that lead to the final research question, which included Mentoring as another problem solving method
 * 4) EC & Mentoring help SMEs with HR challenges

= Introduction =

In order to answer the research question SMES special characteristics had to be understood and linked with the most relevant HR challenges they faced and how organizational cultural plays an important role in the SMEs dynamics.

Research Question
The Pyramid Principle helped us define our research question. Based on this method, a known situation is the mainframe of the research, then a complication is identified and the research question can be established:


 * The identified situation is that SME’s face management challenges competing in their industries,
 * Complication: They have limited resources to overcome HR challenges.
 * The final Research Question is How Can Executive Coaching and Mentoring help SMEs overcome HR challenges?

SME Challenges
SMEs have special characteristics that define their way of working. Small businesses are the product of their owners, whose personality and personal involvement dominate and they influence in a big part how this enterprises work in terms of decision making and organizational culture. In this kind of enterprises processes may not be written in manuals however there are well known rules that defined interaction between employees and therefore HR related topics. . There are inner characteristic of this kind of enterprises that are the result of the way they were founded and the resources they can manage:


 * SMEs’ do not have a clear structure of the decision making process
 * By Nature SMEs have a high amount of risk.
 * Company size affects the use of formal HR practices
 * Many lack time and resources to take care of their HR needs
 * Owners personality and personal involvement dominate
 * SMEs deal with recruitment and turnover difficulties

SMEs deal with recruitment and turnover difficulties which is a critical bottleneck in their business growth. Based on a survey made by Corporate Leaders consulting group with 2,642 interviews (749 telephone and 1,893 online interviews) in: Australia, China, France, Germany, Italy, Poland, Spain, Switzerland, The Netherlands and the United Kingdom on 2010 the most important HR Challenges for SMEs were: Hiring Qualified People (33%), Retaining Qualified People (26%) and Developing Managers and employees (22%). This is by contrast not far of what multinationals also face; however SMEs should pay special attention to the HR decisions made during the formative stages of the firm development because it has a direct impact on the firm's long-term goals. Human Resources has the challenge of attracting talent on role dimension and then retaining that talent by providing a professionally driven organization culture this by develop skills and competencies in leadership. SMES should address the high amount of risk of the business operation by having reliable and loyal work force which can support them in good and bad times. HR role in small companies is to attract talent and then retaining it by providing a professionally driven organization culture.

Organizational Culture
Organizational Culture has a clear relationship with HR Challenges. According to Kotter and Heskett. organizational culture is defined as set of values, beliefs and behavior patterns; Schein defines it as the sum of all the shared and taken for granted assumptions which shapes and generates behavioral standards. These definitions give us an enormous Hint when it comes to solving problems in SMEs. When an organization sees the necessity to clarify business goals and priorities, address leadership problems or enhance any intern human resources interactions, organizational culture should be understood. It gives an important guidance for Executive Coachers in order to work on a personal-company goal oriented process.

= Executive coaching =

The challenges and problems of SMEs will be addressed in this section through an introduction of executive coaching at SMEs, the benefits of it and applicable methods to be of use for these companies.

Coaching, Products, Principles, Process
According to Flaherty (2010), coaching is supporting someone in reaching his/her goals. In addition to this, he argues that that the support coaches provide are of short and long term nature. So the support provided to reach persons goals is of short-term nature. As the client will always face more challenges with time, in order to be competent to deal with them, the long-term nature of coaching will take place.

There are main products or results of coaching. First, long-term excellent performance where client meets high professional standards in the discipline coaching takes place. Second, a habit of self-correction when the client observes whether the performance is not up to the standard without the interference of coach. Third, self-generation, which makes clients, strives for improvement and further development.

It is important to know the basic five principles of coaching before further going into different methods and types of coaching. First, relationship is a basis for a coaching process. E.g. mutually satisfying relationship based on mutual respect, mutual trust, and freedom of expression. Second, pragmatism of the coaching where the specific outcome is expected as well as relentless correction based on feedback loop. Third, there are two tracks of coaching, where the first is related to work of coach with the client and second work of coach with himself/herself. Fourth, since the client has already developed his way of doing things, this is to be taken into account by the coach. Fifth, this principle is based on a premise that techniques by themselves will not be sufficient for short and long term coaching success.

As a coaching process begins to take place, in the preparatory stage, a coach should first be able to identify if the language is missing. Here, the language refers to a language of the world or a state the client wants to reach. Second, be able to help the client to observe himself/herself. Third, coach must be able to assess the client’s level of competence and be able to verify this assessment. E.g. coach should have a knowledge, experience in field he is coaching to do that.

Thus, once the prerequisites are met in preparatory stage following stages will take place in the “flow of coaching” or the main stage involving: establishing relationship, recognizing opening, observing/assessing, enrolling the client, coaching conversations. These are the standard steps in the coaching process and may vary from a practitioner-to-practitioner depending on style. .

Coaching vs. Consulting
Executive Coaching is a powerful tool in order to train managers in the development of their fundamental skills and impact with high performance in their jobs as leaders and as workers. General Managers and Human resource function responsible for Small and Medium Enterprises’ success, should deeply understand the benefits and disadvantages of using executive coaching within a company.

Literature has diverse definitions for executive coaching, however PhD Richard R. Kilburg recognizes important aspects that differentiate this problem solving method from others. As it defines is a “helping relationship formed between a client who has managerial authority and responsibility in an organization and a consultant who uses a wide variety of behavioral techniques and methods to assist the client to achieve a mutually identified set of goals to improve his or her professional performance and consequently to improve the effectiveness of the client’s organization within a formally defined coaching agreement”

This definition indicates that this method applies directly to executives of companies and the result is an effective improvement in both individual and organizational performance. However, this definition identifies the coacher as a consultant, which not always would be the case. There are important differences between executive coaching and consulting. The following table summaries the main differences between this two service solutions:

'''Table 1. Consulting VS Executive Coaching'''

Under this method of differentiation, SMEs have available external influence by two different ways. On one side; if a firm faces an organizational problem and considers that external companies with expertise in a specific field can advise them, consulting firms could provide through a deep analysis a final solution linked with company needs. On the other hand, if it recognizes the potential of its employees and wants to invest in the self-development of its human capital, executive coaching is the problem solving method to choose. This method works on aligning executives with the company and business priorities, on learning the company culture, evaluating a team’s strengths, weaknesses, opportunities, and threats, and making adjustments.

In essence, personal and executive coaching are the same. The methodology, focus and bases are common. Under the executive coaching context, the process concentrates on a directive roll within the executive in the organization and the results that the manager and the company should achieve. An organization’s emerging and high potential leaders are ideal candidates for Rapid Evolution’s executive coaching focused on increasing emotional intelligence. People who have advanced due to their technical expertise often struggle in making the transition from co-worker to manager, and the technical genius often makes for a poor boss. Because emotional intelligence can be developed, coaching focused on emotional intelligence has a high return on investment.

Instances When to Recur to Executive Coaching
As recommended by Mertxe Munárriz, a professional coacher, Executive coaching could be very useful in the following situations:
 * Mergers and Acquisitions
 * Organizational changes within the company
 * Promotion to a new job position

However a person shouldn’t wait for this unique event situation to occur, but can also recur to executive coaching in the following situations:
 * An executive feels he/she is not having the desire impact in the company and is not achieving a set of goals.
 * Desire to improve communication skills and relationships with others.
 * Requirement to improve leadership skills and career development of the people working in the team.
 * Need to balance workload with personal life.
 * Clarify business goals and priorities
 * Improve communication and leadership skills

Coaching works
If one is to think of trying the executive coaching, he/she must have the evidence that it works. Among many evidences of the success of executive coaching, one case stands out for being highly descriptive and resourceful. Further on, this case will be described and discussed. According to Baker, Fernandes, Kombarkaran, and Yang (2008), executive coaching proved to be an effective method of leadership development based on an empirical study. They conducted a study among 142 executives and 42 coaches. The coaching process took place at a big American multinational early in 2002, where the company had undergone a major transition following an acquisition. The challenges were due to bigger responsibilities of their executives, and coaching was a method selected to solve these challenges.

The goals for the coaches were to:


 * “Increase people effectiveness by building on strengths and working through blind spots,
 * Facilitate strong ties between the executive and his manager, direct reports, collaterals, and
 * Develop skills and experience for executives to coach others.”

Lifespan of the project was 6 months with 12 sessions in between. In the beginning coaches were establishing rapport through conversations and trying to understand the coachee in an organizational structure and context. During the process coaches got accustomed to organizational, work culture through these contestations. Next, coaches helped executives to reframe their view of themselves in the organization, understand the impact of their actions and how they are perceived by colleagues, support new behaviours and provided with strategies to ensure progress.

After the completion of coaching process, in 2003, a survey was circulated to measure effectiveness. There were two survey instruments employed. “The instrument measuring the perceptions of coachees is comprised of 62 close-ended and 3 open-ended questions. The instrument capturing the coaches’ experience used 34 close-ended and 22 open-ended questions.” The participation rate for coaches and executives was 69% and 91%, respectively 81% of Executives find that stated objectives were met, 72% of executives stated that confidence was a notch higher, 78% said that it maximized their contribution to the company, 86% stated that it’s beneficial to the company. As to the concept of executive coaching, findings suggest that executives find coaching as an added value, dismissing common perception that it’s “fad” (81%) and “just a common sense” (88%). 73% stated that time spent on coaching was a good return on investment and they see it in a positive light.

Beyond the feedback, the actual change that took place among executives was improved communication skills and effectiveness of executives in their roles. The patterns of interaction with coaches changed as well. Observed behavioural and personal changes were woven into executives’ style of leadership. The coaches confirmed that change among executives occurred. The consistency of findings among sources and methods: “quantitative, narrative, observation, and review of daily plans and notes”; suggested that coaching successfully achieved change among executives.

The areas where change occurred were: people management, relationships with managers, goal setting and prioritization, engagement and productivity, and dialogue and communication. Important results of the study also suggest that coach selection, commitment of coachee to a behavioural change, role of program and organizational support are very important. Therefore, success of a coaching program depends on a well designed and implemented programs may contribute to the development and retention of talent.

EC at SMEs
There are only few examples that prove that executive coaching works in SMEs, one of these is a study made in 2010, in the University of Surrey, United Kingdom.

The objective of this study was to prove the effectiveness of executive coaching in SMEs and to identify the different factors that influence coaches such as: “choice of coach (the matching process), their perceptions of the coaching ‘journey’ and the kinds of personal and organisational benefits that the coaching achieves”. In order to prove these they chose 90 manager of SME and they received one to one executive coaching (total of 10 hours). The university analysed all the steps of this process starting with the selection of the coach until the results of the EC. At the end the managers and the coaches answer some survey and participated in some focus group in order to know what they think about the whole process.

All the process started with the selection of the coach; first the university did a selection. The initial list had 79 applicants and after applying weighted quantitative selection criteria the list change to 30 coaches. Then they sent the coaches’ curriculum vitae (CV) to the managers. This CV includes “photographs, qualifications (including specific coaching qualifications, if any), coaching methods and philosophy”. After this, the managers were asked to choose 3 of the coaches and to arrange a meeting, in order to know more about the coach, and then the managers chose one.

One factor that is important is the manager´s perception of coaching, that is why at the beginning of the process the managers answer what they think of this process. The answers of most of the managers were that coaching was an opportunity to try something that they have never try: “They recognised that the coaching provided an opportunity to get access to an outside expert who they could bounce ideas off or even a challenge”. The minority answer that they feel sceptic about the process.

After the 10 hours of Executive Coaching, the managers answered some questions related with the matching process, and the results of the coaching. Respect to the first one they said that they were looking for a coach with business experience and more directly related to the workings of SMEs, this was more important than the qualifications. This is because with experience in SMEs the coach understands the particular problems that SMEs have.

They also found that this stage of the process is important in order to have a good coach experience, but is not easy to know the coach with the CV and only one meeting. “Most respondents found the choice of coach subjective and quite difficult; despite the information they were given. In the end, it often came down to what the coach looked like and spoke”.

The last point that influences the coaches is the benefits that the coaching achieves; this point also help to prove that Executive Coaching can be used in SMEs and helps with the performance of the executives of these kinds of companies.

The issues dealt in the coaching process were diverse and broad; some of these were expected such as leadership styles, marketing, recruitment and time management. What emerged strongly from the research and were themes unexpected was that managers achieved a greater sense of strategic direction (especially strategic change) and planning as a result of the coaching, as well as the ability to prioritise and focus on key areas of the business the answer of one of the managers helps to understand what they think about the process: “It was often the case, then, that the manager was aware of what action to take, but often appeared unsure of themselves and procrastinating: ‘I wasn’t able to take the company forward because I’d sort of plateaud. I needed somebody to bring in, take me forward a bit and I think that’s how it seems to work”

Other aspect that is important in the executive coaching is the personal versus the business benefits. Most of the managers answer that they gained a combination of both personal and business benefits. They were surprised because they were asking for business goals and at the end they gained both. What they said is that at the end the personal life emerged in the coaching process, one answer of one of the managers is: “I don’t think it was particularly easy to separate them”

Limitations
Along the document we have mentioned mainly the benefits of hiring executive coachers. The diagnostics are interpreted and work is done with the individual to help them understand their personal style and behavior patterns in order to be more effective. The benefits were both organizational (better productivity, quality, organizational strength, customer service, and retention), as well as personal (improved relationships with direct reports and peers, better teamwork, and increased job satisfaction). Nevertheless, Executive Coaching also has some limitations.

The cost is one of the most important limitations talking about SME’s, and is not only the cost of the intervention, which in itself can be severely limiting, is also the opportunity cost. SME’s are focused in short term that’s why the time lost is more important in this kind of companies.

The external approach is another limitation, this is one characteristic of executive coaching that gives advantages such as confidentiality and independence but also gives some disadvantages like the coach’s unfamiliarity with the organisational culture these is important because the “coach needs to be familiar with the organisational culture of their client in order to understand the key challenges and issues facing the person being coached.”, as an external coach, it is difficult to gain the necessary familiarity in order to understand these key challenges.

Other limitation is that Executive Coaching is focuses more on personal development of coachee, rather than on immediate benefit for the company. In order to develop or improve coachee´s skills the process is focused more in the personal development this can create a disconnection between the person and the organization because they often learn much about themselves, which may or may not help them get things done in the organization that at the end is transfers to the company.

The term of the Executive Coaching can be a limitation, this process is oriented to long term goals but the interventions are in the short term (between 6 months and one year). This inconsistency of the terms of the goals and the interventions creates a lack of monitoring and sometimes because of this the coachee can return to the bad habit.

= Mentoring = In this section the authors will elaborate more about mentoring and how mentoring can support executive coaching to overcoming human resources challenges in SME’S.

Need for Mentoring
Mentoring is a one on one relationship where an experienced member of an organization (mentor) officers advice, feedback and support to a less experienced, usually younger member of an organization for the purpose of aiding the mentee in learning about organizational culture. Another research stated that mentoring is an age-old practice of transferring knowledge and experience through personal relationships. Ereet further argued that the mentorship relationship is unique, the mentor doesn’t just advice but is also part of personal trusted relationship between two people where questions, advice, knowledge and discussion flow back and forth openly. In the earlier research Deans et al stated that most of the Japanese company saw that mentoring is illustrate by informality and the organic growth relationship, and is based on emotional bonds between senior and junior people within an organization. Deans et al further argued that Japanese mentoring (the senpai-kohai relationship in particular) also emphasizes the relational aspect of mentoring, rather than viewing it as particular human resource strategy, as many organizations do in the west.

Normally mentor is someone who has more experience that can give you guidance on what you do. According to DeLong et al good mentoring relationship is not just about career advancement. They further argued that good mentor:


 * Is someone absolutely credible whose integrity transcends the message, be it positive or negative
 * Tells you things you may not want to hear but leaves you feeling you have been heard
 * Interacts with you in a way that makes you want to become better
 * Makes you feel secure enough to take risks
 * Gives you the confidence to rise above your inner doubts and fear
 * Support your attempts to set stretch goal for yourself
 * Present opportunities and highlight challenges you might not have seen on your own

Mentoring and Coaching
According to the research of Gray et al made, although coaching was viewed in highly positive terms, mentoring was also seen as having an important role to play in leadership and management development. Gray et al also stated that mentors are usually in-house and familiar with political situations and personalities. They “know the tricks” in a particular industry, sector and organization, whereas coaches are often outsiders. . As the authors have stated in previous chapter, coaching have positive impact in SME’S, however coaching also have limitation. One of the examples of coaching limitations is time. Normally coaching it is short-term session, it takes 6 to 12 months. Coaching can solve short-term problems but not long-term problems. .  This argument support by research of Gray et al, they stated that 10 hours of coaching might not be sufficient to shift personal attitudes, values and behaviors towards team members and other co-workers. Grey et al further argued one of the dangers of attending a course is that once you are back in the workplace, the old habits return. Coaching is primarily focused on performance within the current job and emphasizes development tools, while mentoring focuses on longer-term goals and developing capability. . Table 2 provides brief information of difference between coaching & mentoring.

'''Table 2. Difference Between Coaching & Mentor'''

From the research that the authors has made, the authors has found executive coaching is not effective to overcoming human resource challenges in SME’S, there are some limitation of executive coaching that can not touch and solve all of the problem such as time limit, lack of business and industry focus, lack of internal insight to company, etc. Therefore the authors suggest mentoring is an additional tool to support executive coaching. Table 2 shows coaching is a short-term program, the coaching session will takes 6 months to one year. After coaching session we need mentor to keep them on the right track. The task of the mentor it is not only to keep them on the right track but also to improve their skill to solve the problem that company faced. As DeLong et al stated in the earlier research, young professionals are still looking for mentors who can give them advice, encouragement and space to grow. The authors also argued executive coaching and mentoring could compliment each other’s. As we can see from table 2 executive coaching is a good tool, however there is some factor that executive coaching does not have and mentoring have. For examples executive coaching focus on learning by discovery and external problem, in the other hand mentoring deal with the internal knowledge of the company. By combine this two tools the manager or executive of SME’s can have horizon knowledge and also have internal knowledge to solve human resource problem.

The authors also founded that coaching and mentoring are two personal developments methods that nurture a person’s own abilities in order to improve behavior and performance. The authors found the process of coaching and mentoring are similar. Both of this method use effective communication skills, they are both a series of conversation (spoken or written) between two individuals. Another factor is the partnership between mentee and mentor, coacher to coachee based on mutual trust and respect. Mentee and coachee trust the mentor and coacher to help them. The last and important factor is mentee and coachee must be willing to be mentored or coached. The authors found the successful of this program it depends on the mentee and coachee. Mentoring and coaching only to facilitated them to improve their performance, skills and to reach the goal.

= Summary = Small and Medium Enterprises make an essential contribution and show their impact on national and regional economies throughout the world. They have been recognized in both developed and developing countries as an effective tool for creating employment opportunities with a small amount of capital investment. Same like big and multinational companies, small and medium enterprises also face a lot of challenges and problems, which also involve human resources issues. SMEs face different kind of HR problems such as: hiring qualified people, retaining them and developing managers and employees. To deal with those problems small and medium enterprises can use executive coaching as a tool. Coaching can be an important tool in order to increase performance of the executive within the SMEs. Some previous researches have shown that coaching is an effective tool in small and medium enterprise. However, coaching has also some limitations such as: lack of business and industry focus, high investment cost and lack of internal insight.

Previous papers, surveys and research suggest other tools in order to support executive coaching in SMEs; one of them is mentoring. Mentoring is an age-old practice of transferring knowledge and experience through personal relationships. This tool can complement EC, for example the lack of internal insight can be supported, because the mentor as an additional internal player; is familiar with internal political situation. It is proposed to combine mentoring program and executive coaching sessions because it can help SMEs to overcome human resources problems.

= Bibliography =





































= Citations =

= Researchers =


 * Ana Milena Fernandez
 * Waldorf Pasadaroha
 * Yerzhan Ospanov
 * Ana Maria Guzman