Monday, July 18, 2011

The “Next Hill” in Talent Management Software?

Let’s begin with a few data points as a backdrop:

• In the US, 93% of US-based Global 100 companies use executive coaches (Bono, Purvanova, Towler, & Peterson, 2009).

• Between 40 and 60% of Fortune 500 companies use executive coaches, according to research by consulting firms such as the Hay Group and Manchester.

• As of 2008, there were approximately 12,300 business/executive coaches in North America (Frank Bresser Consulting Report, 2009).

• On January 1st, 2011 the very first Baby Boomers turned 65. As many of the occupants of this group are perhaps no longer fitting into the plans of their employers -- or no longer desire conventional, very demanding job situations -- a portion of this group will be parlaying their experience (along with appropriate certifications) into becoming independent executive coaches. This will further swell the number of independent executive coaches as referenced above.

While the supply of business / executive coaches keeps climbing, demand is also significantly increasing – principally due to two factors:

• The inexorable exodus of baby boomers is resulting in unprecedented numbers of key employees having gaps in their professional and/or management development … particularly within organizations that have not institutionalized mentoring and experience-transfer programs.

• More organizations are now promoting a culture of transparency, self-awareness and personal growth, particularly with people-managers … as their strengths and developmental issues likely affect the productivity, retention and engagement of everyone around them.

The proliferation of organizations using coaches is no surprise, since industry studies continue to report that the average ROI for companies investing in executive coaching can be seven or more times the investment made in these services. Although once used as an intervention with troubled staff, indeed coaching is now part of the standard leadership training for executives in such companies as IBM, Motorola, J.P. Morgan Chase, Hewlett-Packard, Google and many others.

So is the effective procurement and management of independent coaching engagements truly the next frontier (or next hill) to be conquered in the HR software market? That remains to be seen, but I personally believe that technology-enabling this highly strategic Talent Management ‘niche domain’ will - at the very least - start getting more attention than it ever has to-date.

After all, few if any HR/Talent Management software applications focus on capturing major cost savings/efficiency gains while simultaneously focusing on improving the quality and productivity of key talent throughout the enterprise. Most HR leaders today cannot tell you how much coaching is happening in their company, how much they are spending, what the coaching engagement is about, or whether it is working.

A relatively new company called Scout OnDemand is aiming to change all that.

Scout’s technology allows the streamlining of coaching fee structures, intelligent matching of coaches with individual coaching needs -- and perhaps most important given how many employees are typically affected by the recipients of external coaching – provides customers with solid assurances that coaching engagements are properly measured and managed for desired results.

In addition to providing best-in-class SaaS-based solutions for addressing the aforementioned business problems, Scout OnDemand’s mission is to also educate organizations utilizing external coaches that current models for providing key talent coaches are exploitive in terms of cost. This is basically due to the fact that numerous (“middleman”) companies today provide access to a network of independent coaches for a fee comparable to executive search firms, but most don’t do an effective job of matching, managing and measuring these pricey engagements – often exceeding $500 per hour.

Scout also believes their solution will have the impact of expanding the use of coaching in organizations way beyond senior executives. By making coaching more manageable, transparent and affordable, it will become feasible for companies to employ coaching more widely – for managers and supervisors, high potentials, and also to complement key training programs.

Just as organizations are now extending the use of enterprise software to facilitate social collaboration / social learning / socially-rooted innovation, it certainly seems that rapidly changing corporate cultures, management styles and demographic shifts might usher in yet another new Talent Management technology domain.

I am excited to now serve as one of Scout OnDemand's Board Advisors; and they can be contacted at

Steve Goldberg
HR Technology Industry Advisor
July 2011

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