Coach in locker room, standing in front of chalkboard

By Revel Gordon

Coaching has become a ubiquitous and powerful tool to develop an organisation’s human capital. This trend was led by large organisations, and we are now seeing strong take-up of coaching amongst small and medium sized businesses as well. This article looks at the factors to consider when deciding when to use an internal coach and when to call in an external coaching expert.By


A key to unlocking growth within small and medium sized businesses is for the organisation’s MD and her/his direct reports to take a coaching-oriented approach to leadership. Often the founders of businesses are deep subject matter experts in their fields, so when junior staff come looking for guidance, it is tempting to simply tell them what to do.

While this approach works in the short term, it does not scale over time. Giving team members ‘the answer’ every time they come for help sends the subtle message that they aren’t able to come up with answers for themselves. In 80% of cases, this is not true, especially if you have hired capable (if perhaps inexperienced) people. A highly directive leadership style may work when you’re running a very small business, but once your managers have people reporting to them – say 10-15+ FTE’s – it becomes a major barrier to growth.

Leaders should aim to empower their people to come up with answers for themselves, most of the time. There are some simple, highly effective coaching approaches that any manager can learn that will achieve this. A five minute investment in ‘in-the-moment’ coaching can have a transformative impact on the business. By empowering her/his people, the leader is freed up to work ‘on the business’ rather than ‘in the business’. If you run a small to medium sized company, having an experienced coach trainer come in to train yourself and your direct reports on how to coach your employees ‘on-the-fly’ is one of the most valuable investments you can make in driving growth.

Skills Coaching

Another area where in-house resources can be effective is basic skills coaching. Many HR professionals have experience in coaching employees in negotiation techniques, time management and so on. Larger corporates including banks and insurance companies have started employing in-house coaches to sit with front-line staff to provide real-time feedback on topics like objection handling and how to improve customer service.

Complexity Requires External Coaches

As the nature of the coaching becomes more complex, external experts should be called in. This applies to performance coaching (such as teaching leaders how to coach their people) and for all developmental coaching (where leaders are challenged to expand their perspectives in order to take on more complex roles and thrive amidst volatility, uncertainty and change).

The complex and nuanced nature of this work requires the skills of an appropriately trained and deeply experienced executive coach. There has been an explosion in the quantity and quality of the coaching evidence base over the past decade, and external coaches have – or should have – a rich set of tools upon which to draw, and plenty of experience in applying them. The International Coach Federation’s Professional Certified Coach and Master Certified Coach credentials are a useful initial filter when selecting external coaches, as they provide certainty around the coach’s training, ethical awareness and actual coaching experience. Real-world business experience is also an important ingredient for effective coaching.

Courses such as the Master of Coaching Psychology program at Sydney University (which I found to be both fascinating and immensely valuable) and Wollongong University’s Master of Business Coaching are also good indications of coach training, though it is important to check the coach’s actual level of experience, as these courses focus on coaching theory, and by their nature cannot include much actual real-world coaching practice.

Power Imbalances

Internal coaches can work effectively with junior employees and potentially with emerging leaders. However, it is very difficult for an in-house coach to work with more senior leaders. Coaches need to challenge their clients. There needs to be ‘heat’ in the conversation. The power imbalance inherent in a situation where an internal resource is trying to coach the CEO or member of the top leadership team – people who may be several levels above them in the organsational hierarchy – makes this difficult to achieve.

Conflicts of Interest

Coaching conversations need to be truly confidential. I tell my coachees that there are only three circumstances under which I would share what they tell me with someone else:

  1. If he/she asked me to;
  2. If I believed the coachee was at risk of harming her/himself or others; or
  3. If I was required to do so before a court of law.

This ensures that the coaching engagement is a safe place where the coachee can be completely open and frank, which is crucial in supporting meaningful, impactful behavioural change. Some of the topics that often come up in coaching conversations include business strategy, restructures and redundancies, effective leadership, sensitive political topics, and highly personal matters.

It is frankly unrealistic to expect an executive to openly discuss these issues with someone who is ‘coaching’ them one minute, and then managing their performance review the next. Even assuming the internal coach has nothing but the best of intentions and is a highly experienced coach, the inherent conflict of interest between their role as ‘coach’ and their role as, for example, HR Manager make these very murky waters indeed. For CEOs and Managing Directors, there are certain conversations it is almost impossible to have with members of their own organisation. An external coach who has no formal role within the organisation is an invaluable resource in these situations.


Professional executive coaches bring the added value of having worked with senior leaders across a wide range industries, business sizes and geographies. They will have seen a wide range of situations play out and bring this wisdom and perspective to the coaching conversation. They should have the experience and courage to call out risks and opportunities as they see them, and then draw on a wide range of coaching approaches to support their coaching counterparts to clarify a path forward

Coaching plays a key role in helping individuals and organisations grow and flourish.  Internal coaches can be extremely effective (and cost effective) in delivering basic skills coaching. Leaders should also aim to develop their coaching capabilities to help empower their employees to make most decisions on their own. They should consider engaging an experienced coach trainer to build these skills. For more complex coaching engagements, and/or where the coaching is aimed at senior leaders, then an experienced and highly qualified external executive coach should be engaged. The benefits will flow not just to the individual, but to their team and the whole organisation.

Revel Gordon is a highly experienced executive and team coach, coach trainer and facilitator based in Sydney. He works across Australia and the Asia Pacific region. Clients range from multinational corporates to fast-growing SMEs.  In addition to his coaching practice, Revel is a Director of the International Coach Federation Australasia, the world’s leading coaching body.