One of the hallmarks of highly effective executives is their willingness and ability to act proactively regarding their own and their employee’s professional development. I am constantly amazed, however, about the frequency in which we (I refer to my colleagues in the Society of Consulting Psychology of the American Psychological Association) encounter organizations that only begin to provide developmental help (training) for their employees when they get in trouble.

My first entrée into most organizations is to be called on to help save a derailed executive; to help that executive get back on track before he or she loses their job. Occasionally, I have turned down executive coaching gigs after conducting my initial assessment because I’ve determined that it’s simply too late to help the executive. Unfortunately, the executive has burned too many bridges and even if they made a 180 turnaround, their colleagues simply hated them too much to give the executive another chance. What a waste of talent and money.

So, the big question is, why do organizations wait so long and why aren’t they more proactive? The most obvious answer is…the executives who control the purse strings don’t want to spend the money for whatever reason…and they have plenty of reasons. Never mind that the replacement cost for a single derailed senior executive can easily be in the hundreds of thousands of dollars (according to TRW and other sources).

The old saying goes that a picture is worth a thousand words…so today I’ll draw a graph and tell a story. I’m going to build a case for how you can get more for your money.

Let’s take a typical example. Executive B was hired with great expectations, having had a work history of above average performance at his previous employers. However, after about one year on the job at Widget International he began to falter. His performance began to go down hill and his peers began to complain to the CEO about B’s attitude. A couple of B’s direct reports gave notice and during their exit interviews they complained about B, saying he was a micromanager and wouldn’t accept any feedback that didn’t agree with his point of view. Sound familiar? It’s an all too common occurrence. The CEO met with B and told him that he needed to change and that they had hired an executive coach to work with him.

The executive coach conducted a thorough assessment, which included a 360 multi-rater survey that was used to establish a baseline read on B’s performance. B started off with an overall average rating of 2.75 on a scale of 5 on the 360 survey. Using the results from the assessments to guide them, B and his coach developed and implemented an action plan to help him turn things around. Six months later, B was back on track and his follow-up 360 showed that he had made a remarkable comeback. He had climbed back to slightly above average achieving an overall rating of 3.5 on a 5.0 scale. Everyone was pleased with the results. A $250,000/year executive was saved. The fact that they saved having to spend another $75,000 (30% retained search fee) on recruiting fees, not to mention had stopped the costly cascading effect of losing employees due to his poor management style, was greatly appreciated. Employees stopped abandoning ship around him, which saved additional recruitment fees, etc. The coach was a hero and went off riding into the sunset.

Now let’s look at executive A. She is an above average performer who was identified by senior management as a “high potential.” The CEO of Stellar International was known for developing up and coming executives and that was one of the main reasons A left her job at Minihard Technologies where she was bumping up against a “glass ceiling.” The CEO hired the same executive coach who had worked at Widget International after hearing rave reviews of his work there. The CEO asked the coach to custom design a leadership development program for A. Just as he had at Widget International, the coach began working with A by conducting a thorough assessment including the same 360 multi-rater survey he used with executive B. A – not surprisingly – received an overall 3.5 rating on a scale of 1 to 5. That was her baseline starting point. The coach, drawing from the same tool bag as he had used with executive B, designed and implemented an action plan. Six months later, they conducted a follow-up 360 multi-rater survey and A’s overall average had moved up to 4.25 on the 5.0 scale. Her department was producing great results and employees from other departments within Stellar were vying for promotions into A’s area. They wanted to work for her. A year later Executive A was promoted into a VP position.

Both outcomes are common for top-flight executive coaches. What’s significant is that by applying the same effort and skills to differing situations we achieved similar positive results except that the star performer is now even more of a star. Imagine what would happen if you provided that type of developmental help to all your star performers rather than just to your problem children. Look at the graph at the top of the page. If you put the same effort into performance development you would expect to get equal lift in performance assuming all other things are equal (basic abilities, knowledge, etc.).
 
B started coaching at a lower point than A and was brought up a greater distance than the distance A achieved. However, B started and finished lower than A.
 
A, as you see in the graph, started at a higher level than B. A, as a result, will continue to outperform B because she started at a higher point. B, however, experienced a greater relative percentage gain. Consequently, the people around B experienced his change as more significant.

The reason for this is that change on a derailed executive’s part is much more obvious. You know how the old saying goes that it feels so good when you stop banging your head…it’s sort of like that when progress is made with a derailed executive. Coaches who work with derailed executives tend to look like miracle workers because improvements are much more dramatic than what you see in executives who already operate at above average levels. With the top performers and high potential employees, it is harder for those around them to notice positive change because it already feels good from the get go to be around them.

So what does all this mean? Simply that it makes sense to allocate training and development money for the development of top performers and high-potentials because they will perform even better. The best analogy I can think of is to think about Olympic athletes and how they are able to continuously achieve new records beyond what anyone can imagine, and…they all have coaches who help them fine-tune their skills and performance. You will also create and foster an environment where top performers will want to work because top performers always want to get even better. Lastly, coaches who work with derailed executives charge more because it’s very difficult work. Therefore you’ll get more bang for your money if you spend it on developing your top performers and high potentials.