DO YOU NEED AN EXECUTIVE COACH?
Forbes 2007
You may be a brilliant negotiator, a financial whiz or a technical genius. But do you have what it takes to manage other high-level employees? If your communication skills have been a sore spot during your annual reviews, a leadership coach might be able to help.
Once a tiny industry, dominated by boutique firms, leadership coaches have moved into the mainstream. In August, headhunting company Korn/Ferry International (nyse: KFY - news - people ) spent $24 million to purchase Lominger, a Minneapolis-based leadership development company. Korn/Ferry expects the deal to add 3 cents to earnings in 2007.
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This week, the company announced it would acquire LeaderSource, a coaching company from the same city, owned by Forbes.com columnist Kevin Cashman. Terms were not disclosed, but it was a smaller deal; LeaderSource, which was founded in 1977, had 2006 revenue of $3.5 million.
Heidrick & Struggles (nasdaq: HSII - news - people ), the other large, public executive search company, has also moved into the leadership coaching space, though less aggressively than its competitor. Heidrick's "leadership consulting" division brought in about $9 million in 2002, and this year it expects that to grow to $15 million, or 3% of revenue, according to Eileen Kamerick, the company's chief financial officer.
The trend is driven partly by demographic shifts. In North America and Europe, the executive-age population--i.e., baby boomers--is nearing retirement. Companies need to start focusing on developing internal leaders, rather than just recruiting from the outside.
"There is going to be a real premium for companies to try to retain talent," says Mark Marcon, an analyst with Robert. W. Baird. "And the talent out there to replace the people retiring is going to be scarcer and scarcer."
Meanwhile, India and China are growing faster than their business schools can churn out candidates. While the twin tigers are developing a large class of professional workers, the executive ranks are still thin.
"It's going to take another generation before they have enough management talent," says Peter Felix, president of the Association of Executive Search Consultants, which recently published a survey about the executive job market worldwide. "It takes a whole generation to train effective, modern management."
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