Why All Coaches Should Be Paid Per Performance Only

I believe that many leadership coaches are paid for the wrong reasons. Their income is a largely a function of "How much do my clients like me?" and "How much time did I spend in coaching?" Neither of these is a good metric for achieving a positive, long-term change in behavior.

I have never seen a study that showed that clients' love of a coach was highly correlated with their change in behavior. In fact, if coaches become too concerned with being loved by their clients - they may not provide honest feedback when it is needed.  When it comes to time, my personal coaching clients' are all executives whose decisions impact million of Euros or Swiss Francs and their time is more valuable than mine. I try to spend as little of their time as necessary to achieve the desired results. The last thing they need is for me to waste their time! 

I have an unusual arrangement with my coaching clients. They only pay me if they get better - meaning they achieve positive, measurable change.

The catch? The client doesn't determine if he or she is "better." Their key stakeholders (bosses, colleagues, direct reports, spouses, and others who work with them closely) do. This compensation system gives everyone - coach, client, and stakeholders - an important role in the process.

This "pay-for-results" idea wasn't mine. It came from my father. And this story resonates very well with my practice today.

I grew up in Switzerland and when my father decided to return to his homeland of Portugal, I had no choice but to follow. My father operated a one-man "handy-man" company, and during my summer holidays he invited me to join him so I could earn some cash of my own. One summer, we were tasked of paving a driveway floor with tiles.

It was a blazing hot summer in Cascais, and this was HARD work! I watched my father as he took great care in laying each title. He was patient with me, despite my mistakes. He helped me learn to do the job right. I looked forward to working with my father every day, and my initial begrudging willingness to do the job turned into a deep sense of pride in what we were doing.

When we finished, I thought the driveway looked great. My father presented the property owner with his invoice and said quietly, "Luis, please take your time and inspect our work. If you feel that this paving meets your standards, pay us. If not, there is no charge for our work." And he meant it.

Luis looked carefully at the driveways, thanked both of us for a job well done and paid my father, who then paid me for my help. I will never forget watching my father when he asked Luis to pay only if he was pleased with the results. I knew he was dead serious. I was only 16 years old, but the incident made a huge impression on me. He not only was confident on his work, he had class. When I grow up, I want to be like my father.

How much would not getting paid have hurt my father? A lot. My father's pride and integrity were more important than money, and he had enough faith in the quality of his work, and in Luis, to make the offer he did.

My father didn't use buzzwords such as "empowerment" or "customer centricity." He didn't give pep talks about quality or values. These were unnecessary. His actions communicated his values better than any buzzwords could.

The next time you are working on a project, ask yourself, "What would happen to your level of commitment if you knew you were only going to be paid if you achieved results?"

Think about it. How would your behavior change?

My father taught me a lesson I will try to live up to for the rest of my life. What is important is not how much he impressed me. What is much more important is that he looks with pride at the person he sees in the mirror every day.