Mentorship vs Coaching: Which is best?

Key Takeaways

• Your business may need outside help for a significant management problem.

• You have many options: mentorship, coaching, training, consulting and advising.

• Mentorship and coaching are often micro-interventions.

• Advising is often helpful with longer-term issues, as with succession in family firms.

Ralph and his wife built a successful hardware supplies company and wanted to retire. They had two children who worked in the business since they graduated from university. Siblings Jennifer and Harry had some of the skills to manage the day-to-day operation. The children lacked some management and leadership qualities that bothered the elderly entrepreneurs. In addition, Ralph and Juliet are unsure if they are ready to take the mantle. They faced another issue: which of the two kids could lead the business? 

Sometimes, business owners need external management assistance to support their business. This expertise can take many forms. Consultants typically are engaged for a short period and develop specific solutions. Advisors for family businesses are different from consultants in that they are frequently hired for a more extended period and deal with organisational change. They would develop a succession plan and support key members through the process, which could last months or years. 

Training can be helpful when specific skill development needs in-depth support, often in a group scenario with facilitator-to-peer and peer-to-peer learning. Learning can be through case studies, simulations, or field assignments, with a final project demonstrating learning. 

Mentorship & Coaching

Mentorship is more diverse than coaching, as you need multiple industry expertise. While coaching is less active than mentorship, the former guides the coachee and lets them find their way. Karena Sukhu, a certified coach with the International Federation of Coaches (IFC), thinks, “Mentorship, however, involves a mentor with experience in the unique challenges and opportunities of family businesses, transferring knowledge to equip the mentee with the capacity to navigate their role effectively.” Coaches start by allowing clients to find their goals and support them. In the case of siblings Jennifer and Harry, they must search for their life and business goals and explain why this is important.

Coaching tends to focus narrowly on leadership and communication with scheduled guidance sessions. Jennifer might be a good communicator as an English major; however, her leadership style is too laissez-faire, with little supervision and delegation. Harry, on the other hand, a Marketing major, focuses on sales and drives his team to higher performance, sometimes to the extent that they are stressed with diminishing returns. 

Mentorship

Mentorship intervention looks at Jennifer and Harry from a skills development perspective. Jennifer, being older and having spent more time in the family business, understands the staff well but does not have the competency to drive performance in the office or field sales. She does not understand the market as well as Harry, an outside-oriented person. However, she will need a better external view to lead the organisation effectively. In this case, a mentor with a strong marketing background can upskill Jennifer in marketing analysis and development, manage the sales team and hold them accountable for target achievement. 

Harry may need mentorship in hiring salespeople and motivating them to perform better. He might also need to understand the office dynamics and supply chain management as he sometimes forgets to follow up on inventory levels. His myopic view of management as only marketing means he focuses on sales and less on service. A mentor can assist in developing the service department for returned items and dealing with customer complaints. 

Coaching

Mentorship involves a mentor with experience in the unique challenges and opportunities of family businesses, transferring knowledge to equip the mentee with the capacity to navigate their role effectively. A coach will approach the development of Jennifer and Harry’s competencies (or lack thereof) differently. A coach will set up regular sessions and determine what the clients want to achieve and the value of their goals. This discovery approach will have more questions than answers.

“Coaching is client-driven, person-focused (not problem-focused), and structured. A Coach is not required to be an expert in family business dynamics but must be highly competent in partnering with individuals to build relational skills, achieve clarity, and take confident steps toward their goals,” says Sukhu.

Coaches think their clients must find what they seek by standing on the sidelines. Jennifer needs to explore different management styles to gain trust and drive her management team. She also needs to break away from her parents’ protection. By developing her style, Jennifer can feel a sense of ownership as she discovers this pathway, which tends to stick more than an imposing one. 

Ralph and his wife face another issue. Who do they choose to be the company’s next CEO? Is it going to be Jennifer or Harry? The odds favour younger Harry as males, even in family firms, tend to inherit the business and be the leader. Jennifer may lack marketing skills, but she has good leadership potential. 

Who is going to lead?

Despite the advantages of mentorship and coaching, neither may be able to assist the founders in objectively deciding who will be the next CEO. Ralph wants his daughter, and his wife wants the other child. The evidence is strong that the son will get the top position even though he may not be best suited—sexism is also an issue with family firms. Have you ever seen a company named Joseph & Daughter Limited? This dilemma that family enterprises face can lead to discord as it shows favouritism. This situation requires an advisor to guide succession. Succession planning in a family business differs due to the critical role of the family. 

While some advisors may provide mentorship or coaching, they often deal with the big picture—succession planning, governance, strategic planning, conflict, and growing the business holistically—which are key issues for long-term success. In our case, families may consult with an advisor to determine how to select a leader. The advisor may suggest that a job description and selection criteria be established. Further, they might ask if the family candidates are ready. If not, can a non-family member, internally or externally, be selected, and how does it impact the family dynamics?

Successful family businesses exclude non-competent family members from continuing the business. The advisor may recommend that the firm consider the option of co-CEOs. While this seems froth with possible conflict, it is more common with family enterprises than their counterparts. The family socioemotional wealth concept explains why this is possible—they value the family dynasty over financial value.

Whether you choose a mentor or a coach depends on what the receiver of the intervention wants and the family firm’s goals. Sukhu says, “Coaching and mentorship complement each other; being coached positions family business owners to gain the most from being mentored, enabling both personal and business growth.” If you find a coach or mentor who is so valuable to your family business, you may even consider a board position. Successful family enterprises often seek externals as an independent who brings industry expertise. Ralph’s family business now has more options to navigate the complexities of a family firm.

SME & Family Business Advisor & Fellow of the Family Firm Institute.

Sajjad Hamid is an entrepreneurship educator who supports entrepreneurs in scaling their ventures. In his spare time in Trinidad and Tobago, he tries to produce organic tropical fruits and vegetables and practise sustainable farming in his home garden.

His book, Build Your Legacy Business: Solopreneur To Family Business Hero, combines entrepreneurship and family enterprise. 

Build Your Legacy Business: Solopreneur To Family Business Hero.

You can contact him at [email protected]