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AI Brings Coaching to the Masses

September 08, 2021 Learning and Development
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By Sarah Fister Gale

Venture capital firms have been pouring money into HR tech for the last few years, and their latest obsession is coaching. The market is booming with technology-driven coaching platforms that merge artificial intelligence with human interaction to make coaching more accessible to everyone.

The timing is ideal. While the trend began before the pandemic, widespread remote working and the increase in hybrid work arrangements made technology central to the increasingly digital workplace. That holds true for coaching and employee development as well. To add to the urgency, the experience of working through COVID-19 also clarified the link between mental health and workplace productivity.

“COVID helped businesses realize that if their employees’ mental health isn’t solid, they will be less empathetic, less creative and less innovative,” says Jacinta Jiménez, vice president of coach innovations for BetterUp, a coaching platform that combines behavioral science, AI and human interaction for personal growth and professional development.

Coaching can give employees the personal and professional support they need to overcome mental health issues so they can bring the best version of themselves to work. “You can’t optimize performance without addressing mental health,” Jiménez said.

However, until recently formal coaching has been treated as an executive perk rather than a driver of worker productivity. “It is either offered to high performers to keep them happy, or as a remedial tool for high performers who are jerks and need to improve their leadership skills,” she said.

Coaching Is a Fundamental Development Strategy

This spotty approach causes companies to miss out on a valuable development tool that can provide personalized development to young leaders before they develop habits that need to be unlearned. 

“It’s so much more beneficial to the organization if you develop leaders at all levels,” said Jessica Crow of Apogy, a change management training, coaching and consulting firm in Denver. “Having someone to guide them and give them feedback accelerates their performance.”

Making coaches accessible to everyone can also tackle a form of unconscious bias commonly embedded in corporate workflows, Crow said. When coaching is reserved for people who have been identified as high performers, it tends to go to those who’ve already enjoyed the privilege of a good education and opportunities to develop their leadership skills and networks. Meanwhile, employees with raw talent can go unnoticed.

“It would be so valuable if the hundreds of employees who didn’t have those early benefits received access to coaches as well,” she said.

In the past, such a democratized approach to coaching was considered prohibitively expensive or too time-consuming to be realistic for all employees. But the advent of automated coaching tools and digital platforms are transforming that value proposition, making coaching for the masses a realistic option.

Related Article: The Future of Employee Coaching Is Now

Artificial Intelligence Extends the Human Coaching Experience

The coaching platforms gaining the most attention use artificial intelligence and automation to reduce the time and cost burden of engaging professional coaches. In most cases, human beings still do the actual coaching, but technology streamlines the process of matching employees to coaches and automates reminders, reporting and assessments.

That frees coaches to focus more time on one-on-one engagements. Some coaching products also use AI to bolster the value of one-on-one coaching through practice activities.

“The AI augments the training, to remind users to practice their skills in real life,” said Matt Barney, CEO of LeaderAmp, an AI-enabled coaching platform that combines automated tools with live coaches.

For example, LeaderAmp's Clone Coaches push suggestions to users on skills to reflect on or new behaviors to apply, and it monitors how often users engage in these activities.

“Extending the human relationship using artificial intelligence is the future of coaching,” Barney said.

Related Article: Coaching Employees in the Remote and Hybrid Work Environment

Technology to Bring Coaching to the Masses

Venture capitalists are making big bets that such tech-enabled coaching solutions will soon become the norm. BetterUp won the most attention and investment, including a $125 million Series D round in 2021 led by CONIQ Growth. That deal brought their total venture financing to $300 million and put the company into tech unicorn status with a valuation of $1.73 billion.

One reason for BetterUp's surge is their approach to tech-enabled coaching. BetterUp uses AI and automation to help employees find support for all types of coaching needs, from developing traditional leadership skills to dealing with work/life balance challenges, sleep issues or depression. The company’s algorithms assess each user's needs and then matches them to a human coach and an engagement format that aligns with their goals. 

“We believe everyone should have a coach, especially emerging leaders,” Jiménez said.

The company reported that members who begin with low productivity ratings average a 114% increase in productivity within three to four months, and they record a 32% increase in employee experience.

“We can track behavior change in aggregate, which speaks to the power of human interaction augmented by technology,” she said.

Related Article: Learning Technology's Growth and What It Means

Coaching Technology Funding Continues to Grow

The combination of AI, trained coaches and rich data to prove results made BetterUp an early darling of venture capital firms looking to invest in coaching. They've since spread the wealth to support other promising tech-enabled coaching startups. 

In August 2021, on-demand coaching platform Bravely closed a $15 million Series A funding round to support its mission to provide “universal access to coaching.” And in 2020, AI-driven digital platform CoachHub secured $30 million from Draper Espri, following a $20 million round the previous year. Like Bravely and BetterUp, CoachHub aims to make coaching “accessible to employees at all career levels.”

Early startups are also getting attention from big funding firms who are offering lucrative seed funding. In March 2021, Reddit cofounder Alexis Ohanian’s venture fund Seven Seven Six led $2.4 million in pre-seed funding for The Grand, a startup group career coaching platform focused on fostering empathy in the professional world. In 2019, DDI Venture Group’s innovation fund invested an undisclosed amount in CoachLogix (now Coaching.com), a platform for finding, tracking, managing and evaluating coaches.

“Companies can’t afford to have employees not performing at their best,” Barney said. “AI can be part of that solution.”

For companies who want to bring AI-enabled coaching to their employees, Jiménez said they should focus on how these tools can help them address employee engagement, retention and performance.

“If you take care of your people they will do better work,” she said. “That’s how you build a business case for coaching.”

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