The Zero-Defect CEO

Cover Story

Smart managers have already removed the defects from their businesses. Now they're using big-league business coaches to do the same for themselves

Kay Stepp jettisoned a high-paying and high-profile corporate job for one achingly simple reason: she had better things to do. Not that she knew what they were. "I wanted to take on worthy work," says Stepp, who had been running an $800-million utility.

Defining what she meant by that propelled her on a journey that involved both pleasure (Italy, Southeast Asia) and pain (golf lessons that "didn't take") as well as a near U-turn that threatened to land her back in the utility industry in early 1994, more than a year after her initial exit. She was one of two remaining candidates for the CEO spot at another utility when she snapped to her senses. "I got hold of myself," says the former president and chief operating officer of Portland General Electric Co. (PGE), in Portland, Oreg. "I got real clear."

Further clarity came from meetings at which Stepp, who "always had a great need for feedback," systematically polled her former colleagues on one question: "What was it I did that made me successful?" Their answer: "modeling leadership"--helping those around her get things done by conveying a firm sense of priorities.

That sounded both worthy and marketable--but marketable to whom? Stepp met one-on-one with some CEOs and executives she knew to gather more information. "I'm in the process of defining my next work," she'd begin, before peppering them with questions about their jobs: What was going on in their industry? What management issues bothered them most? The more they talked--about how speedily their industries were changing, how much harder their jobs were becoming, how the endless urgencies robbed them of any time to think about what mattered--the more questions she had. "Informally, I fell into a kind of role," she recalls. "All of a sudden, I said, 'Maybe there's something here.' "

Eager to "let people around town know I was doing something," Stepp says, she showed up at local meetings like the Oregon Women's Forum, where she met Deborah Coleman in the summer of 1994. Around the same time as Stepp's highly publicized departure from PGE, Coleman, a creature of Silicon Valley, had defected from her high-ranking post at Apple Computer, opting for a job that would ultimately lead her to remote Forest Grove, Oreg., to take the helm of newly formed Merix Corp., a maker of advanced electronic equipment that had been spun off by giant Tektronix. The two women were both trailblazers: in 1989 Stepp had become the first woman to run a public utility; three years earlier Coleman, then 34, had been the youngest chief financial officer in the Fortune 500.

Now each was venturing onto untried ground again. Coleman, with about three months as chairman and CEO behind her, had recently guided Merix through a public offering and was looking to develop her management team at the then $70-million company. Stepp had just gone into business for--and by--herself. She explained that her new venture, Executive Solutions, wouldn't be offering management training; nor would she be playing the role of consultant, rushing in to rub a ready-made salve on a readily diagnosed ailment. She talked instead of "leveraging my experience" to act as an "independent consultant to senior executives" to help them create "a learning environment."

Hearing that description, Debi Coleman might have assumed that her new acquaintance had been forcibly brainwashed by a posse of mushy-mouthed management gurus. But Coleman, so intent on bettering herself that she lists her managerial weaknesses on flash cards, sensed that Stepp could teach her valuable lessons.

Soon after, Coleman did more than just hire Stepp. She also gave her a label, tying her to a phenomenon that Stepp was barely aware of, branding her a practitioner of what Coleman declares to be " the management tool of the 1990s," dismissable only by CEOs who cannot bear to confront "the organizational dysfunction" they've sown with their lack of awareness about how their own behavior leads to chronic problems.

"Debi started calling me her coach," recalls Stepp, who is 52. "And it seemed to fit."

E. Kay Stepp certainly didn't invent the concept of business coaching, and she's far from its most ardent advocate. "I've always shied away from labels," she says.

But the need she spotted and the approach she takes to fill it exemplify the best aspects of what's fast becoming a familiar tool among entrepreneurs. "What I'm trying to do is to remove the blind spots," Stepp says. "I'm making people more aware of their own behavior, so that they can function more effectively." CEOs, having removed the defects from their factories, are now looking to repeat that feat with their psyches. "Everybody's getting better and better at everything: their knowledge of customers and markets, their knowledge of technology, their analytical skills," contends Coleman. "The way they haven't kept up is on the people side."

If the encroachment of coaches into the entrepreneurial community seems inevitable, it's not just because various species of nonathletic coaches --focusing on financial or executive or career issues--have grown to number around 1,500 over the past decade. Nor are CEOs hiring coaches simply because the word itself sparks such warm associations: that whistle-bearing blowhard of yore whose habit of screeching "drop-and-give-me-50" now looks like the selfless, if deafening, expression of a drive to excel. Having a coach licenses even the most anemic entrepreneurs to begin drawing parallels between themselves and those other rich and famous business tycoons, professional athletes.

Suspicion about coaching runs deep. The trend exists, some will claim, only because a crafty group of opportunists--consultants desperate to deflect the bad karma of reengineering, perhaps, or psychotherapists seeking a Trojan horse that could deliver them inside the brains, and bank accounts, of hard-to-attract clientele--pounced on an appealing word. Ask around, and you'll hear coaches likened to hot-line psychics, teddy bears, and radio shrinks. They don't always come out ahead.