Business Coaching Only Works When Coaching and Entrepreneurship Come Together

A young entrepreneur once told me during a conversation that he was still the central hub of his business. Almost every important decision ended up on his desk. Employees asked for his approval, clients wanted to speak to him and whenever uncertainty arose, everyone automatically looked in his direction.

You could interpret that as an inability to delegate. But that would not have done justice to his situation.

In just three years, he had grown from a one-person business into a company with eighty employees. An impressive achievement, but also a level of growth that demanded a completely different way of working. The company had changed. His role had not changed enough.

The difficult part was that he still knew more than almost anyone else about nearly every part of the business.

You often see this with entrepreneurs who have built something from the ground up. In the early days, you have to be a generalist. You deal with clients, products, pricing, marketing, employees, finance and whatever happens to catch fire that day.

Eventually, you may no longer know more about any single discipline than the best specialist in your company. But you still have the better overview. You understand how a decision in one area affects everything else. And because you are the owner, you can make decisions quickly.

That makes you valuable.

It also makes it dangerously easy to become indispensable.

From Strategic Sparring to Business Coaching

Our conversation began as a strategic sparring partner session. We explored how he could organise his company differently and which responsibilities he could transfer to others.

But it soon became clear that a new organisational chart alone would not solve the problem.

This was not only about roles and responsibilities. It was also about trust, leadership, control and the role he still wanted to play himself. He knew something had to change, but not every logical solution would suit him, his employees or his company.

At that point, the conversation shifted from strategic sparring to business coaching.

For me, business coaching sits at the intersection of coaching, mentoring and strategy. I bring in my own experience as an entrepreneur and strategist, while continuing to ask the questions that help the entrepreneur develop his own insights.

It may sound like a subtle distinction.

In practice, it is essential.

My Nearly Fatal Decision to Add a Management Layer

I recognised a great deal of his situation.

I, too, once reached a point where my company had become too large for me to remain involved in everything. The solution seemed obvious: introduce a professional management layer.

I appointed business unit managers, or BUMs as we called them. Each became responsible for a separate part of the company. On paper, it looked sensible. Responsibilities were distributed, the structure was clear and I would finally have the space to focus on the bigger direction.

In practice, it was an almost fatal decision for the type of company I ran, an advertising agency.

People began doing only what fell within their strictly defined responsibilities. Where colleagues had previously helped one another in a hands-on way, boundaries appeared between departments and areas of responsibility.

“That doesn’t belong to my unit.”

“Another manager is responsible for that.”

“We need to schedule a meeting first.”

Meetings produced more meetings. Decisions that had once taken minutes suddenly took days. Sometimes weeks. The management layer that was supposed to create speed and clarity mainly organised distance and delay.

After one month, I pulled the plug.

I dissolved the management team and moved towards a form of self-management and distributed leadership that we would later describe as holacracy. Responsibility was placed much lower in the organisation. People no longer needed permission for every decision, but they did have to learn how to carry responsibility themselves.

That required more than a different organisational structure. Above all, it required a different attitude.

From me.

From the people taking on leadership.

And from everyone accustomed to having someone above them make the final decision.

We therefore invested not only in a new model, but also in individual coaching and leadership development. People had to learn how to deal with freedom, responsibility, uncertainty and differences between one another.

That combination ultimately created far greater internal harmony. The company expanded across three continents and worked for some of the biggest brands in the world.

It worked for me.

But that did not automatically make it the right solution for the young entrepreneur sitting opposite me.

My Experience Is Not a Manual for His Business

I could, of course, have advised him to do exactly what I had done.

Remove the management layer. Distribute responsibility. Introduce self-management. Develop leadership at an individual level.

I had lived through it myself. I knew which mistakes I had made and which solution had eventually worked for my company. I had also seen similar growth problems several times since.

But his company was not mine.

His employees were different. His market was different. His personality was different. Perhaps his company genuinely needed a strong management layer. Perhaps his employees were not yet ready for greater independence. Perhaps he was not yet prepared to step away from decisions he had been making alone for years.

My experience could offer him another perspective. It could not be allowed to determine his decision.

“My experience is valuable as an example, but dangerous as a prescription.”Ben Steenstra

That is where I see the difference between giving advice and business coaching.

A Business Coach Must Know When to Change Roles

A coach helps someone by asking questions, examining assumptions and making visible what lies beneath a problem. A mentor contributes knowledge, experience and advice. A strategist examines whether a plan makes commercial sense and is likely to work in practice.

A good business coach should be able to use all three.

Not simultaneously, and certainly not without making the change in role clear.

Sometimes I asked the young entrepreneur a coaching question:

Which decisions are your employees genuinely unable to make, and for which decisions do they ask permission simply because that is what they have become accustomed to doing?

At another point, I brought in my own experience:

When I introduced an additional management layer, I did not make my company more independent. I mainly created new dependencies.

Then we looked at the situation strategically:

Which knowledge existed only in his head? Which knowledge could be transferred? Which responsibilities could be placed lower in the organisation? And what needed to change before employees could genuinely carry those responsibilities?

By making it clear which role I was speaking from, he remained the owner of his own decision.

That matters. In Executive Coach for Entrepreneurs, Founders and Leaders, I explained the difference between a mentor and a coach.

A mentor shares experience and provides direction. A coach helps you find your own answer.

Business coaching brings those two worlds together, but it does not remove the distinction between them.

The entrepreneur should be able to recognise when he is listening to my experience and when I am helping him examine his own beliefs.

Asking Questions Alone Is Sometimes Not Enough

Within coaching, there is a common belief that the coach does not need to know the answers. After all, the client already possesses the knowledge and ability required to solve the problem.

For personal questions, that may often be true.

In entrepreneurship, it is more complicated.

You can use good questions to help an entrepreneur discover why he struggles to let go of responsibility. But you cannot use questions to make him discover how a particular organisational structure works in practice if he simply does not possess that knowledge or experience.

You cannot help someone discover something they could not possibly know.

Sometimes a brief warning can prevent months of trouble. Sometimes a practical example reveals a risk the entrepreneur cannot yet see. Sometimes it is more useful simply to say: “I have seen this before, and I would be extremely careful here.”

A business coach with relevant experience does not need to hide that experience behind his back to appear like a pure coach.

But neither should he use his experience to make himself more important than the entrepreneur.

Experience Alone Does Not Make Someone a Coach

The opposite side of the argument is at least as important.

Someone who has successfully built a company is not automatically a good business coach. I wrote about this previously in The Misunderstanding About Coaching: Experience Is Not Enough.

Experienced entrepreneurs can become deeply convinced that their own approach is the right one. What worked for them is then quickly presented as a universal formula.

Hire better people.

Build a management team.

Work with self-managing teams.

Stay closely involved in everything.

Let go of everything completely.

For almost every piece of advice, you can find a successful entrepreneur who claims it was the secret behind their success. That does not mean the same advice will work in another company, market or personality.

Good business coaching therefore requires more than business experience. It requires the ability to put your own certainty aside for a moment. To remain curious about the reality of the entrepreneur sitting opposite you. And to accept that their best solution may be different from the one that made you successful.

The Real Problem Is Not Always in the Organisation

The young entrepreneur initially believed he had an organisational problem. He was the central hub of his company and wanted to stop being one.

But as the conversation continued, other questions appeared.

Could he genuinely accept employees making decisions differently from the way he would? Were they allowed to make mistakes he could have prevented? Did he want to transfer responsibility or merely tasks? And who would he be within his own company if everything no longer revolved around his knowledge and decisions?

Those are not questions you solve with a new organisational chart.

Business problems often have a personal layer. I have seen this not only in my own companies and coaching practice, but also in the conversations people had with AI Ben. I wrote about this in Why Leadership Problems Are Often Personal: What 120 Hours of AI Coaching Revealed.

A consultant can redistribute responsibilities. A mentor can explain how they structured their management. A coach examines why the entrepreneur eventually pulls every responsibility back towards himself.

A business coach must be able to see all three layers.

The Entrepreneur Remains in the Driver’s Seat

The purpose of my conversation with this young entrepreneur was not to persuade him to copy my organisational model.

My story about the business unit managers showed what can happen when a solution appears logical but does not fit the type of business or the people working in it. My entrepreneurial experience helped him recognise risks earlier. My strategic knowledge helped us examine possible structures.

But the coaching questions were necessary to determine which solution genuinely suited him.

Because ultimately, he did not only need to design a different structure. He also had to decide what kind of leader he wanted to become.

I could not make that decision for him.

A business coach should therefore not sit in the back seat shouting instructions. But neither should he remain silent beside the entrepreneur while watching him miss a turn the coach recognised long ago from experience.

He shares what is relevant. He asks questions when they are needed. He makes visible what the entrepreneur cannot yet see.

The entrepreneur keeps their hands on the wheel.

For me, business coaching only truly works when coaching and entrepreneurship come together, without the coach taking over the entrepreneurship of the other person.