Building Effective Leaders: How Therapy and Coaching Can Enhance Leadership Skills

Leadership is not simply a hierarchical role, but a skill that can be explored and developed—much like singing, drawing, cooking, or playing a sport. 

Simon Sinek, an ethnographer and organizational management theorist, suggests that effective leadership involves making employees feel secure through trust and safety. Just as refining any skill requires effort, intention, and self-reflection, effective leadership also demands a commitment to personal growth and development.

But what are the potential consequences when leadership falls short?

As Marcus Buckingham of Gallup points out, “People leave managers, not companies.” This raises the question: How can HR managers enact meaningful change if employees are more likely to leave due to inadequate leadership?

A study published by the Pew Research Center in March 2022 reports that 63% of employees left their job due to a lack of opportunities for advancement, while 57% left due to feeling disrespected at work. Between January 2023 to April 2023, around 3.85 million employees resigned each month, contributing to a steady turnover rate of about 2.5% due to resignations.

Replacing employees is expensive. It costs 33% of a salary to replace someone. In comparison, 36% of HR leaders don’t have the resources to recruit top talent. Additionally, 44% of companies fail to provide compelling career paths, even though 70% of workers gain a sense of purpose from their work.

Given the research, it’s clear that employees who leave their roles desire a few fundamental elements: respect, safety, and growth. They want to be valued and empowered, and are willing to leave if they don’t feel like they are. 

As HR managers strive to cultivate healthy team dynamics through relational development, therapy emerges as a powerful tool to achieve these goals.

3 key domains for redefining leadership metrics 

When utilizing therapy to develop effective leadership skills, it’s important to explore three interconnected domains that influence our role as leaders.  

The first domain is intrapersonal, encompassing our internal cognitive and emotional processes. It involves how we perceive, interpret, and process workplace experiences based on our values, needs, and desires. 

The second domain is interpersonal, which involves navigating the dynamics between individuals. This includes understanding relational sequences, patterns, and communication styles such as empathic and effective communication. 

Lastly, the organizational domain represents the systemic container within which the intrapersonal and interpersonal domains operate. It encompasses the organizational rules, processes, structure, and hierarchy that influence how leadership functions within the broader organizational context.

By addressing and understanding these three domains, leaders can develop the skills necessary for effective leadership, considering their internal processes and interactions with others in their unique organizational context. 

Intrapersonal domain

Research on work-life balance highlights how intrapersonal barriers such as psychological distress, anxiety, depression, and emotional exhaustion affect job satisfaction, performance, commitment, and life satisfaction.

Therapy can provide employees and leaders with the tools to address these variables and build skills to reduce their impact on individuals, teams, and organizations.

Consider this scenario: a sales team’s managing director fails to meet quarterly goals for Q1 and Q2, which has caused a negative shift in their behavior. The team reports the director’s increased authority and curt demeanor and as a result, they have begun dreading weekly meetings. Despite approaching Q3, sales figures remain stagnant, demotivating the historically stellar team.      

At an intrapersonal level, let's focus on the managing director. Perhaps issues in their personal life negatively impacted their ability to compartmentalize and fulfill their duties effectively—issues like marital conflict, fixed false beliefs, addiction, grief, trauma, OCD, or illness, to name a few common ones.

Distressing emotions like stress, anxiety, or fear override reasoning in the higher-functioning cortex. 

Therapy builds emotional intelligence (EIQ) and helps unearth cognitive, emotional, and behavioral patterns, enabling values-driven emotional regulation for improved interpersonal effectiveness.

Interpersonal domain

Now, let’s turn to the interpersonal dynamics between the managing director and their direct reports. 

As the leader grapples with the functional overload caused by emotional distress in their personal life, the relationship between the director and the team is affected. The director’s management style becomes more directive and authoritative, hindering their ability to nurture empowerment within the team.

The team's performance is strongly influenced by their communication and relationship with their director. Research indicates that when supervisors use language that reinforces the organization's culture, values, and purpose (meaning-making language), shows concern, care and appreciation (empathic language), and provides clear task clarification and expectations (direction-giving language), employees report higher levels of trust in the organization and its leaders.

When employees experience mistrust, lack of psychological safety, anger, frustration, or stress, their amygdala takes over, impacting interpersonal functioning. The managing director’s struggle to regulate their intrapersonal functioning directly affects the team’s interpersonal dynamics.  

Organizational domain 

When leaders can access therapy and develop the necessary skills to understand and regulate themselves and their teams, measurable shifts in mid- and end-year reviews become possible. There is an opportunity for meaningful change at the individual, team, and organizational levels.    

When employees in non-leadership roles have access to therapy and coaching, they gain opportunities for personal growth. This can facilitate their transition into leadership roles or enable them to effectively self-lead and support their teammates—especially if the managing director employs empowering or transformational management styles. 

A meta-analysis of previous studies highlights the positive effects of effective leadership, particularly when supervisors use motivating language. These positive effects extend to critical organizational outcomes, such as employee job satisfaction, self-efficacy, organizational citizenship behavior, and organizational performance.

Therapy vs. coaching: complementary approaches

On an episode of Dax Shepard’s Armchair Expert, Jay Shetty, a former monk turned coaching entrepreneur, stresses the importance of therapy in his coaching practice. He states, “Everyone I coach has to have a therapist. Together they make a good recipe for a healthy life. They work symbiotically. I am not qualified or skilled in what a therapist does.”

Comparing it to athletics—a coach helps improve skills and performance, while a therapist is like a physical or sports therapist, aiding in healing and strengthening. Both coaching and therapy serve their unique purposes.

Therapy and coaching complement each other. Although coaching is future-focused and therapy involves the past, the distinction goes beyond that. 

Therapy can focus on the past, present, and future—just like coaching. Therapists are trained to navigate emotional or psychological distress symptoms, such as depression, anxiety, rumination, and emotional dysregulation.

Therapy requires a diagnosis for insurance purposes, while coaches are not qualified to diagnose or provide treatment for mental health conditions and illnesses. Coaches focus on cognitive-behavioral patterns that may be hindering growth and goal achievement. These goals may include career advancement, financial planning, fitness improvement, navigating relationships, and enhancing executive functioning.

Therapists can also address these areas and have additional training in understanding how they contribute to emotional or psychological distress.

Both therapy and coaching utilize cognitive-behavioral techniques and solution-focused models. Cognitive-behavioral techniques identify thought patterns influencing emotions and behaviors.  

A solution-focused modality encourages envisioning life without the problem and recalling instances of problem-free behavior. The practitioner amplifies strengths, empowers the individual, and collaborates on actionable plans. 

How to find the right therapist for leadership development

The first step is to interview your therapist. Remember, therapy is a relationship with someone you’re choosing to hold space for you—someone with expertise, training, or a natural inclination to work with individuals facing the unique challenges you want to discuss. 

The therapist-client relationship is the most crucial factor for growth and symptom reduction. When you feel secure within this therapeutic container, it becomes easier to delve into deeper layers and allow for meaningful change and personal development. 

During consultation calls, inquire about your therapist’s therapeutic style, approach, modalities, and experience. It’s also common for the therapist to ask what led you to reach out to them or for you to express what kind of dynamic you believe would work well for you and why. 

For example, you may prefer a therapist who provides guidance and assigns homework, one who incorporates somatic modalities, or someone who takes a collaborative and conversational approach, ensuring you remain in control of your therapeutic journey.

The value of therapy for leadership development

Corporate America has experienced a significant paradigm shift in recent years. The COVID-19 pandemic triggered varying degrees of change across several areas within the organizational culture. Since 2021, over 18,000 empirical research articles have explored the role of the pandemic and leadership in the workplace.

Companies now face layoffs and hesitations in backfilling roles while striving to maintain morale, retention, and organizational commitment. In times of job insecurity, offering therapeutic services to current and future leaders becomes crucial. 

Both therapy and coaching can help build the skills required for effective leadership, mutually amplifying the benefits of the other. Therapy can help leaders identify strengths and opportunities for growth beyond challenges like anxiety, depression, grief, or addiction.

When current and future leaders have access to leadership development through therapeutic services, they engage in self-reflection and can embrace their leadership skills. As Simon Sinkey states, “leadership is a choice,” a skill we choose to develop and lean into. Leadership begins within the individual, and its benefits permeate the organization through team dynamics.

Watch the webinar replay to discover how working with a coach can help executives and other leaders enhance leadership skills and drive organizational success.