Internal vs. External Coaching: Advantages and Disadvantages

Pros and Cons of Internal versus External Coaching for an Organisation

By Lucia Baldelli

Internal or external coach? This has been an incredible dilemma for me. And it took me a while to find the courage to do what I wanted! In many years of organisational coaching, I have experienced the nuanced nature of both roles – the good and the bad. The choice might seem trivial but it profoundly impacted the dynamics with my clients and the effectiveness of my work, especially if I did not set the right boundaries… Curious about what I have chosen for myself or unsure about what is best for you? Let’s explore it together in this article!

Internal Coaching and External Coaching: What are the Two Types of Coaching?

I have been an internal coach for more than a decade and I quite enjoyed it in the early stages of my career! When I decided that being external was the right thing for me, it took me quite some time to give up the safety of an employment job.

However, before we talk about what influenced my choice, let’s be clear about the difference.

An Internal Coach is employed within the organisation, understands the company culture and often works across several departments and teams.
An External Coach is not directly employed by the organisation, but hired as a freelancer instead. These coaches bring a fresh perspective and might have a specific expertise.

Many organisations start their coaching journey with external coaches and, as they witness the transformative power of coaching, often seek to build internal coaching capabilities. This shift often comes from a desire to manage costs effectively and retain talented coaches within the company’s ecosystem.

My choice between internal vs external coaching was influenced by various factors that I am about to explore more in detail.

You are invited to join our FREE ‘Coaching Dojo’ to practice in a safe space and get feedback on your skills from an ICF MCC certified mentor coach.

What is Internal Coaching and Who is an Internal Coach?

Being an internal coach meant it was easier to build trust in my coaching relationships over time and working directly with senior leaders and their teams. I had a deep understanding of the company culture, quite beneficial when addressing challenges or facilitating change. My role was about ensuring alignment at different levels of the organisation, nurture relationships and foster collaboration across departments to improve business agility and organisational resilience. Having young kids, I enjoyed the safety of a regular income.

And I was definitely cheaper than any external coach I came across! They worked 1-1 with executives or with top leadership teams to improve their effectiveness. They were called to bring a fresh perspective, allowing leaders to identify areas for improvement that might have been overlooked within the organisation.

During one of my last engagements, I had to coach a group of leaders to become a team. The work was commissioned by their line manager and they had no desire to put aside their divergent opinions and work together towards collective goals. It was not rare to hear some of them try to collude with me… a big lesson learned in regards to setting boundaries and remaining neutral!

This was the first time I started to reflect on the benefits of being external…

What is External Coaching and Who is an External Coach?

External coaching is a specialized service where an external coach, often hired on a short-term or part-time basis, works one-on-one with executives or top leadership teams to enhance their effectiveness. Unlike internal coaches who are embedded within an organization, being an external coach means bringing an independent perspective, free from the influence of existing company culture. This independence allows us to identify and address areas for improvement that might be overlooked internally, offering fresh insights and strategies.

An external coach’s responsibility is multifaceted. As an external coach you facilitate personal and professional development, foster leadership skills, and provide guidance tailored to the unique challenges faced by each leader or team. Given the external status, external coaches are often perceived as more neutral, enabling them to navigate sensitive issues more freely.

The use of external coaches has become increasingly popular, especially in environments where high-level executives seek unbiased feedback and guidance. While the cost of retaining an external coach can be significant, particularly in arrangements where the coach is always on call, many organizations find the investment worthwhile.

Getting ready to ace your ICF Credentialing Exam?
Take our FREE ICF mock test and contact us if you have any questions!

Internal vs. External Coaching: Advantages and Disadvantages

Internal Coaching Benefits

Your choice to go for external vs internal coaching might depend on your unique needs and the circumstances of the organisational clients you want to work with.

However, here are some advantages I have experienced first hand when I was internal.

Understanding of the culture and organisational dynamics: I had a deep understanding of the organisational culture, power games and relational dynamics between key actors at play.
Trust-building: I could build trust based relationships with people over time – still missing some coffee machine chats, now that I am also remote!
Cost-effectiveness: I was a much more budget-friendly option compared to external professionals AND I enjoyed the safety of a regular income was important to sustain my young family at that time.
Long-term engagements: I was typically engaged in long-term projects within the organisation. It was great to sustain their development and growth!
People development: I could significantly contribute to the personal and professional development of the leaders I worked with: they knew me and wanted to work with me.

External Coaching Benefits

Now that I have been an external coach for a few years, this is what I really enjoy about it.

Targeted interventions: I am brought in for specific, crucial coaching interventions. I am called when expertise can be tailored to address particular challenges or goals.
Avoidance of office politics: I am not entangled in internal politics! This distance allows me to stay neutral and focus on collective goals rather than individual perspectives and needs.
Neutrality and objectivity: I bring a level of neutrality and objectivity that was much harder to achieve when I was an internal coach.
Fresh perspective: I have a much more objective and less biassed view.
Boosts confidentiality: Sometimes, people find it easier to discuss issues with an external coach, which can make these coaching relationships particularly powerful.
Flexibility: I have a more flexible schedule, which fits quite nicely with my desire to partner with other coaches for their personal development.

Internal Coaching Drawbacks

Here are a few challenges I experienced as an Internal Coach.

Getting caught in conflicts: It was easy to be pulled into conflict or other complex relational dynamics within the organisation.
Dumping ground: Leaders sometimes saw me as a resource to offload work, responsibilities or stress, which brought me to set strong boundaries around my role.
Emotional involvement: Being closely tied to the organisation, I sometimes found it challenging to maintain neutrality without getting too involved.
Frustration with status quo: Changes within organisations often take time. This was sometimes frustrating to me, especially when I could see how lack of progress or improvement caused pain to people involved.
Limited perspective: It was hard to offer fresh insights or innovative solutions due to being deeply immersed in the company’s culture.
Balancing roles: If they had a hybrid role – e.g. coach and mentor – it was challenging to balance and keep the right stance effectively and appropriately.

External Coaching Drawbacks

Here are some potential drawbacks of being external to the organisation.

High cost: I am a considerable cost to the organisation.
Effectiveness of interventions: My effectiveness can be lessened if my interventions are sporadic or not well planned and I do not keep regular contact with the people I am coaching.
Emotional connection: A weaker emotional connection (compared to internal coaches) might affect my level of understanding and commitment.
Learning curve: I need time to understand the organisation’s culture and dynamics which could delay the start of the coaching process.
Availability: Depending on my workload and commitments to other clients, my availability might be limited.

Which Approach is the Best for an Organisation?

I hope that my perceived advantages and disadvantages of each type can provide valuable insights to guide your decision.

My preference now leans heavily towards external coaching. Navigating the tricky waters of office politics and relational dynamics can be challenging as an internal coach, and I believe I can be a much more effective partner if I am at the right distance, which impacts my neutrality and objectivity.

However, this doesn’t mean that internal coaching is less effective. It simply requires setting strong boundaries to make sure that you can work at your best: the ultimate goal is to choose an approach that best serves your organisation and is aligned to your unique preferences and needs.

Resources

About Author

Lucia Baldelli

Lucia Baldelli is an ICF MCC credentialed coach and has co-authored the book The Human Behind The Coach. In her 20+ years of Organisational Coaching she has worked in multicultural environments, becoming fluent in three languages. Lucia is the founder of the coaching school Coaching Outside the Box, bringing her passion for unleashing human potential through coaching.

See author's posts