As Kevin Cashman pointed out in Forbes recently: "...most people rate 'coaching and developing others' among the top three most important leadership competencies (...). However, despite the rated importance of this critical competency, it actually scores as the lowest practiced competency around the world."
So indeed, practicing coaching skills as a leader to develop employees is paramount for organizational success.
However, it has it's limitations. According to the International Coach Federation, coaching is a partnership. That means coach and coachee meet at eye level. No matter how great a boss is, he/she is still the boss. Consequently, their coachees do posses les power; they do not meet at eye level really.
As the article below describes, best coahcing results are achieved when there is unconditional trust between coachee and coach.
Ask yourself: would you trust your boss unconditionally?
Unconditional trust, between employees and bosses is quite rare, isn't it? Similarly, so called internally coaches (whose coachees are not in a direct reporting line) might not be fully trusted (like people might do with their external coach).
So, leaders, by all means do coach people -- whilst being aware of your limitations.
Trust and Intimacy: The Elixir of Professional Coaching Coaching is a professional partnership between a coach and a client in an empowering environment. The purpose of any form of coaching is to bring about lasting changes in beliefs, and thus accompanying behaviors. This is best achieved when the client has unconditional trust and fail-safe intimacy. This is easier said than done! Trust can be held as the most basic of all coaching elements. With given trust, intimacy in the coaching relationship grows so that the client can share their vulnerabilities with the coach and, more importantly, turn those insights into potent tools to embrace newer beliefs and behaviors.