The Inner Game of Business Thomas Leonard built an industry out of the contradictions in himself.
By Joshua Hyatt

(FORTUNE Small Business) – Even as I write this, it sounds preposterous: Only a dozen or so years ago, a kid growing up in America--that's right, the very same country in which complete strangers are free to marry each other on national TV--couldn't even dream of becoming a business coach. But along came Thomas J. Leonard, a former financial planner with an unwavering fondness for a Maltese named Fringe, to change that forever by creating a profession. Before he spread the concept, people generally expected a "coach" to wield some form of sports expertise. After he finished--the temperamental and eccentric 47-year-old Leonard died suddenly this past February--there were maybe 10,000 folks calling themselves coaches who boasted of no particular expertise at all, beyond being certified as such. Many owed their livelihood to Leonard, who told me he wanted to see the coaching certification program he created gain the status of "a brand name, like an MBA."

That was back in 1997, when I interviewed Leonard about the inexplicable, exploding phenomenon that he had launched. I met Leonard on his terms--which is to say I didn't meet him at all. "He was more comfortable sitting in front of a computer," says Sandy Vilas, his close friend and fierce rival. At the time he talked with me, Leonard was living in an RV, coaching clients via telephone and training coaches over the Internet. Just a few months earlier, in mid-1996, he had sold Coach U., the Internet-based training entity he had started in 1992, for a sum that, as he boasted, he could "live really well on for several lifetimes." He wasn't shy about revealing the exact pricetag either: $2 million. My impression was that he liked to share any number (retail price of his motor home? $148,000) that would help convince listeners that he was living his dream--just as they could start living theirs, simply by joining the coaching movement. The average Coach U. graduate, he claimed, would be earning $60,000 annually within three years. More important, they'd be doing so on their own terms, working when they wanted to and doing what they loved. "Thomas turned coaching into a viable business," says Jeff Raim, a 48-year-old coach based in Angel Fire, N.M. "And he made millions, but to him it was all about getting more chips on his side of the table. He just could never have enough. I think that was what helped him to feel good."

By now, because of Leonard's exhaustive efforts, no one needs a definition of what a business coach is. That's mainly because most of us have given up trying to figure it out. Think of it this way: Coaches are like motivational speakers, except that they listen instead of talking. Is it possible to turn to someone else for self-help? If it is, that's another way to define what these sounding boards do. They offer support and guidance, serving as friends for CEOs who deservedly have none. Leonard liked to tell the story of how he stumbled upon the need for what he labeled "life coaching" back in the 1980s, when he was giving financial advice to a couple who also solicited his counsel on what color Mercedes to buy. (Answer: red.) "That story makes me cringe," protests Shirley Anderson, who served as Leonard's coach for a year. "It trivializes what we do." Given his penchant for contradiction, that's probably why he repeated the tale so much.

It's easy to dig through anyone's life and ferret out all kinds of conflicts and unanswered questions. Leonard had trouble dealing with people--"Thomas didn't do personal relationships very well," concedes Anderson--yet his coaching technique, he explained to me, hinged on "the synergy of two minds working together." He preached the merits of a balanced life but worked as many as 16 hours a day. He detested speaking in front of groups, Vilas says. Still, he adds, Leonard "wanted to be on Oprah. That was one of his big goals. He only made it as far as Donahue." In the throes of creating course material, Leonard was often "indifferent to other people's feelings," says Anderson. Other times, he'd hit the road for six months to be by himself.

Just how mysterious could his behavior be? Consider Leonard's final interaction with Vilas. Leonard, it's worth remembering, had coached him in 1989, then sold Coach U. to him for $2 million in 1996. On his website Leonard listed Vilas as among those who had "influenced me profoundly." But in 2001 he showed his gratitude by going into competition with Vilas and opening CoachVille. "He had a big ego," says Vilas, explaining it away. But what he can't explain is what happened in February. Shortly after Leonard died, Vilas got a one-page fax informing him that Leonard had named him executor of his estate. "I had no idea," says Vilas, 59. "I'm kind of in a weird position here."

Leonard's friends often found themselves in strange situations. "If you disagreed with him in the early days, he would just kind of cut you out of his life," says Anderson. "He did that to a lot of people." Leonard and Raim argued over the direction of the International Coaching Federation, an industry group that Leonard had founded. "We never spoke again," reports Raim.

Cheryl Richardson, who is the best known of Leonard's direct disciples--with two New York Times bestsellers and about 20 appearances on Oprah to her credit (and, perhaps, to Leonard's dismay)--says that "we had the normal tension between a mentor and a mentee. But I wouldn't be here had I not met him and enrolled in his program."

Given his erratic behavior, Leonard sounds like exactly the sort of person who could benefit from using a coach. That, of course, is the ultimate irony about how he created an industry: Unlike most entrepreneurs, he didn't spot a gap in the world around him and then set out to fill it. Instead, he found a business by looking inside himself. Leonard, who seemed to have a heightened awareness of his own demons, created the tool that he needed. "You often learn to teach what you most need to know," observes Raim.

Typically, coaches encourage their clients to scour their inner selves and "be the source of their own answers," as Dan Kennedy puts it. Kennedy, a 49-year-old coach from Seattle, believes that the seeds of business coaching were planted by a 1975 book called The Inner Game of Tennis. "Coaching draws from people some clarity about what needs to be done and how best to make that happen," says Kennedy. "There are people who would really rather be told what to do. Coaching is not for them."

Now that Leonard's not around to give guidance, will the coaching phenomenon lose its momentum? His fatal heart attack brought him down at a time when the unemployment rate was soaring, making employers less inclined to spend money coddling their managers by hiring coaches. Vilas says his $5 million coach-training business--and Leonard's $3 million company, for that matter--faces more than 65 competitors. Who will survive the shakeout? "There's a part of me that doesn't want CoachVille to do really great," Vilas admits. "But then another part of me wants to honor Thomas's wish that it thrive." He doesn't yet know which impulse will win out. But as Leonard himself might appreciate, his struggle for an answer could produce some truly fascinating results.