This research paper studies the impact of observation technique in coaching processes in sports, business and educational settings. In a mixed-methods design, qualitative data (interviews) and quantitative data (surveys) were collected from a sample of 50 coaches and 100 coachees to conduct both textual/talking analysis as well as statistical quantification of the results. The paper illustrates that observation technique contributes considerably to the optimisation of feedback mechanisms in the forms of objective, specific and actionable insights that positively impact coachees’ performance and self-awareness at the same time. From another perspective, the technique also strongly promotes the coach-coachee relationship. More specifically, the challenges of building relationship trust, empathy and open communication can be greatly facilitated by coach ability in observation. Although time and resource constraint as well as coachees’ initial resistance to observation can be seen as the regular barriers to coaching effectiveness, relevant case studies are embedded into the paper to convey practical strategies to tackle those barriers. The research paper finally concludes that while the observation technique in coaching is powerful in nature, a careful plan and allocation of resources and environment phenomena are required to successfully sustain and leverage the benefits. Implications for practice and further research directions are then presented to help optimise the impact of observation technique in the coaching contexts.