Part of the ICF description of this skill reads "the ability to integrate and accurately evaluate multiple sources of information, and to make interpretations that help the client to gain awareness and thereby achieve agreed-upon results".
The information comes mostly from the student's vocal language and body language when they are talking about what they are doing, thinking and feeling compared with what they want to do, what they want to think and what they want to feel. It also comes to a lesser degree from the coach's thoughts and feelings that come up during the session. As coach you need to be aware of the difference between your own thoughts and feelings, and those that you pick up from the student that you are coaching. The thoughts and feelings that are used in the coaching process are the ones that come from the student. That's easier said than done. It takes practice to separate the one from the other. One way to become better at separating the two is to ask yourself "Whose thoughts and feelings are these?"
I will use a general example of creating awareness to show what it means to make interpretations
Imagine that you are coaching a student who has described a particular goal that they want to achieve. The student has also described what they have been doing during the past two weeks and seems to be stuck in an undesirable behaviour, a behaviour that's not working well for them. What they are currently doing is not moving them towards their desired goal. It's a common situation.
What can you say that could get this student moving towards their goal again?
The temptation for the coach is to think up a desirable behaviour and encourage or persuade the student to change to that behaviour. The temptation for the student is to rely on the coach to come up with a behaviour that will solve the problem and get them closer to the goal. This is unhealthy coaching.
One way for the coach to work in such common situations is to create awareness for the student so that they can come up with the behaviour change that they want to try out.
I think this is the most challenging and enjoyable part of coaching since this is the time when you will often see the necessary change taking form, and the student taking responsibility for changing their own actions and results. This is true empowerment.
Here are some questions that you could ask. Notice that NONE of these questions ask for action. They ask the student to become aware of what's going on in their minds and in their emotions. The questions ask the students to look for alternatives, and look at their situation and behaviour in a different way.
Further in the ICF description you can read that when you are in the coach role you:
Go beyond what is said in assessing student’s concerns, not getting hooked by the student’s description. Which means that you will listen, and not remain in the student's description of "what is" or "what has happened". You will be moving them towards learning from "what is" and "what has happened", so that they are better equipped to move forwards
Invoke inquiry for greater understanding, awareness and clarity. Which means that you ask the student to reflect on what they can do to learn from what they have experienced.
Identify for the student their underlying concerns, typical and fixed ways of perceiving
themselves and the world, differences between the facts and the interpretation, disparities between their thoughts, feelings and action. And that's a nice way to say "challenge them!", and do it respectfully. A great question to ask when a student tells you how the world works based on their experience so far is "What if that is true, and what if it isn't true?"
Help the students discover for themselves the new thoughts, beliefs, perceptions, emotions, moods etc. that strengthen their ability to take action and achieve what is important to them. You can move towards this with questions like "What would need to be true so that you can reach your goal?"
Communicate broader perspectives to students and inspire commitment to shift their viewpoints and find new possibilities for action. For example, by finding role models, and examples of people who have already achieved similar goals to the student's goals, you make it possible for them to see beyond their current situation.
Help students to see the different, interrelated factors that affect them and their behaviors (e.g., thoughts, emotions, body, background). Students mostly agree that they are in charge of their bodies and take responsibility for what they do, and don't do. It can be a revelation to them that they are also in charge of their emotions.
Express insights to the students in ways that are useful and meaningful for the student. You may well get inspiration for something insightful to say about the student's behaviour, thoughts, beliefs etc. You need to hold back the thoughts that mostly benefit you, that make you sound wise or clever; and release those that benefit the student.
Identify major strengths vs. major areas for learning and growth, and what is most important to address during coaching. You will find that there is often a wealth of areas to work with in a coaching session. This simply means that you choose the areas that are of the greatest benefit to the student. For guidance you can look to the coaching agreement that you have with the student's goals.
Ask the student to distinguish between trivial and significant issues, situational vs. recurring behaviors,when detecting a separation between what is being stated and what is being done. The question "What's really going on here?" may help you guide the student decide to tackle the bigger issues.
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