Watson began his coaching career in 2004 with the
Canadian national team system where he held assistant positions with the U-20 and senior squads. Watson served as assistant coach for Canada at the 2004 CONCACAF Men's Olympic Qualification Tournament and was an assistant when the team finished third in the same tournament in 2008. He also spent four seasons on the staff of his former playing club
Charleston Battery as an assistant to
Mike Anhaeuser from 2006 to 2009, helping lead Charleston to the final of the
2008 Lamar Hunt U.S. Open Cup. After spending several seasons with
San Jose Earthquakes as an assistant to his Canadian colleague
Frank Yallop, Watson became the club's interim head coach on 7 June 2013 following Yallop's dismissal. Watson's first win as an MLS head coach came on 15 June 2013 against the
Colorado Rapids at Dick's Sporting Goods Park. Watson was 11–5–3 during his 19 league games as interim coach, nearly rallying the Earthquakes to an MLS Cup Playoff berth. His mark 1.89 points per game was tops among all coaches after he took over. In addition to his success in MLS, Watson's squad advanced to the
2013-14 CONCACAF Champions League Quarterfinals by winning Group 5. Following these successes, on 30 October 2013 the Earthquakes announced that they had signed Watson to a permanent contract, thereby removing his interim status. After a disappointing season in which the Earthquakes failed to qualify for the playoffs, Watson was dismissed in late 2014. He was hired as an assistant coach at
Orlando City Soccer Club for their inaugural
Major League Soccer season on 10 November 2014. He was fired by Orlando City in July 2016. On 18 January 2017, he was named assistant coach for Major League Soccer side
Minnesota United FC. On 28 October 2024, Watson joined
Canadian Premier League side
HFX Wanderers as the club's Senior Football Strategy Advisor. In this role, Watson would advise club president Derek Martin regarding player recruitment and football operations. ==Career statistics==