Senior managers and leaders often tussle with the benefits that coaching can bring to an individual or an organisation. Perhaps this tussle is about justifying the costs of using an external coach, or perhaps it could be about justifying the incorporation of internal coaches in their organisation.
Whichever scenario, it is good to remind ourselves of some of the headline benefits of how the coaching profession can assist organisations. Of course, we are making an assumption that the coach that is providing these services is competent, and is receiving regular development and supervision to keep their clients experience of a high quality.
The benefits typically are
- Improved performance (both individual and team)
- Enhanced bottom line, including profit, quality, productivity, innovation, and other measures
- Improved customer service and enhanced public perception
- Professional development, including
- Enhanced goal setting and attainment
- Increased confidence and empowerment
- Skills development, especially when coaching and training are combined
- Leadership development
- Preparedness for advancement
- Enhanced balance and morale
- Enhanced relationships
- Improved retention of quality employees
These are easy throw away statements, but exploring some grounded research could be also of benefit.
In 2010, Simon Hague completed an MBA project considering the benefits of executive coaching to leaders of industry. In this thesis, he interviewed 9 directors of significant organisations. The outcome of the thesis was in support of the benefits highlighted above but also linked the benefits to the change curve (sometimes referred to as the grief curve). He linked that the impact of coaching during a change cycle was to help people to achieve acceptance quicker, recover quicker, and potentially due to an increase in awareness, achieve a higher output than at the start of the engagement. Indeed, this has become the logo for this business. The red line represents performance without coaching and the blue line represents performance with a coaching intervention.
Additional work by others also leads us to understand that the benefits to coaching are significant.
- Metrix Global (a fortune 500 company) calculated the ROI for coaching as 530% based on 43 qualitative interviews at Nortel. Interestingly, this jumped to 790% when staff retention was taken into account.
- Although dated, Wayne McFarlane from PWC stated “The return on investment (ROI) in a coaching or mentoring initiative is something in the order of six-to-one pay back“.
- A study by Manchester Consulting in Florida (2001) shows that the return on investment (ROI) in Executive Coaching was over 5.5 times the initial investment in Executive Coaching, with an average return of nearly $100,000. While the size of the benefit will be partly related to the size of the company, the study shows that the benefits of Executive Coaching are substantial. According to Manchester Consulting, the most important tangible benefits of Executive Coaching are higher productivity, greater quality and increased organizational strength; while the most important intangible benefits are improved communication, greater teamwork and higher job satisfaction.
There are differences between internal and external coaching. This will be explored in different piece of prose.
The take out – coaching does good for all the benefits listed above. The ROI shows a significant return on the spend to provide coaching and justifies itself.
The post Return on Investment for Coaching (The ROI debate) appeared first on Wheresmylunch.