Rising Stars Coach

ROI

Is coaching worth it? The answer is YES, whether you  are an individual investing in yourself or an organization seeking to develop your leaders.

Want to know more? Here’s the “rest of the story” on a few of the stats cited above.

Executive Coaching Return on Investment Study

Among other things the study notes an average ROI of almost six times the cost of coaching.

Portland, OR (PRWEB) June 13, 2006

N2growth, a leading venture growth consultancy, has released the results of a study that quantifies the business impact of executive coaching. The study conducted by Manchester, Inc., includes data on executive behaviour change, organizational improvements achieved, and the return on investment (ROI) from customized, comprehensive executive coaching programs. Executive coaching has become an integral part of most Leadership Development programs at Fortune 500 companies and a mainstay with successful entrepreneurs as well “We are pleased to have such a detailed study validating what we have always known to be true” said, Mike Myatt, Chief Strategy Officer at N2growth.

“Executive coaching has become an integral part of most Leadership Development programs at Fortune 500 companies and a mainstay with successful entrepreneurs as well,” said Myatt.The study included 100 executives, mostly from Fortune 1000 companies, who received coaching. Participating companies realized improvements in productivity, quality, organizational strength, customer service, and shareholder value. They received fewer customer complaints, and were more likely to retain executives who had been coached.Most of the executives in the study held positions of vice president or higher (including division president, general manager, chief executive officer, chief financial officer, chief information officer, partner, principal, and practice leader).

Almost six out of 10 (57%) executives who received coaching were ages 40 to 49, and one-third earned $200,000 or more per year. Among the results of the study:The coaching programs delivered an average return on investment of 5.7 times the initial investment in a typical executive coaching assignment — or a return of more than $100,000 — according to executives who estimated the monetary value of the results achieved through coaching.

Other benefits to executives who received coaching were improved:

Executive coaching programs focus on helping executives adjust to new organizational realities and not just survive, but thrive.

Excerpt from Executive Briefing: Case Study on the Return on Investment of Executive Coaching

Prepared by:
Merrill C. Anderson, Ph.D.
MetrixGlobal, LLC

A Fortune 500 firm and Pyramid Resource Group, a coaching services company, recently engaged MetrixGlobal LLC to determine the business benefits and return on investment for an executive coaching program.

The Bottom Line: Coaching produced a 529% return on investment and significant intangible benefits to the business. The study provided powerful new insights into how to maximize the business impact from executive coaching.

Introduction

A Fortune 500 firm launched an innovative leadership development effort that was expected to accelerate the development of next generation leaders. The participants in this effort were drawn mostly from the ranks of middle managers and from many different business units and functional areas. Leadership development activities included group mentoring, individual assessments and development planning, a leadership workshop and work on strategic business projects.

Coaching was considered to be a key enabler for this approach to leadership development because the participants could work privately and individually with his or her coach to develop specific leadership competencies. While participants spoke very highly of their experience with coaching it was decided to conduct a formal assessment of the effectiveness and business impact of coaching.

1. How did coaching add value to the business and what was the return on investment?

2. How could coaching be best leveraged in the future, especially if coaching was to be expanded to other business regions?

Results

Coaching was a very effective developmental tool for the leadership development participants, producing financial and intangible benefits for the business. Coaching sessions were rich learning environments that enabled the learning to be applied to a variety of business situations. Decision-making, team performance and the motivation of others were enhanced. Many of these business applications contributed annualized financial benefits. Other applications created significant intangible benefits. Overall, the participants appreciated their coaching experiences and would highly recommend coaching to others.

Three-quarters (77%) of the 30 respondents indicated that coaching had significant or very significant impact on at least one of nine business measures. In-depth discussions were conducted over the telephone with each respondent to further explore the business impact of coaching. Sixty percent of the respondents were able to identify specific financial benefits that came as a result of their coaching.

Overall, productivity (60% favorable) and employee satisfaction (53%) were cited as the most significantly impacted by the coaching. Respondents defined productivity in this context as relating to their personal or to their work group productivity and half (50%) documented annualized financial benefits. Employee satisfaction was viewed both in terms of the respondents being personally more satisfied as a result of the coaching as well as the being able to increase the employee satisfaction of their team members. The respondents could not quantify this benefit in financial terms. Employee satisfaction, then, was a significant source of intangible benefits. Customer satisfaction (53%) was also a significant source of intangible benefits.

Program costs were tabulated for all 43 leadership development participants in determining the return on investment. A 529% return on investment was produced by the coaching process (excluding the benefits from employee retention.) While those clients who had customer or people responsibilities produced proportionally greater financial benefits, the realization of benefits to the business was fairly widespread throughout the group involved in this study.

Recommendations were made to maximize the business benefits from executive coaching:

·  Manage the entire coaching process to ensure consistency and quality. Though the content of individual coaching sessions should always be confidential, the coaching process itself needs to be managed to ensure that the coaching clients and the coaches are following the appropriate process and leveraging best practices.

·  Prepare clients in advance for coaching and don’t force coaching on anyone. Because coaching remains a relatively new development technique, people may not understand how the coaching process can help them become better business professionals. The sooner they understand the process, the sooner they will see results.

·  Provide coaching strong organizational support. Those being coached should receive encouragement and support from their immediate managers. Also, coaching should be conducted in the context of other developmental efforts such as competency development, assessments, mentoring and leadership workshops.

·  Allow each coaching relationship to follow its own path. A major difference between coaching and training is that coaching allows the individual to determine what works best for him or her at a very personal level. Coaches need wide latitude to work with “the whole person” and help each client be more effective as a person as well as to be more effective as a business leader.
MetrixGlobal LLC is a professional services firm specializing in performance measurement solutions that increase accountability for bottom-line business results. Whether it’s developing a scorecard for a corporate university, determining return on investment for a human resources program or conducting a business impact study on an organization change initiative. Visit www.metrixglobal.net to learn more.