Written by: Karen Brown, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.
Rarely does a day go by without someone asking whether executive coaching is worth the cost. More to the point, they wonder about the Return on Investment: is it worth what you pay for it?
The fact is, if the stock market produced the same kind of ROI that executive coaching does, we’d be in the greatest bull market in financial history.
The website of American University in Washington, D.C., cited a study conducted by Metrix Global which found that executive coaching has a 788% return on investment (ROI) “based on factors including increases in productivity and employee retention.” The coaching itself produced a 529% ROI (or $5 for every $1 that was spent on coaching). However, when the financial benefits of employee retention were included in the equation, that figure rose to 788% – a return of almost 8 to 1.
To further buttress the ROI case for executive coaching, here are some additional statistics to ponder, courtesy of The International Coaching Federation (ICF). Companies that engage in an executive coaching program, on average, will see:
A 70% increase in Individual Performance (goal attainment, clearer communication).
A 50% increase in Team Performance (improved collaboration, enhanced work performance).
A 48% increase in Organizational Performance (increase in revenue and employee retention).
Need more convincing? Well, consider that organizations offering training alone experience a 22% increase in productivity, but when combined with coaching that figure rises to 88%, according to Gerald Olivero, Denise Bane & Richard Kopelman, Public Personnel Management.
Of course, the ROI of executive coaching goes far beyond mere numbers. There are myriad intangible benefits that, while they cannot be quantified, clearly highlight the value of this endeavor. The list is extensive, but the ones that stand out include:
Improved teamwork
Improved job satisfaction
Reduced workplace conflict
Increased organizational commitment
Reduction in executive isolation
Greater life-work balance
Despite the eye-popping results that can be achieved, they are by no means guaranteed. An article in Fast Company put it quite succinctly: “Coaching done the right way simply works. There is an important caveat, however: A good coach needs to be trained, possess real-life experience, and both the coach and the client need to have a clear understanding of how to maximize the process.”
There are numerous factors that contribute to the ultimate success of a coaching engagement and the realization of a sound ROI:
1. People have to want coaching
We’ve all heard the expression, “You can lead a horse to water, but you can’t make it drink.” It’s the same principle in executive coaching. You can offer your leaders a solid coaching program with a proven coach, but if they aren’t interested in improving themselves, it’s unlikely they are going to derive much value from the program, even if they are coerced to physically attend. The optimal approach is to offer leadership development coaching on an opt-in basis for leaders who raise their hand and express a high level of interest. They are already motivated, which is the foundation they need to work from to improve their performance.
2. Separate the contenders from the pretenders
The fact is, anyone can become a leadership coach. Some coaches have capitalized on the lack of a certification requirement by simply calling themselves a coach, hanging out their shingle, and using their professional experience or even in leadership to start working with clients.
While some of these non-certified coaches may achieve a degree of effectiveness, you have a better chance with someone who has ICF certification or has at least taken some courses or received training in the field. Perhaps what they lack in certification is made up for by their extensive corporate experience, but it’s important to realize that effective coaching is both a science and an art. From experience, the coach might know what to do tactically, but coaching certification teaches the art and effective techniques in coaching others, which is not simply telling them what to do, or giving them the answer. In the end, it’s up to you to decide what your coach’s training and experience level should be; once you’ve settled on it, do not compromise.
Aside from their actual credentials, a superior coach is one who is unbiased and neutral, and can reflect back to the leader like a mirror. They will ask questions like, “Where else has this shown up in your career or life?” These are not new behaviors or patterns, and this question reveals their impact over time.
3. Self-awareness – and willingness to change – are non-negotiable
A leader who isn’t self-aware is already at a huge disadvantage. This quality helps a person understand their own motives, goals, approach to work, and attitude towards co-workers. It is a quality that can be taught but only with receptivity to explore and improve. The real test is, are they willing to embrace self-awareness and honestly examine their blind spots? Something we’ve found that is eye-opening for this process is graphically demonstrating a behavioral “inventory” which shows, side by side, the behavior the leader thinks they are exhibiting versus how others actually experience their behavior. The results are irrefutable and, confronted with such compelling and irrefutable evidence, these leaders will often reconsider their level of self-awareness.
We ask a question during the intake interview that can be used as a yardstick to measure coaching desire and readiness: “On a scale of 1-10, 10 being the highest, where do you rate your level of desire to make changes and improvements through coaching?” If their answer is lower than 9, we simply say, “OK; this may not be the best time for coaching.”
4. The coaching ship has already sailed
Let’s face it: for some people, the time for executive coaching came and went, if it was ever there at all. No amount of coaching, from the best coach in the world, will move the needle in terms of improving their attitude, motivation, or ability to lead. It would be a waste of time, money, and effort to just go through the motions.
Keeping a person like that on the job might show a level of compassion, but it’s really doing both them and you a disservice. Instead of putting this person on a performance improvement plan, have an open conversation with them. Offer to share what you see and ask them the same. Encourage them to be completely honest about their feelings staying in the role, and whether or not it brings them happiness and fulfillment. Unless there is a match, part ways. You, them, and the rest of the team will all be better off.
5. Engage the boss – to a point
Unless it’s a tri-party coaching relationship, the boss should only be involved at a supportive level. Meaning, the leader shares what they are working on in coaching but doesn’t actually coach the boss on how to make changes. Those suggestions will only be effective for themselves, not the leader; coaching should be left to a true, certified, professional.
Also, the boss should give recognition and positive reinforcement for changes made, in whatever the leader’s preferred format. Some leaders don’t like public recognition and crave it in private, or vice-versa.
6. Lack of a systematized approach
Some coaches just show up for sessions and say, “What do you want to work on today?,” letting the leader decide and completely guide the work. Instead, the coach/coaching company should establish specific goals and objectives, target due dates for accomplishment, and create metrics of measurement to ascertain progress and achievement. We use a proprietary portal and app for all coaching work with each leader, which makes the goals and work clear and straightforward. Very often, we’ve heard that previous coaching efforts didn’t work, and this is often the reason.
7. Teach leaders how to coach themselves
We’ve heard about leaders who did well as long as they were in a coaching program, but once it was over, they slid back into their old ways. When a behavioral-change methodology is used, the coach is helping the leader to change behavioral patterns that underpin historical results. Once changed to a new pattern that creates elevated results, there isn’t any backsliding, because the change is permanent.
Also, the coach is teaching the leader how to identify and change their future patterns. Clients often say, “I heard your voice in my head and did what I knew you would say to me.”
So, is executive coaching worth it? Based on the measurable results that can be achieved, along with the myriad intangible benefits that are gained in the process, the answer is a resounding “yes.”
Karen Brown, Executive Contributor Brainz Magazine
Karen Brown is the Founder and CEO of Exponential Results. She draws on 30 years of success as a corporate executive with over 20,000 hours of senior executive coaching experience. Years ago, Ms. Brown discovered the key to greater performance and effectiveness: identifying and addressing blind spots – the repeated thinking patterns that impede success. Using a professional coach and science-based methodologies of how our minds work, she busted through her own blind spots to achieve astounding results. Her discovery led to the creation of Exponential Results’ proprietary Power Pathways™ method, based in neuroscience. She’s also a focused athlete, having competed, as an amateur, in the Ironman World Championship.
