These Should Be the Results of Executive Coaching
What does executive coaching yield? What is the return on investment (ROI) of executive coaching? I always find it very important to know where we are heading with coaching.
What is the goal and when is a client or the organization satisfied?
This starts at the beginning of a coaching trajectory. If it is not clear what the desired result is, how can you evaluate the result afterwards?
Much research has been done with proven studies on the ROI of Executive Coaching, focusing on financial results. But objectivity is difficult, especially considering all the variable factors involved in an executive coaching plan.
Executive Coaching ROI
“What does it cost?” is a question I often get asked, especially by new clients. “What does it yield!” is what I indicate. Because that’s what matters, the result. And especially the return on investment. And we can look at that in different ways.
Much research has been done on the financial results of executive coaching. Several, mainly international studies have shown that the ROI of executive coaching is impressive.
One of the studies conducted by PWC showed that the ROI was as much as 7 times the initial investment. A quarter of the coaching clients reported an ROI of 10 to 49 times the cost of the coaching.
According to another study among thirty executives participating in a major development program at a Fortune 500 company, an executive coaching return on investment was measured at 529% (Case Study on the ROI of Executive Coaching, Merrill C. Anderson, Ph.D., MetrixGlobal, LLC.). These are just a few measurements and at the same time, I also know that these studies contain subjective elements.
At the end of the day, executive coaching results do show that it pays off and thus creates a healthy return on investment.
The standard formula to arrive at a correct executive coaching ROI is by subtracting the costs of the coaching from the estimated value of the coaching outcomes and then expressing this as a percentage ((estimated coaching benefits – cost of coaching / cost of coaching) × 100%).
But is it really so easy to express, thus in ‘just’ financial results?
If my client secures a big deal after the coaching trajectory, what can be attributed to the coaching? Or if the director has to leave after a major reorganization, is the coaching then unsuccessful? No return on investment? Or maybe there is, but just not a financial one?
Two important variables in an organizational culture are that employees feel involved and that they feel good within the organization (‘well-being’). These findings after an executive coaching trajectory show another, more ‘human gain’ from the executive coaching plan.
I often also experience combinations. For example, the director who had not been happy in his organization for some time and then decided to leave the organization himself. The coachee gains insight and probably yields more elsewhere. And the organization doesn’t spend much money on a departure.
To be able to conclude that the executive coaching has indeed yielded results, it is necessary to make a solid start, where a good executive coaching plan is of great importance.
Executive Coaching Plan as a Basis
With the coachee (and if applicable with the supervisor), an executive coaching plan is established. This is done verbally and the key components are put on paper. The plan outlines the contours of the coaching and the goals set in the trajectory.
The following topics should be clear to both coachee and coach:
- Mission. What is the mission of the coaching? This refers to the ‘why’ for the coachee, the higher purpose.
- Motivation. How motivated is the coachee to get started and commit to the trajectory? Nowadays I not only ask if my coachee wants to go for gold, but also what he or she is willing to give to achieve the coaching goals. And if the coachee is referred by his or her supervisor, then it’s even more important to consider this. What do you think? What do you want?
- Methodologies. It must be clear to the coachee what kind of methodologies and insights the coach employs or can employ to achieve the desired results. Are analysis instruments used? Does the coach have effective behavioral change strategies, such as NLP?
- Behavior. What behavior needs to be changed or improved and what does the behavior change look like? For the coachee himself and for his/her environment?
- Organizational Factors: What business results are expected of the coachee? What communication and dynamics within the team are necessary to achieve the desired results? What is the culture within the organization?
- Methodology. How often do the executive coaching sessions occur, for example? How many sessions are planned?
- Financial. What financial results are expected? Like for the executive coaching ROI, if the coaching can be expressed in money, what does it then yield?
Executive Coaching Results
Based on the plan made in advance, the trajectory can be reviewed.
And if all goes well, then the trajectory has also been adjusted and fine-tuned along the way, if necessary.
I often ask the coachee to write a report of the trajectory. For the coachee, it provides an overview and gives me insight into where the focus lay for the coachee and how they reflect on the trajectory.
If an evaluation with a supervisor is planned, then my first question to the supervisor is always: “What have you seen change?”. But other stakeholders within the organization are also important and can provide feedback on the changes they have observed in the coachee.
And then the ROI of the executive coaching certainly comes into play.
Want to read more? Then read my book “My Best Team Ever! In 7 Steps to Golden Leadership”.
