Many organisations want to quantify the results and return on their investment before they will commit to the significant monetary investment in coaching programmes for their executives. However, it’s often difficult to identify the key performance indicators that will be able to measure the impact at the end of the process.
As coaching is one of our specialisations, we have helped many clients to determine how they will measure results, though these are often different, according to the competency frameworks of the organisation and their willingness to allocate resources to tracking progress and results. We have also provided data for a comprehensive independent survey to evaluate the impact of executive coaching conducted over a period of 18 months for 30 executives in 13 FTSE 100 companies. Data was collected during the research via 30 qualitative interviews using a 4-stage interview model developed for this research project. The objective of the survey was to determine if executive coaching resulted in quantifiable ‘bottom-line’, financial improvements for companies.
For any organisation considering where to focus on measures and results, this survey provides some excellent areas for assessment.
To demonstrate where benefits of coaching were confirmed and measured, the evaluation highlighted three broad interlocked and ‘cascaded’ areas where executives cited benefits from the coaching programmes conducted over six months or a longer duration:
1. PERSONAL BENEFITS
These are performance benefits for the executives personally, in their roles; things that they were doing or approaching differently to better effect, as a perceived benefit from coaching. Top ranking benefits cited by more than 50% of executives included –
- Increased interpersonal skills including negotiation and collaboration skills, awareness of others’ perspectives, relationship skills, stakeholder management / influence and driving change in the organisation
- Improved self-management including awareness of self and impact upon others, personal organisation and time management, prioritisation and focus, confidence / congruence and strategic thinking leading to faster and more accurate decision making
- Better leadership behavioural style including improved performance in other areas stated above, resulting in improved performance in resolving potential and actual conflict situations, improved vision and shared object setting
2. ORGANISATIONAL BENEFITS
These are positive impacts upon the executives’ surrounding organisation (whether the surrounding organisation be a team, department or in the overall company). The executives’ personal improvements had generated benefits or increased effectiveness in their organisations. Top ranking benefits cited by more than 25% of executives included –
- Increased team effectiveness including team performance, improved team morale and cross collaboration
- Improved stakeholder management including better relationships with the board, line managers, peers and direct reports resulting in increased employee engagement and performance
- Better work and organisational strategies including better business decisions and strategic choices
- Improved operations including better resource management and allocation and better working climate
3. BUSINESS / FINANCIAL BENEFITS
These benefits were less easy to assess than the previous two areas, because of the funnel effect of personal improvements derived from the coaching, becoming intertwined with other variables and in a number of cases business data was not available. However, in cases where business data was available, the study highlighted that the average financial ROI, was between 250 times and 315 times the investment in the coaching programme. The most marked business performance benefits cited were –
- Increased organisational productivity / performance (cited in 27% of executives’ cases)
- Staff Retention cost savings (cited in 20% of executives’ cases)
- Increased cost efficiency including process cost efficiency, efficiency in the speed of change of projects and revue up / cost down – more for less (cited in an average of 16% of executives’ cases)
- Direct cost savings including revenue targets gained or saved and mitigation / changes of investment (cited in an average of 14% of executives’ cases)
- Direct impact on increased revenue / sales (cited in an average of 5% of executives’ cases)
An accurate ROI (return on investment) for the coaching programmes was more difficult to assess due to either the inability to isolate the impact of the coaching, or the lack of sensitive organisational measurements and other business financials. However, there was enough quantifiable financial benefits and ‘added business value’ that were measured that demonstrated a valuable ROI for the business.
If an organisation is willing to allocate resources who can focus on measuring results, at a personal, team and organisational level, they can with some clarity, assess impact and positive contribution to the organisation’s performance. The results of all good coaching programmes should show distinct linkages between the coached ‘improved executive’, the improved leverage of the team and organisation and overall financial performance improvement.