The International Coach Federation’s Global Coaching Client study, the first study of its kind, found that coaching clients indicate a high return on investment and immense satisfaction. How high is high? The study found that coaching racks up a whopping 700% ROI for organizations.
What does this mean? The study stated that an organization that spends $18,000 on coaching could expect to add $110,000 to the bottom line. Okay. But what does this really mean? How does executive coaching specifically add to the bottom line? What can an organization do to ensure it gets this kind of amazing ROI from its coaching engagements? I would like to tackle each one of these questions separately.
How Does Executive Coaching Specifically Add to the Bottom Line?
According to the study, executives who were coached for a minimum of six months experienced a 77% improvement in their working relationships with direct reports, a 71% improvement with supervisors, and a 63% improvement with peers. In addition, job satisfaction skyrocketed to 61%, and organizational commitment rose to 44%.
There’s no doubt that having an executive coach work directly with an executive has bonus side effects. It increases the productivity and effectiveness of their teams, because the executives become better leaders. It increases overall job satisfaction, because the coached executives have learned how to create empowering environments where people want to work hard. Customer satisfaction numbers increase because the coached executive really understands how important that is to the bottom line, and they prepare their service providers better. Finally, turnover decreases because people are, quite simply, happier in their jobs.
What Can an Organization Do to Make Sure its Executive Coaching is Effective?
Here a few rules of thumb that will help make each coaching engagement more likely to be effective. These are characteristics and behaviors of the executives being coached:
• Those who accept feedback and try to make appropriate changes make more progress.
• Those who have supportive bosses and keep them informed make more progress.
• Those who look for experienced and credentialed coaches who can see things differently yet supportively make progress.
• Those who create metrics for their success make more progress.
• Those who have a finite coaching engagement (6 to 18 months, for example) make more progress.
There are also several coach activities that improve the outcome of the coaching engagement:
• Focusing on the strengths of the executive, in order to find a way to increase their use and effectiveness.
• Typing metrics to organizational competencies.
• Using 360˚ feedback instruments and interviewing processes.
• Engaging the executive in action learning for immediate relevance.
• Shadowing the executive to get real-time information and to give immediate feedback.
If there’s one message to be gleaned from the International Coaching Federation study, it’s this: Executive coaching works, and has immense potential to have a hugely positive impact on your organization’s bottom line. The return on investment for your organization can be, in a word, extraordinary. However, the best results will always occur when coaching is integrated into overall human resources strategies, and tied to other measures of performance and leadership development.
Call TurnKey Coaching & Development Solutions at 281-469-4244.