Executive
coaching is an outstanding investment to leverage
people power:
Today, there are about
as many different ways to measure
the return on investment
(ROI) of
executive coaching as there are coaching techniques.
Yet, ROI calculations continue to astonish even the
most results-oriented employer and prove, hands-down,
the
worth of executive
coaching.
Human Resource
Executive magazine reports that Dell Computer
Corporation of Austin, Texas, has been measuring ROI
for executive
coaching in a
formalized method for more than five years. More than
half the company's 761 executives received coaching
within a two-year time frame, says Bridgette Robinson,
director of executive and organization development at
Dell.
So far, coaching has
received more than a 90-percent satisfaction rate from
company executives. Robinson says senior staff members
who've received coaching also tend to be promoted more
often than those who don't participate in one-on-one
coaching
conversations.
Alastair Robertson,
manager of Accenture's worldwide leadership
development practice in Boston, says employers are
shocked at how high their ROI numbers are for
coaching. He recalls a large employer in the
hospitality industry saved between $30 million and $60
million by coaching its top 200 executives.
Here are
some tips when measuring ROI for executive
coaching:
1. Measure any result
that is meaningful.
2. Recognize that not
everything you measure will be objective.
3. Clearly define the
most important results an executive can actually
influence or achieve.
4. Align your business
plans and outcomes for coaching with the executive's
personal development plan.
Does your
company offer executive coaching or counseling?
Today, companies are
focusing more closely on developing the leadership
abilities of managers and executives internally
through coaching
and mentoring
programs. That
is the finding of a survey of more than 300 companies
nationwide by Manchester, a human capital consulting
services subsidiary of Modis Professional
Services.
About 6 out of 10
(59%) organizations currently offer coaching or other
developmental counseling to their managers and
executives, according to the survey. Another 20% of
organizations said they plan to offer such coaching
within the next year.
In addition,
one-quarter (25%) of organizations have already set up
formal mentoring programs, with another 25% planning
to do so within the next 12 months, according to the
survey.
Companies are
providing coaching to managers and executives for both
leadership
development
and corrective reasons.
The
top reasons given for offering coaching or other
developmental counseling include:
To sharpen leadership
skills of high-potential individuals (chosen by 86% of
organizations).
To correct management
behavior problems (72%)
To ensure the success
of newly promoted managers (64%)
To correct employee
relations problems (59%)
To provide technical
people with management and leadership skills
(58%)
Since it's becoming harder and
more expensive to replace
people, it is
clear that companies are showing an interest in
providing coaching
and other developmental counseling to managers and
executives
.
What
ROI do you and your organization get by getting
better?
A recent study of 100
executives, mostly from Fortune 1000 companies, by
Manchester, Inc. concludes that a company's investment
in providing coaching to its executives realized an
average return on investment (ROI) of almost six times
the cost of the
coaching.
Half of the executives
in the study held positions of vice president or
higher. Almost six out of ten (57%) executives who
received coaching were ages 40 to 49, and one-third
earned $200,000 or more per year. The coaching
programs were a mix of both change-oriented coaching
(changing certain behaviors or skills) and
growth-oriented coaching (focused on sharpening
performance).
The
coaching programs typically lasted from 6 months to
one year.
For more information on the costs of an executive
coaching program, click
here.
Corporate
benefits received:
1. Delivered an
average ROI of 5.7 times the initial investment (a
return of more than $100,000)
2. Executive
productivity improvements (reported by 53% of
executives)
3. Organizational
strength (48%)
4. Quality
improvements (48%)
5. Customer service
improvements (39%)
6. Retaining
executives who received coaching (32%)
Personal
benefits to the coached
executive:
1. Direct report
and supervisor relationship improvements (greater than
70%)
2. Teamwork
(67%)
3. Working
relationships with peers (63%)
4. Job satisfaction
(52%)
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