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Looking for just financial returns from Executive Coaching is far too narrow?

Clients often ask, “What return will I get from Executive Coaching?” In my experience there are several ways of answering this question ranging from ‘What do you want?’ to a more in-depth view of the research supporting the efficacy of coaching.

In their meta-analysis of the effects of coaching on individual outcomes, Theeboom et al (2013), cite Grant et al (2010) who suggest that coaching is a demonstrably useful tool in development but also look to Bono et al (2009) as a reason to start to examine empirical outcomes.

Theeboom et al are also guarded about the use of a formulaic approach focusing on ROI. They argue that financial gains, outcomes and/or quantitative results may well be measurable but this is not the whole answer. This solely metric approach discounts several coaching specific factors such as team input, environment or other uncontrolled factors, not least the unique relational element of each intervention. They also assert that the recognised formula for calculating ROI i.e. benefits minus costs divided by cost x 100 is too blunt an instrument to measure coaching efficacy on many levels. Their broader meta-analysis explores in detail such areas as wellbeing, health, coping, work/career balance and goal directed self-regulation.

These assertions are certainly borne out in my own practice – often results can be directly related to financial outcomes but frequently are not. My own, recently completed, research (Denton, 2016) indicates that both buyers and coachees alike value coaching and can see distinct advantages in utilising it, particularly in executive transition. They also indicate an understanding of the unique relational nuances that come into play in all coaching interventions – it is these relational elements that make up the bigger picture of Coaching ROI.

Various factors from Theeboom’s research lean towards areas directly related to the effectiveness of transiting executives. They look at aspects such as job satisfaction and attitudes to work, specifically citing the reframing of work experiences. The way organisational constraints put boundaries and barriers in place to making changes and how coaching could help individuals re-frame this to their advantage (Wrzesniewski and Dutton, 2001).

My own coaching practice experience very much resonates with these areas of:

· Reframing attitudes to work – ‘what are you really experiencing versus what you think you are?’

· Working within organisational barriers (real or imagined) – ‘what is the story you have made up about what is actually possible?’

· Setting stretch goals – ‘what would AMAZING look, sound and feel like?’

Whilst some of these could be framed with empirical goals and, if needed, financial results, this is not the whole picture. The tendency to look for just a financial ROI is, in my view, way too narrow a measure when looking at the effectiveness of coaching. Both buyers and coachees referred directly to the value in relationship and support provided by external coaches and, in many cases relating to my own coaching, to the stretch and challenge it provided often way beyond any initial expectations.

Theeboom et al’s (2013, p.12) meta-analysis concluded that coaching:

“has significant positive effects on performance and skills, well-being, coping, work attitudes and goal directed self-regulation.”

Perhaps, as coaches, we should be more insistent on framing and contracting across the tri-partite relationship of all external interventions so that ROI can be stated as an expectation at the outset and then, confidently, measured as an outcome. Holding ourselves, our coachees and, as importantly, the stakeholder to account!

About the Author:

Alan Denton is MD of The Results Centre (www.theresultscentre.com) an executive coaching and leadership development company. Alan regularly coaches CEOs and senior executives across a range of areas including financial services, pharmaceuticals, the legal sector, property, recruitment and many others following his years working at Director and Chief Officer levels within the retail and the automotive industries.

References:

Bono, J.E., Purvanova, R.K., Towler, A.J. and Peterson, D. B. (2009). A survey of executive coaching practices. Personnel Psychology, 62, 361–404.

Bozer, G., and Sarros, J. C. (2012). Examining the effectiveness of executive coaching on coaches’ performance in the Israeli context. International Journal of Evidence Based Coaching and Mentoring, 10, 14–32.

Denton, A. (2016). Warwick University Research Paper. What benefits can executive coaching bring to newly appointed/promoted executives in their first months in a new role? CE964-20 Research Project.

Grant, A. M., Cavanagh, M.J., Parker, H.M. and Passmore, J. (2010). The State of Play in Coaching today: A comprehensive review of the field in Hodgkinson, G.P, and Ford, J.K. (2010) Chapter 4 in International Review of Industrial and Organisational Psychology 2010 Volume 25. San Francisco: Wiley.

Theeboom, T., Beersma, B. and van Vianen, A.E.M. (2014) Does coaching work? A meta-analysis on the effects of coaching on individual level outcomes in an organisational context. The Journal of Positive Psychology, 9:1, 1-18, DOI: 10.1080/17439760.2013.837499

Wrzesniewski, A., & Dutton, J. (2001). Crafting a job: Employees as active crafters of their work. Academy of Management Review, 26, 179–201.