When will I see my ROI when hiring an Executive Coach?
What do I get in return for executive coaching?
“Executive coaching engagements for senior executives run an average of 6-12 months at a minimum,” says Liza Sichon of Executive HR Coach. “To have a coaching engagement less than this, in my opinion, would not result in substantial benefit for the client and the company.”
To calculate the value and ROI (Return on Investment) of executive coaching, identify the quantifiable and qualifiable objectives of the coaching engagement and the cost of the coaching.
The quantitative ROI is calculated by dividing the benefit (return) of an investment by the cost of the investment, the result is expressed as a percentage or ratio.
ROI = (Gain of Investment – Cost of Investment)/Cost of Investment
Most coaching engagements and research claim to have at least a 500-700% ROI of executive coaching. (ICF article, AM Grant 2012)
Some of the additional metrics used to measure coaching success are:
- Retention or planned attrition of key direct reports
- Placement or promotion of client into key role
- Leadership development, as measured by Cultural improvement measurements and 360 Leadership Impact surveys
- Behavioral Improvement
- Employee Engagement improvement
- 360 Improvement results like Emotional Intelligence 360 surveys.
- Client well-being, decreased stress, work life balance and/or improved engagement.
Can Executive Coaching help me increase revenue?
Mrs. Sichon further explains…I was asked to coach a general manager of a growing business. He needed to increase his revenue by 400% in the next three years. In order to achieve this, he chose four critical objectives to work on: develop his team, hire additional staff and establish process and tools to sustain his new business. He also wanted to develop his own personal leadership style.
He also needed to prioritize these objectives. My client realized that he allowed several distractions to get in his way. The corporate politics, changing agenda and his team’s own inability to handle conflict were some of the items in the way. My client also identified what was in his own way – his limiting beliefs and lack of confidence. He needed to build stronger alliances with his peers instead of unconsciously alienating them. None of these would have been brought to the surface without the assessment and coaching conversations.
In order to calculate the qualitative value of executive coaching engagement, we identified a few key behavioral changes, as measured by a pre and post interview or survey instrument along with a few key quantifiable measurements selected at the beginning of the coaching relationship.
My client was very good at setting stretch goals and realized through feedback, that his team wanted him to believe in them. He appeared formal and no-nonsense to his team who needed to have a stronger relationship with him. My client struggled with the human elements of building trusting relationships. Through our coaching and 360 assessments, he was able to increase his self-awareness of how he can come across as too focused on the task and seemingly not caring about the people. He learned new ways to improve his behavior with this direct team.
As he became more comfortable in his own leadership role, he was able to stretch his own team leaders and raise his standards. He transitioned from being a leader who told people what to do, to a leader who empowered his team. His team responded to his new style, began to trust him more and went above and beyond to deliver results.
Why do we need assessments in coaching?
Assessments reveal information that are either known or unknown to the client. Some of the information we gather through assessments are the culture of the organization, leadership style, team dynamics, management strengths and areas of development, personal motivations and natural skills, to name a few. Assessments reveal blind spots, hidden or underused talents, overused strengths and patterns. Assessments give you a clear picture of what you are experiencing in an objective and quantifiable format. Taken over time, assessments will provide you with a picture of your progress.
There are many proven valid and reliable assessments in the market today, the choice of which assessment to use in a given situation is a competitive advantage of the executive coach. There are executive coaches who are certified and promote only 1 or 2 proprietary assessments, there are also coaches who are certified in several assessments. What is important is not the number of certifications that a coach has. What is critical is to have a coach who can identify the true problem that you are trying to solve and provide the appropriate assessment to reveal a picture of your current situation, strengths and areas of improvement.
Assessments will also save you precious time. They provide you with information that would take months or even years to collect. The ROI of leadership assessment tools are exponentially high. In an investment in time of an hour or so, an on-line assessment can give you a wealth of information that you can use to improve your own leadership or company culture. The use of assessments as the foundation of executive coaching, provides a high ROI in improved performance of the leader and his team.
What has been the most valuable assessment that you have taken? Why is it valuable?