I didn’t believe it either until I did a little research. These results were published by MetrixGlobal, whose principals were honored in 2003 by the American Society for Training & Development. As I delved into the research, I was impressed to find that it was based on a survey of 70 executives in the United States, Canada, Brazil and Mexico and yielded the following results:
Coaching produced a 529% return on investment and significant intangible benefits to the business. Including the financial benefits from employee retention, coaching boosted the overall ROI to 788%. |
The higher up the organizational ladder an executive climbs, the less he/she can depend on their technical skills, and the more they must have command of effective interpersonal skills and emotional intelligence.
Organizations spend large sums of money to hire coaches for top executives in an effort to improve these abilities.
So, why isn’t everybody doing it?
Between 25% and 40% of the Fortune 500 use executive coaches, according to the Hay Group, an international human resources consultancy. Manchester Inc., a career consulting firm, reports about 60% of organizations currently offer coaching or other developmental counseling to their managers and executives. Another 20% of companies said they plan to offer coaching within the next year.
Although it was once used as an employee intervention, coaching is now part of the standard leadership development training for executives in such companies as IBM, Motorola, J.P. Morgan Chase, Hewlett-Packard and many others. Brokerage firms and sales-based organizations such as insurance companies use coaches to bolster performance of people in high pressure stressful jobs.
The business case for coaching.
Harvard Business Review’s January-February 1998 article entitled, “The Employee-Customer-Profit Chain at Sears”, by Rucci, Kim, and Quinn, outlined a model to measure coaching results and reported that 5 units increase of employee attitude led to 1.3 units increase in customers’ positive impression, resulting in 0.5 percent increase in revenue growth.
Michigan-based Triad Performance Technologies, Inc. studied and evaluated the effects of a coaching intervention on a group of regional and district sales managers within a large telecom organization. The third party research study cites a 10:1 return on investment in less than one year.
See the full list of research outlined in our upcoming June 2006 Newsletter for Corporate Leaders, “The Business Case for Coaching”. To receive this issue, join our mailing list on our website by May 30th. In summary, effective executive coaching explores the leadership competencies and skills necessary for effective leadership execution and the underlying concepts, beliefs, attitudes and interpersonal behaviors that impact individual effectiveness.
Recommended Corporate Leadership University training course: “Manager and Leaders as Coaches.” A one day training course that builds a coaching culture through the development of core coaching skills necessary for managers to build alignment, accelerate goals and increase execution and results. Conducted by Vision Quest Consulting. Call or email us for more information. 978-692-4454, wcapland@visionquestconsulting.com
We offer leadership consulting to help you measure the leadership initiatives in your organization. Call or email us for more information. 978-692-4454, wcapland@visionquestconsulting.com
Leadership Coaching Newsletter is written and produced by Wendy Capland. If you have any questions or comments, please send them to: wcapland@visionquestconsulting.com. We'd love to hear from you.
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