Investing in people, whether time or money, is a fairly basic concept. But when it comes to coaching, there is an increasing need to understand and report back what the ROI (Return on Investment) is, as though that premis doesn’t apply there. However, standard methods of measuring the ROI of coaching don’t work – particularly as initial goals often evolve. Nevertheless, there have been a few studies in the past decade that have attempted to present success rates:
- In 2001 The Manchester Review looked at 100 executives from Fortune 100 companies. The Review look at outcomes and success measurements and compared them to the extent to which behaviour had changed subsequent to coaching. The results showed a 545% ROI.
- In 2009 the ICF Global Coaching Client Study showed a median ROI of 700%
However, these reviews (and there are a few more) take a fairly simplistic approach to measuring ROI, and I say this for a few reasons. A few for instances are: the lack of capture of long-term benefits and prevention of negative outcomes; some of the outcomes are intangible; but also, of course, change in behaviour will have had a ripple effect . For example:
- If a key stakeholder (particularly the boss) is unhappy or stressed in the office we all know about it right? So, if coaching changes that, it can change the environment for many others.
- Coaching will enhance people’s happiness and success
- Resilience – particularly for those left behind after redundancies or during challenging times. For instance, a coach can help clients rehearse giving bad news, change assumptions and further a sense of optimism
- As some who works with clients, so that they think differently as well as acting differently, I’m not so sure the intangible benefit of transformation coaching could ever be captured in an algebraic formula
I am certainly not nervous about discussing the ROI on coaching, but I don’t believe it is a scientific discussion. I would suggest that perhaps we should be looking at a return on expectations, instead of ROI.
What I am clear about is that the coaching contract should give some definition as to what is required from the coach and what the desired outcomes are; considering business and personal objectives and business outcomes. Planning and managing the coaching will help demonstrate its value to the sponsor.
Organisations need to be clear about why they are coaching and once the coaching is under way, I believe it’s about getting feedback and what is noticed on the ground. What do you think?
No man goes before his time, unless the boss leaves early – Groucho Marx