Click here for coaching and mentoring information. Executive Coaching ROI

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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.

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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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Do You Need a Coach?

"Executive coaches are not for the meek. They’re for people who value unambiguous feedback. All coaches have one thing in common, it’s that they are ruthlessly results-oriented." FAST COMPANY Magazine

"If ever stressed-out corporate America could use a little couch-time, it's now. Trust in big companies is at an all-time low. Baby-boomers have been burned; Gen Xers aren't expecting the Corporation to take care of them. Under the circumstances, employees are much likelier to go outside and get independent advice to help them be better managers" Karen Cates, Assistant Professor of Organizational Behavior, Northwestern's Kellogg Graduate School of Management.

"Between 25 percent and 40 percent of Fortune 500 companies use executive coaches" .....survey by The Hay Group, an International Human Resources consultancy

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