The Bottom Line: Coaching produced a 529% return on investment and significant intangible benefits to the business. Including the financial benefits from employee retention boosted the overall ROI to 788%. The study provided powerful new insights into how to maximize the business impact from executive coaching.
“Wilson Learning research found that 69% of employee job satisfaction stems from the leadership skills of their managers.”
“We’ve done research to show that leadership behavior has a direct impact on climate, and climate has a direct impact on business results. We invest in leadership development because we believe we’re going to be a better-performing company as a result.”
Michael Markovits, Vice President of Global Executive and Organizational Capability, IBM Corporation
“Many challenges face today’s organizations. None is greater than the need to develop
more effective working relationships between leaders and the people they serve.”
What are the organizational benefits for having a coaching initiative?
According to a study done by the Manchester Group, organizational benefits from coaching include:
| Improved Relationships 77% | |
| Improved Teamwork 67% | |
| Improved Job Satisfaction 61% | |
| Improved Productivity 53% | |
| Improved Quality 48% |
What kind of ROI are companies receiving from coaching?
“This Fortune 500 company found 529% return on investment and significant intangible benefits to the business. Including the financial benefits from employee retention boosted the overall ROI to 788%.”
“Overall, the investigators are confident that the Client Company has achieved total impact in the millions. The immediate return on investment will be in the 10 to 1 range. The long-term return will be even higher.”
“Asked for a conservative estimate of the monetary payoff from the coaching they got, these managers described an average return of more than $100,000, or about six times what the coaching had cost their companies.” – Fortune, 2001
Coaching Paired With Training
“A study featured in Public Personnel Management Journal reports that managers (31) that underwent a managerial training program showed an increased productivity of 22.4%. However, a second group was provided coaching following the training process and their productivity increased by 88%. Research does demonstrate that one-on-one executive coaching is of value.” - by F. Turner, Ph.D. CEO Refresher 2001
“Xerox Corporation carried out several studies on coaching. They determined that in the absence of follow-up coaching to their training classes, 87% of the skills change brought about by the program was lost.” — Business Wire, July 30, 2001
Coaching & Sales Professionals
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.
The study found that the following business outcomes were directly attributable to the coaching intervention:
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Is coaching a fad? Who should have access to coaching?
Research by the Chartered Management Institute and Campaign for Learning – “Coaching at Work”. Results issued in a press release dated 16th May 2002:
| - | 80% of executives say they think they would benefit from coaching at work and dismiss the suggestion that coaching is just another fad |
| - | Virtually all managers (96%) think coaching should be available to every employee, regardless of seniority |
| - | 85% of managers say the main value of coaching is in enhancing team morale |
| - | 80% of managers value coaching for generating responsibility on the part of the learner Research by The Lifecoaching Company – “Coaching Today Survey”. Research took place at the HRD Show in London in April 2002, respondents all HR professionals. |
| - | 86% held very positive views on coaching |
| - | 86% of respondents’ organizations have offered coaching at one time or another and coaching is CURRENTLY taking place in over one third (36%) of organizations |
| - | Respondents feel that coaching achieves the following desired outcomes: * A positive impact on other aspects of participants’ lives, both at work and outside the workplace (96%) * A feeling amongst participants of ownership of the issues and the outcomes (85%) * Evidence of learning being put into practice (71%) * Readily-quantifiable and positive results, often demonstrated on the company’s “bottom-line” over the long term (62%) |
| - | TOP 4 words associated with COACHING (from a given list) were: Supportive (98%), Empowering (82%), Holistic (80%), Inspirational (77%) |
| - | TOP 3 words associated with TRAINING (from the same given list) were: Prescriptive (71%), Rigid (70%), Intimidating (50%) |
2002 Human Resource Survey
Lee Hecht Harrison surveyed 488 Human Resource professionals to learn how coaching is being used in their organizations. Companies are increasingly turning to coaching for leadership development, style issues and talent retention, so it makes sense that 55% of respondents said that their organization uses coaching as a one-on-one process intended to maximize management and leadership potential and 54% do so to change behaviors. A surprising number of respondents indicated that their organization uses coaching for personal/psychological counseling (36%), advice on appearance or attire (13%) or preparation for a major speech or presentation (11%).
Coaching and Top Management Challenges
The Blanchard companies identified the top management challenges of organizations. Coaching is a powerful tool that helps organizational leaders improve performance in these key areas:
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In a study published by Fast Company magazine in 2001, Markus Buckingham asserted the following about the U.S. workforce:
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Consider also the following:
| - | The number one indicator of job satisfaction is the relationship between an employee and their direct manager. |
| - | The most important factor in individual success is the capacity to build and leverage a personal network of relationships |
To learn more about how your organization can benefit from coaching, or how to pair coaching with training, contact us