Return on Investment of Executive
& Business Coaching -Case Study
Return-on-Investment : This Case Study and Report will pique your interest if you are considering whether coaching is worth the necessary investment in time and finance for your organisation. Although written in an American context, our own experience tells us it is equally applicable in Ireland, UK, and Europe.
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Return on Investment of Executive & Business Coaching -Case Study and Report
(Used with Permission)
Prepared by: Merrill C. Anderson, Ph.D., MetrixGlobal, LLC
November 2, 2001
A Fortune 500 firm and Pyramid Resource Group, a coaching services company, recently engaged MetrixGlobal LLC to determine the business benefits and return on investment for an executive coaching program. This executive briefing was excerpted from the final report of the study and is intended for the private use of MetrixGlobal clients and professional associates. Please contact Merrill Anderson, firstname.lastname@example.org, 515 278-0051, for additional information.
The Bottom Line: Coaching produced a 529% return on investment and
significant intangible benefits to the business. The study provided
powerful new insights into how to maximize the business impact from
A Fortune 500 firm launched an innovative leadership development effort
that was expected to accelerate the development of next generation
leaders. The participants in this effort were drawn mostly from the ranks
of middle managers and from many different business units and functional
areas. Leadership development activities included group mentoring,
individual assessments and development planning, a leadership workshop and
work on strategic business projects.
Coaching was considered to be a key enabler for this approach to leadership development because the participants could work privately and
individually with his or her coach to develop specific leadership
competencies. The client organization engaged the Pyramid Resource Group
to provide coaching to the leadership development participants. While
participants spoke very highly of their experience with coaching it was
decided to conduct a formal assessment of the effectiveness and business
impact of coaching. It is intended that the results from this study be
used to determine:
1. How did coaching add value to the business and what was the return on
2. How could coaching be best leveraged in the future, especially if
coaching was to be expanded to other business regions?
Data Collection Procedures
It was decided that the best way to isolate and capture the effects of
coaching on the business was through a questionnaire. This questionnaire
had two parts. Part one was completed electronically via email and
examined clients initial reaction to coaching, what they learned, how they
applied what they learned and captured their initial assessment of
business impact. Part two was conducted over the telephone with each
respondent and probed more deeply into business impact and the financial
return on investment
The target population for the survey was 43 leadership development
participants. These participants were drawn from two regions: Eastern
United States (37) and Mexico (6). These participants represented a cross
section of the business and included those in sales, operations,
technology, finance and marketing. All had been identified as potential
leaders and executives. Thirty (30) of 43 leadership development
participants returned their surveys for a 70% response rate.
Coaching was a very effective developmental tool for the leadership
development participants, producing financial and intangible benefits for
the business. Coaching sessions were rich learning environments that
enabled the learning to be applied to a variety of business situations.
Decision-making, team performance and the motivation of others were
enhanced. Many of these business applications contributed annualized
financial benefits. Other applications created significant intangible
benefits. Overall, the participants appreciated their coaching experiences
and would highly recommend coaching to others.
Three-quarters (77%) of the 30 respondents indicated that coaching had
significant or very significant impact on at least one of nine business
measures. In-depth discussions were conducted over the telephone with each
respondent to further explore the business impact of coaching. 60% of the respondents were able to identify specific financial
benefits that came as a result of their coaching.
Overall,productivity (60% favorable) and employee satisfaction (53%) were
cited as the most significantly impacted by the coaching. Respondents
defined productivity in this context as relating to their personal or to
their work group productivity and half (50%) documented annualized
financial benefits. Employee satisfaction was viewed both in terms of the
respondents being personally more satisfied as a result of the coaching as
well as the being able to increase the employee satisfaction of their team
members. The respondents could not quantify this benefit in financial
terms. Employee satisfaction, then, was a significant source of intangible
benefits. Customer satisfaction (53%) was also a significant source of
The next most frequently elements cited as being significantly impacted by coaching
were work output (30%) and work quality (40%). 20% of the
respondents identified financial benefits as a result of increased work
output. Many respondents reported improvements in work quality, however,
they were not able to quantify these improvements in terms of dollar
benefits. Work quality improvements were considered an intangible benefit
of the coaching.
Program costs were tabulated for all 43 leadership development
participants in determining the return on investment. A 529% return on
investment was produced by the coaching process (excluding the benefits
from employee retention.) While those clients who had customer or people
responsibilities produced proportionally greater financial benefits, the
realization of benefits to the business was fairly widespread throughout
the group involved in this study.
Recommendations were made to maximize the business benefits from Executive & Business Coaching:
Manage the entire coaching process to ensure consistency and quality. Though the content of individual coaching sessions should always be
confidential, the coaching process itself needs to be managed to ensure
that the coaching clients and the coaches are following the appropriate
process and leveraging best practices.
Prepare clients in advance for coaching and don't force coaching on
anyone. Because coaching remains a relatively new development technique,
people may not understand how the coaching process can help them become
better business professionals. The sooner they understand the process, the
sooner they will see results.
Offer clients the facility to select their coaches. Chemistry is important
to build an effective coaching relationship. Provide prospective coaching
clients with information about the coaches including biographies,
education, coaching credentials, functional expertise, industry experience
and other background information.
Provide coaching with strong organizational support.Those being coached should
receive encouragement and support from their immediate managers. Also,
coaching should be conducted in the context of other developmental efforts
such as competency development, assessments, mentoring and leadership
Ensure coaches are grounded in the company's business and culture. Coaches
are more effective when they can identify with and talk about the
realities of their client's environment.
Allow each coaching relationship to follow its own path. A major
difference between coaching and training is that coaching allows the
individual to determine what works best for him or her at a very personal
level. Coaches need wide latitude to work with "the whole person" and help
each client be more effective as a person as well as to be more effective
as a business leader.
Build performance measurement into the coaching process. Evaluation of
coaching should be designed into the process from the beginning to better
set performance expectations and open up new learning opportunities for
making coaching more effective while the coaching is being conducted. For
example, coaching can be refocused to deal with issues or to ensure that
business priorities will be met. In this way, the evaluation of coaching
becomes more than just a measuring stick - it becomes a structured
approach to deepen the business value of coaching.
About MetrixGlobal, LLC
MetrixGlobal LLC is a professional services firm specializing in
performance measurement solutions that increase accountability for
bottom-line business results. Whether it's developing a scorecard for a
corporate university, determining return on investment for a human
resources program or conducting a business impact study on an organization
change initiative, MetrixGlobal consultants partner with clients to create
powerful measurement methodology. Please visit our web site,
www.metrixglobal.net to learn more about us.
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