ROI of Executive Coaching – What are your Figures?

ROI of Executive Coaching – what are your Figures?

According to Hay Group 57% of Fortune 500 most admired companies use 1:1 Coaching, but what is the normal ROI?

Executive Coaching allows clients to focus on their individual development plans, learning to solve problems, reflecting on current experience, clarifying career direction, increasing self awareness, coping with change, increasing their personal impact and enhancing the performance of their teams.  A bespoke approach to personal development results in increased effectiveness.

All top athletes and sports personalities have a Coach.  However, according to the latest study from Stanford Graduate School of Business nearly two-thirds of CEOs do not receive Coaching or Leadership advice from outside Consultants.  The Executive Chairman and ex CEO of Google, Eric Schmidt advocates having an Executive Coach.

Interestingly, almost 43% of CEOs surveyed rated Conflict Management skills the area of most concern, followed by Sharing Leadership (36%), Listening and Communication Skills (both 32%), and Planning Skills (25%).  Our research at Natural Talent Bristol has also identified high/low Assertiveness, Active Listening, and Talent Management as common areas of development for CEOs and senior managers as a result of 360 Feedback.

CEOs often don’t see the need to work on their softer skills – as long as the business results are good they don’t tend to prioritize their ‘soft skills’ development.  In the Stanford survey ‘Compassion’ came out as 18%, Interpersonal and Persuasion Skills at 14%, and Motivation 11%.  However, CEOs should view Coaching as a tool for also improving what is already high performance.  Delegation and Empowerment and senior team effectiveness are viewed as key Leadership Competencies to develop.

CEOs who receive Executive Coaching can realize the benefits of developing their interpersonal skills in order to build better working relationships with the Board, key Stakeholders, the SMT and clients.  Our experience has shown that developing the right levels of Assertiveness and improving Negotiation skills enables the CEO to manage and channel conflict in a constructive way in order to better problem solve, better manage his or her team and motivate the organization to achieve their business goals.

360 Feedback and Personality Profiles are very beneficial in assessing a leader or manager’s key strengths and weaknesses and in identifying their levels of Emotional Intelligence. Emotional Intelligence is the ability to identify, understand, and manage our own moods and feelings and those of other people. It involves self-awareness, self-direction, interpersonal sensitivity, and organizational awareness.

Leaders and managers who have high Emotional Intelligence are usually able to manage their emotions better, communicate more effectively, lead and manage change more successfully, and tend to have more efficient problem solving and decision making skills.  Studies have shown that a high Emotional Quotient (EQ) also boosts career success, entrepreneurial potential, leadership talent, health, relationships, humor and happiness.

A Leader or manager who has worked on improving his or her Emotional Intelligence during Executive Coaching will tend to have a happier more productive work force, which in turn creates a more positive high performance culture.  A recent study following a 360 Feedback Review on 1,361 managers in global corporates showed that feedback-based Coaching increased the managers’ performance significantly even up to a year later.

Quantitative reviews suggest that Coaching Programmes  can achieve improvements of 25% – 50%, but managers can only improve if they receive accurate and ongoing constructive feedback from their Executive Coach and/or a manager or work ‘buddy’.

Figures show that the Return on Investment from Executive Coaching Programmes can be as much as 500%, however, in our experience ROIs may be as high as 7,000% as a result of a Face to Face 360 Feedback Review and Executive Coaching Programme, in particular where senior managers in Sales roles have received constructive feedback and highly practical Coaching, or where the cost of retaining senior executives through providing Coaching has been over $100,000.

What figures have you experienced?

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