The Value of Coaching

Progressive organizations have embraced coaching for their existing and emerging leaders. Whereas once the use of coaching was reserved exclusively for the most senior of managers, the benefits produced have now provided ample evidence that coaching improves performance and enjoyment of work throughout the broader workforce. What’s more, decision-makers also have a variety of coaching forms to consider as they bring this service into their workplace. 

However, it is becoming more common to try to measure the impact of coaching when deciding how to invest in this development approach. This decision is usually accompanied by some version of the question: “What is my return, and how do I know this was worth the expense?” And while this line of thinking is both warranted and reasonable, providing clear and predictable answers is proving to be quite a challenge. 

This article will pose two views for you to consider and is intended to help you determine what forms of “return” are most relevant for your organization. We’ll discuss the merits of both quantifiable data and anecdotal evidence, and how both provide complementary endorsement for the use of coaching. 

Capturing and Retelling Stories: The Basis of Culture 

The meaningful conversations that occur between a coach and client routinely uncover and bring visibility to changes in attitude, capabilities, growth, and performance, all of which improve the coachee’s contribution to their team and business. 

Indeed, this is the reason that someone engages a coach to begin with. But how often do we fail to capture those stories and share them, so the value of the coach engagement is substantiated? While confidentiality is paramount to any dyadic work in this context, the themes and examples of improved performance can certainly be shared in ways that honor the coached leader. 

Let me provide a few examples of valuable coaching anecdotes. 

In one case, a senior leader was disappointed in the level of engagement demonstrated by his team during their group meetings and project update calls. He could see that work was being done, but the energy level was down, and collaborative interaction had all but come to a stop. People began missing the update meetings, and even when they attended, the team’s lack of conversation was troubling. This produced an overall feeling of heaviness and disengagement across the team. 

However, in addressing this with his coach, the leader identified a completely different way to manage the team’s interactions and gatherings: by empowering them to run the meetings themselves. As he implemented this approach, engagement levels soared to the point where team members were volunteering to run the next meeting. Agendas were tailored by the team for the team, and the effective use of time was energizing. Projects were completed faster and more accurately, and ideas were shared openly and without reservation. This leader also reported that the attendance problem disappeared, and the group had created a prideful mojo of its own. 

In another situation, a very senior leader, who was skeptical of the coaching process, was quite frustrated with her stakeholders. She had become increasingly frustrated with having to repeat her instructions for work over and over, and was aggravated about her staff’s perceived lack of attentiveness. She felt she was wasting her valuable time generating movement, and she was not getting the performance she expected from otherwise talented people. 

However, throughout her coaching engagement, she became aware of her own communication shortcomings and how her approaches and techniques were causing the team members’ unwanted behavior. At one point she said to her coach, “I had no idea that I was actually the problem, not them.” Once this reality became visible, and she adopted new communication techniques under the watchful support of her coach, the situation changed dramatically. Information flowed freely, repeat instructions disappeared, actions were taken more quickly, and a sense of fluidity flavored the workplace. 

Additionally, here’s a case where the story is supported with a direct financial return. An emerging leader was working with his coach to address his reservation in speaking up to challenge those in higher positions than his. He realized he had greater value to the organization than he was offering, and he learned how to bring his thoughts forward in a way that gave him both confidence and resonance. Once comfortable with his new skills, he presented to senior management an observation he had made several months prior regarding how the company could save significant internal expenses. His recommendation was embraced, and his business unit experienced an annual cost saving exceeding $280,000. The young leader attributes this entirely to the effectiveness of his coaching engagement. 

While this third example does provide a direct connection to “hard dollars,” we cannot overlook the meaning of the story behind the finances. The culture within any organization is created and sustained by the conversations and stories that are shared among its workforce. Retelling the breakthroughs, ideas, innovation, and professional transformation that occur in a coaching setting is an essential component of making its value visible. 

As we consider the value of coaching, and the return on its investment, we must implement methodologies and processes that capture these stories. Value is not limited to facts and figures, but also must consider the chemistry, effectiveness, engagement, and energy within the workplace. Building a repository and establishing communication channels to widely share these anecdotes are essential components to deriving value from coaching. 

One final note on effectively collecting and sharing stories: when working with several of our Bluepoint clients, they have benefited by aligning and categorizing their stories of return with the organization’s stated values and beliefs. Since culture is the shared language of employees, illustrating a direct connection between the core values of the firm and benefits derived through coaching engagements has proven quite meaningful and powerful. 

Quantification of Coaching Value 

As the business world continues to assign great meaning to the ability to measure and track business growth, outcomes, and progress, this mentality is also finding its way into the talent and leadership development space. 

Increasingly, decision makers seek hard data to validate developmental investments and to substantiate the return. This poses quite a challenge for professionals within organizations responsible for the growth of their leaders, since the return on skill and leadership behaviors can rarely be extracted from all the other factors affecting an individual. 

For example, if a sales leader is being coached at the same time the company decreases its product prices or announces a new go-to-market strategy, how can you discern what portion of the leader’s subsequent elevated production is solely attributed the coaching engagement? 

In reality, you can’t. There are too many variables involved. 

However, this does not mean we have no way to determine if investing in coaching and leadership development has value through means of quantitative data. But to do so, we may have to loosen our connection to traditional business value metrics such as increased revenue, decreased costs, EBITDA, inventory turnover, and other foundational measures. 

Many progressive organizations have found success by moving from these targets to ones that have a more meaningful connection to their leaders’ impacts, such as: 

• Leader and key employee retention. Investing in existing and emerging leaders through coaching can easily be associated with retention success of the people you do not want to lose. 
• Team retention and turnover. As leaders improve, their people are less likely to become undesired flight risks. 
• Team morale and engagement. Multiple methods can be used to measure team and group morale and engagement levels, both of which have a positive correlation to leader development. 
• Companywide morale. The general workforce wants to see their company investing in people development. It sends a positive message about valuing people. 
• Expanded bench strength pool. As organizations are struggling for future leader candidacy, coaching prepares individuals for greater roles, and succession planning becomes visible. 
• Promotions. You can track the number of professionals who are promoted into higher-level roles following their coach-driven development. 
• Expanded and/or new leader roles. You can track the number and types of personnel who have taken on broader assignments or expanded responsibilities resulting from coaching. 
• Leading change. Leaders coached in change strategies are more adaptive and flexible in moving your organization quickly to next-stage intentions.
   

These measures can be quantified and tracked through a variety of methods, including surveys, interviews, questionnaires, and polling. They can be assessed at an individual leader level or as groups or cohorts. This data can then be monitored over time to see how progress is achieved. 

Download this free resource to learn how you can begin to think about each of these metrics and develop methods to track them. 

While the factors listed above provide insight into the effect leaders are having on the organization, we cannot limit our valuation of the investment made in those leaders through this lens alone. We also must factor in the effect that great coaching can have on the individual professionals themselves. 

Consider these powerful, common outputs of coaching engagements on leaders: 

• Increased confidence 
• Elevated resilience and reduced fatigue 
• Improved communication skills 
• Better stakeholder relationships 
• Stronger people-development abilities 
• More effective decision making 
• Strengthened emotional intelligence 
• More productive time management 
• Effective stress and change management   

This list can go on and on, but the key takeaway is to recognize that these person-specific benefits do have value, even though they can be extremely difficult to quantify and measure. Some of these outcomes can be captured through similar methods to those mentioned earlier. Others simply require a confident acceptance of their worth at the surface level. 

Compiling Data from Different Perspectives 

To compile data on these individual transformation elements, some organizations collect data from two significant perspectives. 

The first is from the leaders themselves. This is usually in the form of a self-reported confidence level in a particular skill, ability, mindset, or approach. The leader completes a self-rating tool on a specific development goal at both the beginning and the end of the coaching engagement. This before/after measure illuminates the leader’s belief in their ability to perform at a higher level based on the work done with their coach. The assessment also provides a wonderful opportunity to capture specific stories or anecdotes about the leader transformation that can then be retold as part of the investment’s justification. 

The second perspective is capturing the observations of those who work with the coached leader. As with the coachee self-assessment, stakeholders can complete pre- and post-coaching engagement ratings on the leader’s ability that are connected to their development objective. 

For example, if the leader decides to elevate her listening skills when working with her team, the team members themselves can rate their perspectives on that ability at the beginning and end of the engagement to see what progress has been achieved. While acknowledging that we’re collecting data based on individual perceptions, which are not uniform or standardized, we are still able to glean the extent to which the intentions of the engagement have been met. 

Closing

Coaching is here to stay, and there is ample evidence to support its positive impact on both individuals and organizations. 

As decision makers contemplate the best way to bring or expand coaching in their workplaces, they will certainly continue to define return-on-investment guidelines and goals. We have found that there are two equally important outcome targets to embrace for justifying the related costs. 

First, organizations must implement methods of capturing, retaining, and retelling actual stories produced through positive coaching engagements. There really is no substitute for making visible what happens within an individual leader’s experience and how that benefits the company. 

We also must continue to define data points and metrics that have unique value to the organization. This can be achieved by reporting on pre- and post-engagement progress both from the leader’s perspective and from those on their teams, and we can do so in terms of both observed improvement and confidence levels. 

Finally, we can track and connect coaching outcomes with organizational goals. 

The best place to start is to clearly define why you are engaging in coaching, and let those objectives be your guide for tracking success.