This case study provides critical insights into how coaching creates value in an organization.
Phillips, J. J. (2012) Coaching for Business Impact: Creating Value, Including ROI, Through Executive Coaching. In Phillips, P. P. and Phillips, J. J. Measuring the Success of Coaching. ATD Press, pp., 183 – 201.
I have recently experienced some of the gifts offered to coaches worldwide to enable them to develop their discipline. These include practitioner research, international conferences, and research grants. My first column for the year discusses the importance of these gifts and how we can make good use of them.
Practitioner Research and Reflective Practice
What do we really know about how coaching works, exactly how well it works, and when it works best? In essence, not much. Our “knowledge” is based mainly on what coaches say they do, or on what they think makes sense-rather than on observation of what they really do, or on research into coaching outcomes experienced by individuals, teams, and organizations. As a coaching practitioner, it is essential to continually research your own practice, ultimately developing your own professional competence through reflective practice.
David Peterson (2009) suggests simple ways to do this. For example, try different techniques in your coaching, i.e., with alternate clients do a background interview that is only one third of your normal interview; see what happens and take notes on what you observe. Secondly, you can generate a list of experimental ideas for your coaching from reading about new techniques, new types of questions, or new processes. Try one new thing every coaching session and record your findings. Thirdly, you can ask your coaching participants what was the most effective thing you (as coach) did in the session, and why was it helpful.
Also ask what was the least effective thing, and why was it not helpful? Record your feedback, looking for patterns, and substitute new processes for the least effective things. Think about participating in coaching research studies, or finding clients from your own practice to participate in such studies. Most importantly, think critically about and read current coaching research, trying to incorporate findings into your own practice.
The general characteristics of practitioner research are that (Fillery-Travis, 2009):
Coaching Conferences
Coaching in Medicine and Leadership
In late September 2009, I attended and spoke at the second International Harvard Coaching Conference on Coaching in Medicine and Leadership. Coaching has emerged as a competency dedicated to helping individuals grow, develop, and meet personal and professional goals while at the same time building personal and professional capacity and resilience. Although every year coaches are servicing a US$1.5 billion market, the most developed market segment is leadership coaching in organizations-less than 20 percent of professional coaches are from the mental health or medical fields. The Harvard conference was therefore a groundbreaking event, with lectures and workshops by world leaders in coaching and coaching research. There were three tracks: Overcoming the Immunity to Change; Coaching in Leadership-Theory and Practice; and Coaching in Health Care-Research and Application.
ICRF2 London: Measuring Results
In November I participated in the second International Coaching Research Forum (ICRF2) held in London, sponsored by the IES (UK Institute for Employment Studies) and the International Coaching Research Forum (ICRF). ICRF2: Measure for Measure looked specifically at how to design coaching measures and instruments, with the ultimate aim of discovering what makes coaching effective. Researchers from around the world met to discuss three major topic groups: process measures, outcome measures for executive/leadership coaching, and outcome measures for health, wellness, and life coaching. The format for each discussion was:
Critical issues in measurement and methodology were discussed, the biggest concerns relating to:
A final report will be made available on the websites of both the International Coaching Research Forum and COMENSA (Coaches and Mentors of South Africa) early next year. All of the group forums were recorded, and key points from each discussion will be included in the final report.
GCC Rainbow Convention-Cape Town 2010
These recent conferences have implications for all coaches worldwide, and particularly for the work being carried out by the Global Coaching Community (GCC), an international dialogue aimed at furthering the development of coaching. The GCC’s last convention took place in Ireland in July 2008 and produced the momentous Dublin Declaration on Coaching. The declaration was supported by recommendations from the GCC’s ten working groups, and has been endorsed by organizations and individuals representing over 15,000 coaches around the world.
It is now South Africa’s turn to host this pivotal event and help take the dialogue forward, and so the GCC Rainbow Convention will be held in Cape Town during 10-16 October 2010. The convention will showcase the results of pioneering practitioner research being undertaken by “pods” of coaches around South Africa. It will also continue the development work undertaken by the GCC’s ten working groups, as well as host specialist workshops on aspects of coaching practice.
Grants from the Institute of Coaching
Another boost to the professional development of coaching practitioners is an endowment of US$2,000,000 from the Harnisch Foundation to the Institute of Coaching based at Harvard Medical School/McLean Hospital. The Institute is able to translate this generous endowment into grants totaling US$100,000 per year to fund rigorous research into coaching, thereby helping develop the scientific foundation and professional knowledge base of the field.
The Institute offers four types of grant, with deadlines for applications on the first day of February, May, August, and November each year:
Please visit http://www.instituteofcoaching.org/ to learn more about the Institute’s various grants, membership programs, current research, and publications and for information on the recent Harvard Conference. As a Founding Fellow of the Institute of Coaching and a member of its Research Advisory Board, I am keen that all practitioner researchers in coaching are aware of these research grants. It is crucial that we begin to build the body of knowledge on what is working and what still needs work within the discipline of business coaching worldwide.
How Can You Play a Part in the Development of the Field?
Our goal in developing reflective research and enquiry is to make a substantial contribution to the emerging practice of coaching worldwide (Stout Rostron, 2009). Your gift to our emerging discipline is to play a practical part. For example, you can:
Systemic Team Coaching Research Survey
Professor Peter Hawkins, creator of the Seven-Eyed Supervision Model1and founder of the UK Bath Consultancy Group, is currently writing a new book on Systemic Team Coaching to be published by Kogan Page in 2010. He would like this book to best represent what is known and practiced in the field of team coaching. He is asking thought leaders, leading researchers, and senior team coaches to contribute from their experience. All contributions will be fully acknowledged and you will be referenced. Everyone who fills in the questionnaire will also be invited to the book launch in the UK in autumn 2010. Key questions are as follows:
Please email responses to: Professor Peter Hawkins or send to Barrow Castle, Rush Hill, Bath, UK BA2 2QR.
This article first appeared in Business Coaching Worldwide (Feburary Issue 2010, Volume 6, Issue 1).
Fillery-Travis, A. (2009). Practitioner Research Workshop, GCC Rainbow Convention, notes.
Peterson, D. (In press). “Executive Coaching: A Critical Review and Recommendation for Advancing the Practice.” In Handbook of Industrial and Organizational Psychology, edited by S. Zedeck. Washington, DC: American Psychological Association.
Stout Rostron, S. (2009). Business Coaching Wisdom and Practice: Unlocking the Secrets of Business Coaching. Johannesburg: Knowledge Resources. Available from http://www.kr.co.za/.
Wilkins, N. (2009). “Countdown to the GCC Rainbow Convention!” COMENSAnews, November. Available from http://www.comensa.org.za/.
1Hawkins, P. and Shohet, R. (2007) Supervision in the Helping Professions. United Kingdom: Open University Press.
Dr. Sunny Stout Rostron, DProf, MA is an executive coach and consultant with a wide range of experience in leadership and management development, business strategy and executive coaching. The author of six books, including Business Coaching Wisdom and Practice: Unlocking the Secrets of Business Coaching (2009), Sunny is Director of the Manthano Institute of Learning (Pty) Ltd and founding president of COMENSA (Coaches and Mentors of South Africa).
Business coaching is expanding as a means of improving programs, processes, and even people. Sponsors, clients, and corporate executives–those who fund coaching activities–want to hear about successes in terms that they understand, terms related to organizational needs. Everyone might know that a coaching program made a positive difference, but someone insists on getting to the bottom-line: what did we spend and what did we get in return? The following is a brief summary of a real-life case study of a coaching intervention demonstrating measurement and evaluation, including the calculation of the return on investment (ROI)
Background
A USA-based, internationally established, prosperous hotel company, the Nations Hotel Company (NHC), sought to maintain and improve its status in the highly competitive hospitality industry. With hotels in 15 countries, 98% brand awareness worldwide, and 72% customer satisfaction rating, NHC wanted to help executives find ways to improve efficiency, customer satisfaction, revenue growth, and retention of high-performing employees. Challenged to execute this project, the Nations Hotel Learning Organization (NHLO) developed a program, including as a pivotal component a formal, structured coaching program called Coaching for Business Impact (CBI). NHC corporate executives wanted, as part of the process, to see the actual ROI for the coaching project.
Process
The NHLO first surveyed executives to identify learning needs and to assess their willingness to be involved in coaching. Most of the executives indicated that they would like to work with qualified coaches to assist them through a variety of challenges and issues, and that this would be an efficient way to learn, apply, and achieve results. The measurement and evaluation goal for the senior executive team was to assess results for 25 executives, randomly selected (if possible) from the participants in CBI. Figure 1 depicts the 14 steps in the new coaching program, from the beginning to the ultimate outcomes. For the planned ROI analysis, step #4 was critical; executives made a commitment to provide data on action plans and questionnaires.
Although these steps are self-explanatory as to the coaching process, the ROI process involved gathering data throughout the coaching engagement so that evaluation results could be reported for all five levels:
To collect complete and reliable data for Levels 4 and 5, executive-participants completed action plans that included questions addressing the four business impact measures sought to be improved:
1. What is the unit of measure?
2. What is the value (cost) of one unit in monetary terms?
3. How did you arrive at this value?
4. How much did the measure change during the evaluation period? (Monthly value)
5. What other factors could have contributed to this improvement?
6. What percentage of this change was actually caused by this coaching for business impact program?
7. What level of confidence do you place on your estimate of the change attributable to this program? (100% = Certainty and 0% = No Confidence)
Using the action plan responses and collecting data through executive questionnaires, senior executive questionnaires, and company records, the NHLO obtained information to convert data to monetary values (items 1-4 above), to isolate the effects of the coaching on this business impact data (items 5-6 above), and to adjust for errors in estimation (item 7 above).
Evaluation Results
Careful data collection planning allowed the NHLO team to measure the results of the coaching program at all levels. Level 1: Reaction, Level 2: Learning, and Level 3: Application all showed positive results and comments.
Impact: To assess the business impact, the NHLO team assimilated the information on the action plans for the 22 CBI executive-participants who responded. Using these responses, the NHLO arrived at the total adjusted value of the program’s benefits as $1,861,158.ROI: The fully-loaded costs of the CBI program included both the direct and indirect costs of coaching (needs assessment/development, coaching fees, travel, time, support, overhead, telecommunications, facilities, and evaluation). CBI costs for 25 executives totaled $579,300.
Using the total monetary benefits ($1,861,158) and total cost of the program ($579,800), the NHLO developed two ROI calculations. First is the benefit-cost ratio (BCR), which is the ratio of the monetary benefits divided by the costs:
This value suggests that for every dollar invested $3.21 was returned. The ROI formula for investments in any human performance intervention is calculated as it is for other types of investments: earnings divided by investment. For this coaching solution, the ROI was calculated thus:
For every dollar invested in the coaching program, the investment dollar was returned and another $1.21 was generated. In this case, the ROI exceeded the 25% target.
Intangibles: The NHLO chose not to convert all measures to monetary values, creating a list of intangible benefits — improved commitment, teamwork, job satisfaction, customer service, and communication.
Credibility
Credibility of data and of the ROI process itself is always critical. The NHLO’s sources of data (executives and company records), conservative data collection process, isolation of program impact, adjustment for errors in estimates, use of only first-year benefits in the analysis, fully loading program costs, and reporting results at all levels made a convincing case for the CBI program.
Communication
To communicate results to target audiences, the NHLO produced three documents:
To convey a clear understanding of the methodology, the conservative process, and information generated at each level, the NHLO team held meetings with the sponsor and other interested senior executives. Conservative and credible processes and competent communication led senior executives to decide that, with a few minor adjustments in the program, they would continue to offer the coaching for business impact program on a volunteer basis. Pleased with the process and progress, they were delighted to have data connecting coaching to the business impact.
This article first appeared in Business Coaching Worldwide (Fall Issue 2005, Volume 1, Issue 3).
Jack J. Phillips, Ph.D, is a world-renowned expert on measurement and evaluation, chairman of the ROI Institute, and consultant to many Fortune 500 companies. He facilitates workshops for major conference providers throughout the world. His most recent books are Proving the Value of HR (SHRM, Winter 2005) and Investing in Your Company’s Human Capital (AMACOM, Spring 2005). Find out more about Jack’s work at http://www.roiinstitute.net.
As businesses and organizations increasingly turn to coaching for performance improvement and leadership development, questions about the value of coaching naturally arise. In addition, calculating the return on investment (ROI) of coaching can seem daunting. Here are five of the most frequently asked questions that business coaches ask about measuring the ROI of coaching.
Measuring and evaluating the return on investment validates the critical role of coaching as a performance improvement solution. Expressing value in monetary terms puts business coaches on track to meet the growing demand for accountability.
This article first appeared in Business Coaching Worldwide (Summer Issue 2005, Volume 1, Issue 2).
Jack J. Phillips, Ph.D, is a world-renowned expert on measurement and evaluation, chairman of the ROI Institute, and consultant to many Fortune 500 companies. He facilitates workshops for major conference providers throughout the world. His most recent books are Proving the Value of HR (SHRM, Winter 2005) and Investing in Your Company’s Human Capital (AMACOM, Spring 2005). Find out more about Jack’s work at http://www.roiinstitute.net.
Measuring ROI? In business coaching? Yes and yes.
Isn’t this just a fad? Isn’t this impossible? No and no.
As more and more organizations use business coaching as a human resources, performance improvement, and leadership development approach, many executives question its value, particularly as coaching expenditures grow. Whether the engagement takes place in the context of an internal department for coaching or through arrangement with a business coaching firm, coaching assignments and commitments are planned and executed with good intentions. Unfortunately, however, not all coaching engagements produce the value desired by either the individual being coached (participant) or the sponsor who often pays for it. It will be increasingly important that business coaches measure a significant return on investment (ROI) and show the value of business coaching in terms that managers and executives understand.
It’s Not a Fad . . .
Measuring ROI enjoys a history of nearly thirty years of application in a variety of human resource and performance improvement processes and across the full spectrum of industries and organizations. Thousands of trained practitioners implement an ROI process in their own settings and thousands of impact studies are generated annually worldwide. The methodology is the subject of many books in many languages.
It’s Not Impossible . . .
Successfully measuring ROI for business coaching involves much more than simply assessing results achieved. The most effective ROI processes involve four phases: planning, data collection, data analysis, and reporting.
In the planning phase the coach, the person being coached, his or her manager, and the sponsor (client organization) agree on the evaluation plans and establish a baseline for expectations.
The data collection phase occurs in two time frames. Data is collected first during the coaching experience and then at the conclusion of the engagement or at an appropriate follow up time. The data collected include satisfaction and reaction, learning, application and implementation, business impact, and ROI. See Figure 1.
| Evaluation Levels | |
| Level | Measurement Focus |
| 1. Reaction & Planned Action | Measures participant satisfaction with the coaching experience and captures planned actions |
| 2. Learning | Measures changes in knowledge, skills, and attitudes |
| 3. Application and Implementation | Measures changes in on-the-job behavior and progress with application |
| 4. Business Impact | Captures changes in business impact measures |
| 5. Return on Investment | Compares coaching engagement monetary benefits to the program costs |
The third phase in the ROI Methodology–data analysis— isolates the effects of the coaching on the business. The process includes converting data to monetary values using conservative figures (higher figures for costs, lower figures for benefits), capturing costs, calculating the return on investment, and identifying intangible measures and benefits.
Phase four–reporting–requires reaching conclusions, generating reports, and communicating the information to target groups. This new knowledge affords all involved–from the coach and the person being coached to upper level executives in the client organization–the ability to assess the value of the coaching engagement and the opportunity to make adjustments going forward.
Final Thoughts . . .
Developing the ROI in business coaching is not a fad, and it’s not impossible. Measuring ROI in business coaching is, and will increasingly become, an imperative for organizations and coaching firms pursuing the highest standards of accountability.
This article first appeared in Business Coaching Worldwide (Premier Issue 2005, Volume 1, Issue 1).
Jack J. Phillips, Ph.D, is a world-renowned expert on measurement and evaluation, chairman of the ROI Institute, and consultant to many Fortune 500 companies. He facilitates workshops for major conference providers throughout the world. His most recent books are Proving the Value of HR (SHRM, Winter 2005) and Investing in Your Company’s Human Capital (AMACOM, Spring 2005). Find out more about Jack’s work at http://www.roiinstitute.net.
We invite experts and researchers worldwide to apply their expertise to the subjects impacting business coaching, which integrates the work of many adjacent disciplines, including neuroscience, psychology, behavioral science, ethnography, among others.
WABC applies the highest possible standards to business coaching. Extensive research on the topics currently shaping both coaching and business more broadly enhances our knowledge on subjects influencing business coaching standards, programs and practices.
As part of our goal to apply the highest standards, WABC constantly seeks robust research to enhance our evidence base on “what works” or “what is promising” in contemporary business coaching worldwide, while also considering the professional expertise/expert opinion of business coaching professionals.
We invite experts and researchers worldwide to apply their expertise to the subjects impacting business coaching, which integrates the work of many adjacent disciplines, including neuroscience, psychology, behavioral science, ethnography, among others.
