Executive Coaching: Measuring (and Communicating) ROI

Researchers in Norway recently set out to answer an enduring question: does coaching (in this case, executive coaching) really work?

The Dutch researchers looked at 144 executives and middle managers at a Fortune 500 company and found that yes, coaching makes a difference.

It can even, they wrote, “transform” performance on the job.  ”Findings indicate that there are significant effects of external coaching on psychological variables affecting performance such as self-efficacy, goal setting, intra-personal causal attributions of success and need satisfaction,” wrote the researchers, Frode Moen and Einar Skaalvik of the Norwegian University of Science and Technology in Trondheim.

Of course most executives and corporate human resources types don’t read the latest Norwegian coaching research. They may know that the most successful companies in the world provide their employees with coaching, but do they have any reason to believe it works?

Part of the problem with coaching’s effectiveness question is this: most companies don’t know how to tell if coaches are making an impact.

Vicki Espin, an executive coach in the U.K., found that only 54% of London financial institutions measured the success of their coaching programs—and only 30% were able to assess the influence of coaching on their institution’s bottom line.

“The success—or otherwise—of much corporate coaching is unknown,” said Espin, who has written a white paper on the topic to help companies evaluate whether coaching is right for them, and if it is, how to know it’s working. “It highlights the issues that companies should consider before engaging a coach to ensure that they will get a measurable return on their investment.”

ROI remains an area of unknown for coaching, as we reported here last September, when researchers reported widely varying estimates of the return on investment for coaching: “one study finding an average ROI of almost six times the cost of coaching, another estimating a dramatic ROI of 700 percent.”

In London, Espin worked with national occupation standards for coaching and mentoring in the workplace created by ENTO (originally known as the Employment National Training Organization) to create a “framework to guide (HR professionals) in the selection process for the coaching providers.”

The framework helps companies evaluate a coach against a standard set of values and standards, such as demonstrating “empathy, sensitivity, compassion and respect for the coachee or mentee;” and “(acting) in an open, honest and ethical way.”

The guide also suggests directly asking a coach if they can “demonstrate a track record of achieving success with other clients.”

In her suggestions for managing the coaching relationship, Espin outlines a “clear contract” between company and coach that includes:

-An agreed definition of coaching
-Agreed measures of success
-Client confidentiality
-The roles in the relationship for the coach, client and sponsor
-The number and length of individual coaching discussions
-Agreed feedback methods to the sponsor and organization
-Agreed methods and timescales for evaluation of the coaching contract.

“The impact of coaching is difficult to measure, post-event, if measures of success are not agreed upfront,” said Espin. “So it is important to consider, before even engaging a corporate coach, what your objectives are and how you will monitor progress and measure success.”

How have you demonstrated your ROI to companies or clients? Have you set out a contract that details what you’ll do and how your work will be measured? Can the work of a coach truly be boiled down to a checklist of objectives met or missed?