Why spend money on business and executive coaching

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Executive Coaching

Why Spend Money On Coaching? – The Benefits

Prerequisites

Evidence about the benefits of executive and managerial coaching abound – be it in the form of personal testimonials or surveys and research findings. The overall conclusion is that, given a few conditions, coaching offers substantial benefits for both the manager in coaching and the sponsoring organisation. The conditions are as follows:

the coachee must have a clear picture of what the coaching process entails. The coaching should be based on a methodology or model that provides a concrete map of the road ahead.
the continuity of the coaching sessions should be ensured. The coachee must have the opportunity to pick up the dialogue where it was left in the previous session.
the dialogue between coach and coachee in sessions should be characteristic of everyday business language.
the outcomes of coaching should be measurable. Clear objectives for the coaching contract must be set at the start and measurable criteria of success, must be agreed. Metrics should apply at two levels namely observable change in the behaviour, and improvement in the productivity, of the coachee.
the coaching relationship between coach and coachee must be of an uncompromising, confidential nature. The coachee needs a safe place, a secure container in which to dialogue and work through the personal issues that will release his potential to grow in his organisational role.
the coach must be professional and competent. The coach should have completed an appropriate training programme including supervision, be subject to ongoing peer supervision and be professionally accredited by an acknowledged institution in the field of coaching/counselling.
the expectations of the contribution of coaching to increased executive and organisational improvements must be realistic. The primary objective of coaching is to help managers and executives to learn and grow in their organisational roles. Coaching is neither a magic wand nor a panacea for a wide range of systemic organisational problems outside the control of the staff being coached.
the coaching process should have a gentle closure and gradual disengagement. The coach should be available for short conversations from time to time after the formal contract has ended.

Given these conditions coaching provides significant benefits at both the individual and the organisational levels.

Benefits to the Individual

As summarised in a published survey, executives who have been in coaching, report the following significant benefits:

individualised, one-on-one attention over an extended period of time. The standard coaching process, usually extending over at least six months with a session every month, or at three weekly intervals, provides the time for sustained learning and change to take place. Opportunity is provided to test drive new behaviours and get feedback from both colleagues and coach for further fine tuning during the coaching contract period. Without negating the role of training courses and educational programmes such as one-day workshops and short courses on subjects such as leadership and academic programmes such as an MBA, executives report that coaching is more hands-on and rigorous in supporting and ensuring attitudinal realignment, new ways of thinking and feeling and changes in on-the-job behaviours.
expanded thinking through the dialogue with an attentive and interested outsider. In coaching sessions the executive is stimulated and challenged by powerful questions and comments. It helps the coachee to think out loud, become more reflective and aware of their intuitive knowledge and unexplored ideas and thought processes. The coach acts as both a sounding board for the coachee and a devils advocate, posing challenging and thought provoking questions and ‘what ifs’. The coachee starts to think about his/her thinking and develops the ability of ‘double loop learning’.
greater self-awareness and the uncovering of blind spots. The coaching session is a ‘safe place’ and allows the coach to be provocative and challenge the coachee to consider specific blind spots with regard to his thought processes, emotional tendencies, interpersonal behaviours and assumptions – allowing him to confront personal habits that are hindering his growth and the fulfilment of his potential. The quality of dialogue engaged in the coaching session is seldom practiced in work place discussions and hardly ever in conversations with colleagues and superiors and team members.
personal accountability for growth and development. The coaching sessions and the role of the coach provide an objective outsider to assess progress, facilitate the coachee in setting and committing to development plans and to hold him accountable. As in personal fitness programmes it is easy to learn the correct techniques with a few visits to the gym, but it is also easy to lose your way by cutting corners, becoming sloppy or missing workout sessions in the absence of a personal coach. The role of the executive coach creates sustained effort in the coachee which leads to ingrained changes by the end of the coaching contract.
just-in-time learning . During the coaching contract period, the sessions often serve the function dress rehearsals for important events and situations that the executive needs to handle such as meetings presentations and awkward interactions with a colleague or team member. Role playing the event or walking it through with the coach allows for on the spot learning and practice in the form of dry runs (1)

The survey findings reported above summarise numerous lists of individual benefits published on the internet, in the press and in technical and research publications. One such list reports the following benefits. The executive/manager will:

become more effective in handling complex interactions with people by an increase in the range and flexibility of his/her behavioural repertoire.
increase capacity to handle what is on his/her plate and in areas such as planning, organising, complex decision making and clarifying roles and responsibilities.
improve his/her social competencies and interpersonal relationships at work.
substantially develop his/her emotional intelligence in terms of awareness of emotional responses and processes in self and others and how to deal with these in productive ways.
increase his/her ability to manage self and others during periods of organisational turbulence, transition, crises and conflict.
improve his/her ability to manage career transitions and grow both personally and professionally as a result.
develop flexibility to handle the tensions between work needs, family needs and personal needs.
gain skills to positively impact the overall effectiveness of the team and the organisation (2)

Benefits to the Organisation

When it comes to the organisational benefits of coaching, Management Committees, CEO’s and Boards and HR/OD functions are increasingly interested in the contribution of ‘soft’ interventions and development programmes to the bottom line.

Formal research on this question is scarce - at least partly so because the question is inappropriate. It is very difficult to design research that will isolate and highlight the singular effect of coaching on bottom line financials. However, the Manchester US Study (3) found a return on investment of 545%, or 5.45 times its investment in coaching and the Metrix Global Study (4) found a comparable ROI of 529%.

Other quantitative studies report the following benefits:

while training alone increased productivity by 22%, training paired with coaching increased productivity by 88% (5)
a study of 100 executives reported that coaching resulted in improvements in productivity, quality, customer service, executive retention and profits(6)
a study to evaluate the impact of coaching using the ‘success case’ method found the following: savings of $100.000 by retaining two key executives; improved efficiency for account managers and improved sales in excess of $250.000; improved customer retention and satisfaction that resulted in savings of more than $100.000 (7)
a study by the Hay Group found that 30% of organisational bottom line performance to be the result of organisational climate and that in turn poor inter personal skills affected climate adversely as reported by 81% of the respondents. At the same time 86% stated that leadership behaviour improved with coaching, thus indicating a coaching – interpersonal skills – climate – organisational performance link (8)

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