Sara Sheehan presents a strong case for the value of executive coaching for your business. The return on investment that can be achieved with coaching has been studied numerous times and Sara goes through revealing statistics about real-life results.
More business people than you may think are likely employing the services of an executive coach. They may not reveal it publicly but studies about coaching benefits make a compelling case and many businesses have taken heed. A 2001 study by a Fortune 500 firm and a coaching services group revealed that coaching produced a 529% return on investment.
In this episode, Sara Sheehan details exactly what types of results and ROI you can expect to produce with executive coaching. These are benefits that are both tangible – productivity increases, bottom line profitability increases, and so on – and intangible – improved client relationships, reduced conflict, and more. Sara breaks down the studies done on executive coaching then describes what to expect when you enter a one-on-one executive coaching relationship. Questions you may have about coaching efficacy are answered here.
Resources discussed in this episode:
- “Executive Briefing: Case Study on the Return on Investment of Executive Coaching”, prepared by: Merrill C. Anderson, Ph.D. MetrixGlobal, LLC, November 2, 2001
- “Maximizing the Impact of Executive Coaching: Behavioral Change, Organizational Outcomes, and Return on Investment” by Joy McGovern, Ph.D., Michael Lindemann, Ph.D., Monica Vergara, M.A., Stacey Murphy, Linda Barker, M.A., & Rodney Warrenfeltz, Ph.D., The Manchester Review, Volume 6, 2001
- 2020 ICF Global Coaching Study, Executive Summary
- “How’s Your Return on People?” by Laurie Bassi and Daniel McMurrer, Harvard Business Review, March 2004
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Transcript
Hi there, I’m Sara Sheehan and welcome to my podcast, Transformational Thinkers with Sara Sheehan. Today I would like to share some astonishing findings on the return on investment for executive coaching. If you’d like to learn more after listening today, check out the show notes for a link to book a meeting with me. Have a great day.
Sara Sheehan: [00:00:00] Hi there. My name is Sara Sheehan and welcome to Transformational Thinkers with Sarah Sheehan. Today I would like to talk a little bit about the power of executive coaching and the return on investment that you can achieve. Executive and leadership coaching can help a business grow and thrive tremendously. Today, I’d like to cover four different studies that look at return on investment for executive coaching. And then I would like to talk a little bit about the tangible and intangible business benefits from executive coaching. And finally, I would like to highlight what an experience with one on one executive coaching might feel like, create a scenario, if you will, for what the experience might be for you.
Sara Sheehan: [00:01:09] Starting at the top, all of the research studies that have been conducted on executive coaching and the return on investment for it, show a truly astronomical return on investment. It’s one of those things that you can do for yourself or your business that is absolutely going to be a springboard for success and business results. When you hear that, you start to think, Why aren’t more people doing it? I believe that there are a lot of people out there in the business world that have an executive coach, but they may not be talking about it. They might share in confidence in a very private conversation that they’re working with someone and the return on investment or results that they’ve personally experienced. But I truly believe there are more people out there that are working with a coach and helping to put themselves in a better position every single day.
Sara Sheehan: [00:02:34] The first study was conducted by a Fortune 500 firm and a coaching services group, and the study was published in November of 2001. The bottom line is that the report found that coaching produced a 529% return on investment and significant business benefits. When they included the financial benefits from employee retention, the return on investment number was boosted to 788%. That is phenomenal. This particular study also provided a lot of new insights about the business benefits from executive coaching, and it mirrors the next study that I will highlight as well. Both of these studies found the same business benefits, whether tangible or intangible. The two questions that this first study looked at, research questions that is, the first one is How did executive coaching add value to the business and what was the return on investment? And second question How could executive coaching be best leveraged in the future, especially if coaching was to be expanded to other business regions? Very interesting, straightforward and compelling questions. When taking a look at that study and realizing that it was published over 20 years ago. The second study was also published around the same time in 2001. It was conducted by Manchester Consulting and they surveyed 100 executives from Fortune 1000 companies. This is where the intangible and tangible benefits come into play. They found some remarkable tangible business benefits across both the first and the second study for Manchester. Some of the tangible business benefits include productivity increasing 53%, quality improvements over 48%, organizational strength improvement 48%, customer service improvements 39%, reduced complaints by 34%, employee retention up 32%, cost reduction in the business 23%, bottom line profitability 22%, top line revenue increase 14%, reduced turnover 12%, and many other business benefits. Let’s talk about the intangible side of the equation. In general, across the board, relationships improved, whether it was with direct reports, key stakeholders, improvement of teamwork, improved relationships with your peers or clients. All of those relationships improved by 77% to 37% across the board. Huge improvements in relationships. You can become much more aware of how you interact with people through executive coaching, and that is a great intangible business benefit right there. They also found improved job satisfaction by 61%, reduced conflict by 52%, increased organizational commitment by 44%, and many more business benefits. That is some tremendous improvement that can be found in your business just by being employee first, focusing on your employees growth and helping them to get there.
Sara Sheehan: [00:07:32] The next study that I would like to take a look at is one that was conducted by the International Coaching Federation, and they found the following statistics as the benefits of executive coaching based on their own research. They found 70% increase in individual performance, along with measurable goal attainment, clearer communication and higher satisfaction. They found a 50% increase in team performance evidenced through better conversations, improved collaborations, and enhanced work performance. They found 48% increase in organizational performance through the business results of increase in revenue, increase in employee retention, higher customer satisfaction and customer advocacy. And finally, 86% of organizations saw a return on investment on their coaching engagements, and 96% of those who had an executive coach said they would repeat the process again. Those are stunning findings.
Sara Sheehan: [00:08:59] I would like to highlight the next study. The next study is an article titled How’s Your Return on People. It was published in Harvard Business Review in March of 2004. The authors did a review of three stock portfolios that were filled with companies that spend aggressively on employee development. They found that those stock portfolios outperformed the S&P 500 by 17% to 35%. That is a stunning marketplace finding. If you focus on employee development, not only can you increase your revenue, increase your profitability, reduce costs, you can also perform better in the market by focusing on employee development. That is remarkable. My goodness. When you take a step back and you consider the facts, you consider these stunning findings, why wouldn’t you have an executive coach to help you navigate dilemmas at work. Prepare for difficult conversations. Figure out the best way to approach or solve a problem. Set some really wonderful aspirational goals. Having an executive coach can help you do all of that and more. I just want to create a scenario here. I just want to describe what you can expect to experience with an executive coach. Let’s say you are working with a coach on a 12 week engagement or a 6 month engagement. The types of things that you would expect to do with that executive coach would include things like meet weekly for up to an hour, you might complete a few assessments to help shine a light on your strengths, how you interact with others, and how others perceive you.
Sara Sheehan: [00:11:34] You might be able to talk through performance feedback with your coach as well as talk about what your biggest aspirations are. You can expect to create three lofty, aspirational goals as well as put together all of the strategies and actions that will help you achieve them. You can expect to be able to start working on those goals in a tangible way by working the plan and reporting back to your coach about the results that you’re achieving. You will be held accountable for the actions that you’re taking each week in your coaching relationship. You may find that you increase your visibility at work because you take strategic actions. You might demonstrate your thought leadership to differentiate yourself among your peers at work. And you might take time to rebuild relationships and resolve conflicts that make a difference for you, for your relationships and your future. Finally, you might set up an advisory team to help you be even more successful in the future. That’s just a little bit about what working with an executive coach could look like and what it might feel like for you. If hearing and learning about all of the research that’s been done on return on investment for executive coaching and understanding what a one on one experience might look like, if you would like to learn more by all means reach out to me for a discovery session. Check the show notes for a link to set up a meeting with me. Have a great day.
