What does executive coaching yield? What is the return on investment (ROI) of executive coaching? I always find it very important to know where we are heading with coaching.<\/span> \u201cWhat does it cost?\u201d is a question I often get asked, especially by new clients. \u201cWhat does it yield!\u201d is what I indicate. Because that’s what matters, the result. And especially the return on investment. And we can look at that in different ways. <\/span> With the coachee (and if applicable with the supervisor), an executive coaching plan is established. This is done verbally and the key components are put on paper. The plan outlines the contours of the coaching and the goals set in the trajectory.<\/span>
\nWhat is the goal and when is a client or the organization satisfied? <\/span>
\n<\/span>This starts at the beginning of a coaching trajectory. If it is not clear what the desired result is, how can you evaluate the result afterwards? <\/span>
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\nMuch research has been done with proven studies on the ROI of Executive Coaching, focusing on financial results. But objectivity is difficult, especially considering all the variable factors involved in an executive coaching plan.<\/span><\/p>\nExecutive Coaching ROI <\/b><\/h3>\n
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\nMuch research has been done on the financial results of executive coaching. Several, mainly international studies have shown that the ROI of executive coaching is impressive. <\/span>
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\nOne of the studies conducted by PWC showed that the ROI was as much as 7 times the initial investment. A quarter of the coaching clients reported an ROI of 10 to 49 times the cost of the coaching.<\/span>
\nAccording to another study among thirty executives participating in a major development program at a Fortune 500 company, an executive coaching return on investment was measured at 529% (<\/span>Case Study on the ROI of Executive Coaching, Merrill C. Anderson, Ph.D., MetrixGlobal, LLC.). These are just a few measurements and at the same time, I also know that these studies contain subjective elements.<\/span>
\nAt the end of the day, executive coaching results do show that it pays off and thus creates a healthy return on investment.<\/span>
\nThe standard formula to arrive at a correct executive coaching ROI is by subtracting the costs of the coaching <\/span>from the estimated value of the coaching outcomes and then expressing this as a percentage ((estimated coaching benefits – cost of coaching \/ cost of coaching) \u00d7 100%).<\/span>
\nBut is it really so easy to express, thus in \u2018just\u2019 financial results? <\/span>
\nIf my client secures a big deal after the coaching trajectory, what can be attributed to the coaching? Or if the director has to leave after a major reorganization, is the coaching then unsuccessful? No return on investment? Or maybe there is, but just not a financial one?<\/span>
\nTwo important variables in an organizational culture are that employees feel involved and that they feel good within the organization (‘well-being’). These findings after an executive coaching trajectory show another, more \u2018human gain\u2019 from the executive coaching plan.<\/span>
\nI often also experience combinations. For example, the director who had not been happy in his organization for some time and then decided to leave the organization himself. The coachee gains insight and probably yields more elsewhere. And the organization doesn’t spend much money on a departure.<\/span>
\nTo be able to conclude that the executive coaching has indeed yielded results, it is necessary to make a solid start, where a good executive coaching plan is of great importance.<\/span><\/p>\nExecutive Coaching Plan as a Basis<\/h3>\n
\nThe following topics should be clear to both coachee and coach:<\/span><\/p>\n\n
Executive Coaching Results<\/h3>\n