Research shows that the ROI of coaching includes better productivity, higher levels of overall employee performance, lower expenses, revenue and sales growth, higher staff retention, and greater employee engagement. The two most common measures used in the leadership coaching profession today are return on investment and return on expectations. The latter is growing in popularity and use due in large part to the significant challenges involved in calculating a significant ROI. ROI doesn't lend itself particularly well to many “soft skill” development initiatives, and those who have worked in learning and development have known this for a long time.
The popularity and growth of ROE are due to the ability to use it to measure things in a specific way. It is not yet an infallible methodology, but it is much more related to profitability measures than to ROI and, therefore, has more credibility among corporate decision makers. One of the key differences is that this allows organizations to measure the impact of leadership coaching through other metrics that are already being tracked. In addition to asking about the duration of the coaching commitment, find out how often the sessions will be held.
Prioritize coaching among priority people and assign roles to those who have disproportionate influence and contributions. Training the leader to increase those strengths translates into greater retention among the members of that team, a powerful ROI multiplier. A tactical coach could structure a task for the coach to measure (mark) it every time he contacts stakeholders in an interdisciplinary way. Throughout a coach's career, coaches can track the impact of their work through promotions and job satisfaction.
The benefits derived from coaching included improvements in the following areas: working relationships with direct reports and immediate supervisors, teamwork, relationships with colleagues, job satisfaction, conflict reduction, organizational commitment and working relationships with clients. Instead of letting managers assign tasks to them, direct reports will have discussions about development and training with their leader. Another coach may choose to identify an underlying fear that addresses the root cause, such as discomfort with intimacy or lack of self-esteem. The coach can then compare the opinions of the interested parties and more easily see if the leader's change is authentic.
The opportunity presented by this change for the coaching field is to refine its focus on results and organizational impact. The discipline required by this effort will provide coaching with the necessary impetus to develop the state of its science more quickly and with a finer perspective. One way to ensure that you measure the effectiveness of executive coaching is to focus on the type of coach that works with a particular leader.