Business Case For Coaching

Companies nowadays are finding it easier, more effective and cheaper to hire a coach to work with their employees than to fire them. Coaches have been hired for all sorts of corporate matters, for individuals and groups, senior management and regular employees. The following article makes a business case for coaches, and shares the powerful results coaching has on companies.

Source: ICA Pty Lmtd, 2002, part 1, page 5-6.

Why Companies Hire Coaches

The motivation for companies to hire coaches was revealed in a recent study conducted by corporate coaching firm, Manchester Inc. The study titled “Executive Coaching Yields Return On Investment Of Almost Six Times Its Cost” quantifies the impact of business coaching. The study included 100 executives, mostly from Fortune 1000 companies, who received coaching from Manchester.

Companies that provided coaching through Manchester to their executives realized improvements in productivity, quality, organizational strength, customer service, and shareholder value. They received fewer customer complaints, and were more likely to retain executives who had been coached. In addition, a company’s investment in providing coaching to its executives realized an average return on investment (ROI) of almost six times the cost of the coaching. Half of the executives in the study held positions of vice president or higher (including division president, general manager, chief executive officer, chief financial officer, chief information officer, partner, principal, and practice leader). Almost six out of 10 (57%) executives who received coaching were ages 40 to 49, and one-third earned $200,000 or more per year.

The coaching programs that executives participated in were a mix of both change-oriented coaching – which is aimed at changing certain behaviours or skills — and growth-oriented coaching — which is aimed at sharpening performance. The coaching programs typically lasted from six months to one year.

The results of the study Manchester’s coaching programs delivered an average return on investment of 5.7 times the initial investment in a typical executive coaching assignment — or a return of more than $100,000 according to executives who estimated the monetary value of the results achieved through coaching. Among the benefits to companies that provided coaching to executives were improvements in:

  • Productivity (reported by 53% of executives)
  • Quality (48%)
  • Organizational strength (48%)
  • Customer service (39%)
  • Reducing customer complaints (34%)
  • Retaining executives who received coaching (32%)
  • Cost reductions (23%)
  • Bottom-line profitability (22%)

Among the benefits to executives who received coaching were improved:

  • Working relationships with direct reports (reported by 77% of executives)
  • Working relationships with immediate supervisors (71%)
  • Teamwork (67%)
  • Working relationships with peers (63%)
  • Job satisfaction (61%)
  • Conflict reduction (52%)
  • Organizational commitment (44%)
  • Working relationships with clients (37%)

Another interesting study that measures the effects of coaching on companies’ levels of productivity and efficiency is Maximizing the Impact of Executive Coaching: Behavioral Change, Organizational Outcomes, and Return on Investment“. Source: Coachfederation.org

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