I’m Spending a Lot of Money on This: Getting and Measuring Bang for Your Buck Through Leadership Coaching

We’ve spent the last few months here at The Point blog talking about Leadership Coaching. Posts have included a run down on what to look for in a coach, should you hire a coach, our coaching process, how to seek feedback, how to practice feedforward and how to address the most common coaching issues.

Does coaching work? 

According to scholarly research in an examination of coaching effectiveness on 370 coaching participants, coaching produced results equivalent from moving someone from the 50th  percentile to the 93rd percentile and which equates to being at least three times more effective than leadership training impact on performance.

Coaching is effective.

But it isn’t cheap.

So is it efficient?  In short, yes. The same scholarly article sites strong Return on Investment (ROI) in a different study that indicated the coaching to be worth 5.7 times the initial investment. This shows, spending money (on coaching) made the company 5.7 more money than what they spent on the coaching. You’ve got to spend money to make money, or so they say.

Coaching provides bang for the buck.

But will it work for you and give you bang for your buck?

Just because leadership or executive coaching has been cited to be both effective and efficient for certain organizations, how do you know if coaching will pay off for your organization or if it has if you’ve already engaged a leadership coach?

First, you hire a coach that measures the performance of their endeavors.

If you want a complete run down on how to evaluate coaching we suggest reading:

A Practical Guide to Evaluating Coaching: Translating State-of-the Art Techniques to the Real World(Peterson & Kraiger, 2004)

But, for the sake of your time here’s what we do and suggest (and many of these ideas come from the above reading):

1. Make sure your purpose is defined at the beginning so you can measure performance against that purpose.

2. To measure did it work? Gather individual data  (we use a 360° feedback tool) at the beginning of the engagement and then issue the same data gathering process at the end of the coaching engagement to see if improvements are present. Sometimes this can be too cumbersome or time consuming to administer the 360 again. If that is the case, pinpoint key areas cited for improvement and simply gauge these areas for improvement through a shorter survey.

3. To measure did it work? Measure success against goal attainment. Were the goals or learning objectives in the coaching achieved? This is simply a yes or no thing, and of course begs the question of goals needing to be set at the beginning of the process.

4. To measure did it work? Get the leaders of the leaders being coached to evaluate change in performance level before and after the coaching. Has desired performance level been achieved?

5. To measure did it work? Get the participants to provide feedback on the effectiveness of coaching by issuing a questionnaire to them. The article cited above has a good one that could be utilized.

6. To measure did I get bang for my buck?:  Look at individual results achieved during the coaching time period compared to the cost of the coaching (this is measuring ROI).

For example, at the individual level was the purpose of the coaching engagement to help someone improve their time management skills? If so, how much more efficient are they with their time and how much is their time worth? If they make $100,000 a year (considering a 40 hour work week which we know is probably on the short end of the time most leaders work each week), each hour of their time is worth almost $50.00.   If they improved efficient use of their time by an estimated 10%, then this efficiency gain equates to a value of $10,400 a year. Did the coaching cost more or less than this?  Let’s just say the coaching cost $5000.00. Well you just go a 100% return on your investment.

7.  To measure did I get bang for my buck? Look at results at the organizational level during and after the coaching engagement. Obviously, every organizational gain isn’t a direct result of coaching, other factors come into play, but this needs to be measured. For example, did sales, quality, production efficiency, etc. increase as a direct or indirect result of people who have been involved in the coaching?

Anything worth doing, which coaching should be worth doing, is worth doing right.  And the only way to know if it is done right is to evaluate effectiveness and efficiency.

Are you measure the results of your organizational initiatives such as leadership coaching? If so, how?


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Mary Ila Ward