"So?" asks the sponsor of your proposed coaching engagement,
"Can you show us the return on our coaching investment?" This
question is being asked with increasing frequency. With increasing
frequency, too, business coaches are answering, "Yes!"
A U.S.-based, internationally established, prosperous hotel
company, the Nations Hotel Company (NHC), sought to maintain and
improve its status in the highly competitive hospitality industry.
With hotels in 15 countries, 98 percent brand awareness worldwide,
and 72 percent customer satisfaction rating, NHC wanted to help
executives find ways to improve efficiency, customer satisfaction,
revenue growth, and retention of high-performing employees.
Challenged to execute this project, the Nations Hotel Learning
Organization (NHLO) developed a program, which included a formal,
structured coaching program called coaching for business impact
(CBI) as a pivotal component. NHC corporate executives wanted, as
part of the process, to see the actual ROI for the coaching
The NHLO first surveyed executives to identify learning needs and
to assess their willingness to be involved in coaching. Most of the
executives indicated that they would like to work with qualified
coaches to assist them through a variety of challenges and issues
and that this would be an efficient way to learn, apply, and
achieve results. The measurement and evaluation goal for the senior
executive team was to assess results for 25 executives, randomly
selected (if possible) from the participants in CBI. Following are
the 14 steps in the new coaching program from the beginning to the
ultimate outcomes. For the planned ROI analysis, step four was
critical; executives made a commitment to provide data on action
plans and questionnaires.
- Voluntary participation
- The need for coaching
- Commitment for data
- Roles and responsibility
- The match
- Orientation session
- The engagement
- Coaching sessions
- Goal setting
- Action planning
- Active learning
- Progress review
Although these steps are self-explanatory as to the coaching
process, the ROI process involved gathering throughout the coaching
engagement so that evaluation results could be reported for all
- Level 1: Reaction
- Level 2: Learning
- Level 3: Application
- Level 4: Business Impact
- Level 5: ROI.
To collect complete and reliable data for Levels 4 and 5,
executive-participants completed action plans that included
questions addressing the four business impact measures sought to be
- What is the unit of measure?
- What is the value (cost) of one unit in monetary terms?
- How did you arrive at this value?
- How much did the measure change during the evaluation period
- What other factors could have contributed to this improvement?
- What percent of this change was actually caused by this
coaching for business impact program?
- What level of confidence do you place on your estimate of the
change attributable to this program? (100 percent = Certainty and 0
percent = No Confidence)
Using the action plan responses and collecting data through
executive questionnaires, senior executive questionnaires, and
company records, the NHLO obtained information to convert data to
monetary values (items 1-4 above), to isolate the effects of the
coaching on this business impact data (items 5-6 above), and to
adjust for errors in estimation (item 7 above).
Careful data-collection planning allowed the NHLO team to measure
the results of the coaching program at all levels. Level 1:
Reaction, Level 2: Learning, and Level 3: Application all showed
positive results and comments.
Impact: To assess the business impact,
the NHLO team assimilated the information on the action plans for
the 22 CBI executive participants who responded. Using these
responses, the NHLO arrived at the total adjusted value of the
program's benefits as $1,861,158.
ROI: The fully loaded costs of the CBI
program included both the direct and indirect costs of coaching
(needs assessment and development, coaching fees, travel, time,
support, overhead, telecommunications, facilities, and evaluation).
CBI costs for 25 executives totaled $579,300.
Using the total monetary benefits ($1,861,158) and total cost of
the program ($579,800), the NHLO developed two ROI calculations.
First is the benefit-cost ratio (BCR), which is the ratio of the
monetary benefits divided by the costs, which equals 3.21.
This value suggests that for every dollar invested $3.21 was
returned. The ROI formula for investments in any human performance
intervention is calculated as it is for other types of investments:
earnings divided by investment. For this coaching solution, the ROI
was calculated thus:
ROI (%) =
|| 100 = 221%
For every dollar invested in the coaching program, the investment
dollar was returned and another $1.21 was generated. In this case,
the ROI exceeded the 25 percent target.
Intangibles: The NHLO chose not to
convert all measures to monetary values, creating a list of
intangible benefits: improved commitment, teamwork, job
satisfaction, customer service, and communication.
Credibility of data and of the ROI process itself is always
critical. The NHLO's sources of data (executives and company
records), conservative data-collection process, isolation of
program impact, adjustment for errors in estimates, use of only
first-year benefits in the analysis, fully loaded program costs,
and reporting of results at all levels made a convincing case for
the CBI program.
To communicate results to target audiences, the NHLO produced three
- a detailed impact study
- an eight-page executive summary
- a brief, five-page summary of the process and results.
To convey a clear understanding of the methodology, the
conservative process, and information generated at each level, the
NHLO team held meetings with the sponsor and other interested
senior executives. Conservative and credible processes and
competent communication led senior executives to decide that, with
a few minor adjustments in the program, they would continue to
offer the coaching for business impact program on a volunteer
basis. Pleased with the process and progress, they were delighted
to have data connecting coaching to the business impact.
This case study was previously published in the WABC eZine in