How to assess the organizational impact of a coaching program.
A retrospective of the past decade reveals that within mainstream industries, there has been a marked uptick in both acceptance and usage of professional coaching, as well as an adoption of coaching skills. This dovetails with a notable shift in the way coaching is used, from addressing the ability gaps in lower performers to creating initiatives focused on accelerating leadership among C-suite executives and high potentials.
With this, increasing debate has emerged around best practices for measuring the impact of coaching both at the individual and organizational levels. Until recently, much of this conversation has focused on measuring one-to-one coaching engagements and their relationship to individual performance, attempting to draw parallels to larger implications for the company.
However, with the emergence of coaching proficiency among managers and senior leadership alike, how are we to assess the broader implications of coaching as a form of leadership development?
Best practices
When examined in the context of one-to-one interactions, as has been the case historically, substantial emphasis has been placed on return on investment. Yet, while estimates of coaching ROI range from 529 percent (as reported by MetrixGlobal) to as high as 689 percent (as reported by Booz Allen Hamilton), the correlation between the benefits of coaching for an individual employee and its broader implications for business impact is anything but a straight line.
As Jack J. Phillips, Patti P. Phillips, and Lisa Ann Edwards note in Measuring the Success of Coaching, "While ROI is the ultimate measure of profitability, basic accounting practice says that reporting the ROI metric alone is insufficient." To bolster the raw ROI calculation and effectively draw parallels between a coaching interaction and business impact, Phillips, Phillips, and Edwards point to several other key elements that must be in place to support the engagement itself, such as an evaluation framework, an ROI process model, operating standards and philosophy, and case applications and practices.
Organizations often seek to improve financial performance through individual coaching, but clearly defined financial metrics typically are not the direct focus of coaching relationships. Instead, the main focus of coaching is more commonly aimed at creating positive shifts in behavior. For the purposes of evaluation, though, it is important to ensure that these behavioral shifts are clear and measurable.
Several authors have outlined best practices in measuring the ROI of coaching. The underlying theme that emerges from a review of these best practices suggests that evaluation is not just about financial payback. With the clear focus on creating shifts in behavior, the coach should have the participant articulate what will be different as a result of coaching.
As Kevin Oubridge explains in "7 Steps to Measuring ROI in Coaching," statements such as, "I will consistently use open-ended, powerful questions to engage creative thinking among my teammates" and "My team will be communicating more regularly, consistently use meeting agendas, and capture agreements and accountabilities in writing" are all specific and measurable. It is also useful to help the participant quantify what this means in ways that are most relevant to her, such as in terms of time saved, reduced operational issues, or fewer communication errors to further narrow or define coaching objectives.
It is extremely helpful to assess coaching in relationship to larger business outcomes, and to tie those outcomes directly to a participant's key performance indicators (KPIs). Making note of how the KPIs will be affected can make the assessment of the coaching more relevant and valuable from the larger business perspective.
After outcomes are well defined between the participant and coach, and there is a clear correlation to KPIs when possible, it is vital to invite input, buy-in, and engagement from direct supervisors or managers. Often, this takes the form of a three-way conversation in which the coach and participant seek the manager's input. This is particularly beneficial in relation to how the outcomes connect with their business objectives.
With the initial KPIs in place, as a foundation, we suggest that best practices also include embedding both mid- and post-program reviews of the progress to further support the sustained buy-in of the supervisor. These reviews also provide a real-time assessment of what progress has been made and what, if any, realignment needs to occur.
Following the post-engagement review, capitalize on success by having the participant and manager identify progress against the agreed-upon measures. Such qualitative and quantitative data can lend credence to the impact of coaching within the organization.
Whenever possible, the coach should collect these measurements and share them with key stakeholders and sponsors who have a vested interest in the success of the coaching. This information can be used to evaluate where and how a coaching program most influences business outcomes while identifying areas where refinement is needed.
The story doesn't end there.
In our history of working for the Coaches Training Institute, we have been privy to the way the coaching paradigm has significantly affected individuals and groups among more than half of the Fortune 500. We have witnessed significant increase in the willingness of employers to sponsor the cost of coach training for our participants, many of whom are managers and leaders within their organizations.
Cultural shifts
Results from the 2016 International Coach Federation Global Coaching Study reveal that as many as 64 percent of managers and leaders using coaching methodologies are seeking programs accredited and approved by the International Coach Federation for their training. As organizations increasingly support their leaders securing professional coach training and applying coaching skills and methodologies in their leadership repertoire, they are forging a cultural shift in which leadership development is inherently valued and supported.
Although the impact of coaching on organizational culture demands further review, there is an upward trend indicating that more and more companies are actively taking steps to embed coaching within their cultures.
As a result, in the same way that coaching as a tool for accelerating leadership has supplanted the focus programming for underperformers, internal coaching programs and culturally tailored coach training programs are continuing to emerge as a new gold standard for corporate coaching. Not only can this be cost effective, but it also can enable organizations to infuse their programs with culturally relevant values while still aligning with coaching industry standards and best practices.
In these instances, the conversation has shifted away from the efficacy of one-to-one coaching programs to how this new approach to leadership evolves one's responsibilities to grow his colleagues and direct reports alike. It is at this intersection, between the effort to refine succinct coaching metrics that are applicable across diverse sectors and the nuanced alignment of specific industry or organizational needs, that coaching emerges as an indispensable dimension of leadership.
As the coaching industry becomes increasingly sophisticated in its evolution toward a fundamental dimension of leadership, transactional methods of value assessment only demonstrate a fraction of its cultural impact. Instead, new formulations of value that take into account the power of relationship within the leadership experience will need to emerge as the next generation of core indicators.
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