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Question: Disillusionment with the current executive coaching process
Our company retained a leading executive coaching firm a couple of years back. We went through group coaching sessions during our annual strategy offsite. Subsequent to that, every executive in the company has had a budget for one-on-one coaching for himself or herself, and few high-potential managers in their teams.
I am the CFO of the company, and while I see some value in my individual sessions at a personal level, I have not seen any sense of ROI for the company.
Our financial results are no different (inspite of a huge new cash outflow to the coaching firm). The executives are just too busy to have regular sessions with their coaches, and most of them complain that they were told it would be easier than it really is.
How should we evaluate the success of this enagement objectively?
I have never seen a high rate of success when coaches are imposed on leaders collectively, whether they want them or not.
I also have not seen financial ROI data that would convince a skeptic of coaching that it is valuable. (There are studies, but skeptics are usually able to shoot holes in them.)
In our coaching work, we do not send a bill until the coaching is completed (6 to 12 months) and then, we only send it if the person being coached shows measurable improvement in overall leadership effectiveness, not in our opinion or in the opinion of the person being coached, but in the opinion of the stakeholders we involve in the initial assessment – direct reports, peers, others.
That means we are pretty careful in accepting clients who really want to change to avoid our spending a wasted year with them. We turn down a lot of requests.
Maybe you should take a break from coaching and reintroduce it later with a different model & a different coaching firm.
I have led group and organization-wide coaching programs and it's essential that there clear goals and objectives set at the beginning, otherwise you will likely spend a great deal of money without satisfactory results from a business point of view (some coaching organizations are set up specifically to penetrate a client company and to milk as much money as possible without feeling responsible for measurable outcomes).
Group coaching programs are tricky because there will always be the mix of personal and business issues that can arise, both at an individual and group level. These potential issues and how they should be handled really need to be discussed up front so that you the client understand what you will be getting for your investment and what the boundaries should be.
In order to evaluate the success of this enagement objectively, you have to go back to the starting point and the brief for the coaching company.
I agree with my colleagues that no coaching engagement without full participation can be effectively measured. What I perceive is that this event/experiment, has exposed a number of things about how the company functions that are worth examining. A short list might include:
What is in the culture that had the executives not have a clear communication of expectations regarding the nature of the engagement with their coach? ("they thought it would be easier than it really is")
What is in the culture that has the executives either be so busy that time to have a session is a challenge? or What is in the culture that has the executives hold the coaching in a lower priority and therefore have their executive development be held at a low priority?
What is in the leadership/culture that had clear measures for ROI not be established in the first place, and if they were, not communicated to the execs being coached, or the company supplying the coaching so that the ROI was left vague and unquantifiable?
And lastly, what is the opportunity for the company to grow/learn out of this engagement beyond simply trying to create a perceived but not experienced ROI?
As others have said, based on the information provided, it seems that the entire engagement got off to an unfortunate start. bottom line: a lack of sufficient perceived potential value by everyone involved. If they are truly a " leading executive coaching firm " then either we're not getting the whole picture or "leading" has more to do with marketing than skills as coaches.
First, no specific goals or outcomes were established as a context for the coaching. Each coachee ought to have identified some specific goals or outcomes for themselves (personal job-related objectives) around which the coach could be most helpful (goals that the person would be unlikely to achieve without the coaching). These individual goals, ought also to have been related to some larger organizational goals (again, stretch goals). And all of these goals, ought to be things that have such value to both the organization and the individuals, that they cannot NOT engage in the coaching.
Second: Because these goals are "stretch goals", the coaching is going to be more about the "stretch" than the goal. The real ROI is NOT in the achievement of the goal, but in the stretch, growth, and learning that is needed to be able to achieve this or any other goal. This kind of coaching (to me, the only kind of coaching worth investing in) is not easy for either the client or the coach.
So where to now? My suggestion is that you go back to your " leading executive coaching firm" and tell them exactly what you want and expect. If they balk, you walk and find another firm.
I agree with the CFO that there has to be a ROI benefit coming from coaching. I also agree with what Karl Grass and Thom Dennis said. I would like to add to this following things that the client needs to do, and the things that the coach has to do:
1. Wants to be coached and agrees to set objectives for the future he/she is committed to. Those can include ROI for the company
2.Actively participates in coaching session and prepares for the sessions and does not miss any unless there is an emergency. In other words the client has to lace those session on his/her calendar.
3. Agrees in advance to the total time needed to complete the coaching (I never coach for less than 6 months as no change can be made sooner)
4. Agrees contractually with the coach as to the financial and other requirements.
1.Supports the client in achieving his/her objectives by asking powerful questions and not giving advice
2.Creates a safe place for the client so he/she can share everything that needs to be shared to make the coaching successful
3. Commits to the time to spend with the client to achieve his/her objectives.
Obviously there is more to coaching than what I said. I would be happy to talk to the CFO and share more information.
I'll confess a bias here, since I don't even invoice clients who aren't delighted with the result they get (100% up to them), and make sure we've got a clear definition of ROI before either of us go ahead.
That said: coaching should always have an ROI, or it just ain't useful coaching. And I think many of us inadvertently put burdens on our clients, albeit with the intention of helping them, that make the process more cumbersome than it ought to be. (See Karen Phelan's "I'm Sorry I Broke Your Company: When Management Consultants are the Problem, Not the Solution" for great insight on this.)
Lots of good insights above. Note that getting a good result needs to be a mutual responsibility (one reason I turn down a many clients).
Previous answers gave you a great deal to reflect on, including the process for selecting a coach and setting your goals.
To the specifics of your request, "What should I expect to happen from the first interaction to the end…?" I add:
1. You complete preparation & self-assessment (as noted, coaches use various tools as part of your prep)
2. We conduct a two-hour intake, during which we establish the logistics of the relationship and deeply explore the goals you hold
3. We schedule ongoing Conversations, e.g. weekly or bi-weekly.
The general flow of those sessions (which will vary by client and need) will look like this:
~Check-in: What's happened since last session; what did you try or do, what worked/not, what did you learn, what reflections are you bringing today?
~Agenda: what is your focus for today? What do you want to accomplish or take away from this session? What is important about that right now?
~Coaching/Exploration of the topic
~Close: What are you taking away? What will you do or practice over the next week or two?
4. If part of your initial agreement, your coaching may include onsite work, e.g. shadowing you in your native habitat
5. At intervals, we pause to review progress & value, adjusting as needed.
6. Closure: Reflection on the value and learning from your coaching, how you will continue learning and progress, or anything that is important to declare as you wrap the relationship.
~~Your goals form the foundation for all conversations, and these may evolve as you discover/uncover more about yourself, so you may "re-contract" along the way.
~~The exploration in any single session is organic and based on where you are right now. Questions are a primary means of exploration.
~~My approach is ontological, so we work with your head, body, & emotional space, making it a more holistic experience -- and really, isn't that what Leadership is all about, the whole experience?
Ask the coaching company how they would suggest you measure the ROI on their services. If they can't answer that, find someone who can. For me, I have tied my compensation to the results of the companies that I work with, so measuring ROI is not only easy, it is something that I am really focussed on...
Your specific question is how to evaluate the success of this particular engagement. It sounds like you aren't seeing specific financial results that seem traceable to the coaching engagements.
What if you were to ask those who have been coached what they think they were able to accomplish thanks to the coaching that they wouldn't have been able to accomplish without the coaching? If they can point to things and it seems realistic, you can potentially calculate the added value due to coaching. If they can't point to anything, than perhaps you might ask why not? Was it not clear that the coaching was expected to help them deliver something that would lead to a positive ROI?
Going forward, you may have discovered the importance of aligning individual coaching goals to larger corporate financial goals. If the financial goals stretch an employee to the point where he or she feels a need for additional support (while not feeling so extreme that there is no point in trying), and if the coach seems like the right person to provide that support, then wouldn't your employees make the time to get that support? And, if they aren't making the time, perhaps that should be explored early on during the coaching engagement, as a sign that something needs to be tweaked.
Finally, if the offer of coaching was seen as something positive, whether or not it was actually used, might it have increased employee engagement and/or retention? I think that you can set the bar higher than that, but it might also be a direct or indirect benefit of your coaching program.
I believe that all of the coaches who have responded to this have made some very valid points. And ... I do believe that the ultimate success and ROI requires that very clear objectives be established and agreed upon between those wanting to bring coaching into the organization and the coach. What will overall success look like? What is the envisioned impact on the organization in terms of sales, leadership effectiveness, production, etc?
Secondly, the person at the top of the organization or a department must be fully engaged as their attitude toward the investment and the process itself sets the pace and tone that others will fall behind. All participants must understand what is expected of them in terms of their personal involvement and participation. Option as to believing one is too busy for their individual or even group coaching is off the table and the primary leader is the one that sets those rules of engagement and the example.
When these foundational things present, the likelihood of achieving the agreed upon objectives and the anticipated ROI are significantly maximized.
I expect that considering all of the answers you have received to your query, you will find certain elements that, had they been present in a clear and understood manner, may have made for a more successful venture. Coaching is an extremely method and approach to taking organizations to a higher level. I suggest and hope you might consider giving the approach another try making certain that all the ingredients that contribute to success are present.
So let me take a slightly different tack by saying that ROI is not a truly meaningful calculation for determining a coaching initiative's value. The relationship between changes in how people think, feel, believe, and behave – which is the stuff of coaching – and the changes that occur to a company's bottom line, is indirect, at best. There are just too many variables at play to assume that any one – even if it's coaching – is solely the reason. Attribution at that level of specificity is make-believe.
Consider other confounding variables in calculating the ROI of coaching.
Like time. Let's say that you calculate the ROI for a coaching engagement two weeks after it ends. Now let's say that 45 days later the executive coached initiates a major project that significantly improves next year's financial results. Is that impact likely to be attributed to the coaching? Probably not. Should it be, though? But what if it's 60 days later? 90? What if it's 3 years down the line? That sort of thing can happen when people think, feel, believe, and behave differently than they once did.
Or how about downstream impact? Let's say a sales executive (who received coaching) has what she thinks is an excellent conversation with a sales director and, lo and behold, revenues increase. Is it because of the coaching? Is it because one of the director's manager hired a stronger salesman because of a conversation with the sales director that resulted from a conversation the director had with the VP who was coached? Or maybe it was because the salesman just happened to contact a perfect prospect at the perfect time. Or that new Salesforce CRM system you installed. You have the financial deltas to calculate a Return, but what's the right Investment to attribute it to?
But before concluding that coaching provides NO 'capturable' benefit, let's look at a few independent, fact-based, methodologically-valid, research studies:
In 2009, Grant, Frith, & Burton conducted a randomized controlled trial (RCT) evaluating executives provided with 360-degree feedback and just four coaching sessions for over a ten week period. In doing so, they proved that coaching enhanced goal attainment, resilience, and workplace well-being and helped participants deal more effectively with organizational change. How much more? A statistically significant amount more.
In 2008, Spence, Cavanagh, & Grant (2008) conducted a RCT evaluating adults taking part in mindfulness-based health coaching over eight weeks. They proved that coaching enabled greater goal attainment than using an educative/directive format (which is how company's typically 'teach' their people). How much greater? A statistically significant greater amount.
In 2007, Spence & Grant conducted a RCT of adults participating in a Solution Focused/Cognitive Behavioral (SF/CB) life coaching program (not unlike the type of coaching that's typically part of an executive coaching initiative). In doing so, they proved that professional coaching was significantly more effective than peer coaching in increasing goal commitment, significantly more effective than peer coaching in goal attainment, and significantly more effective than peer coaching in environmental mastery.
And in 2006, Green, Oades & Grant conducted a RCT of adults taking part in SF/CB life coaching program that proved that coaching increased goal attainment, increased well-being, and increased hope – and that a 30-week follow-up found that those gains were maintained.
Is executive coaching expensive? Yes. Is it TOO expensive? I actually believe it is. But that's a separate issue.
As to the issue of how to evaluate the success of your engagement objectively? My answer is don't even try. Instead, I suggest that you hold the executives who've been through the process to a higher level of performance. Raise the bar for them, as it were – post-coaching – in whatever ways you feel will benefit the company best. And then see how they do. Let THAT be your litmus. And if you start seeing too little continued growth/performance across the board, you'll do well to factor in whatever things you typically factor when evaluating an executive's performance level...and consider cutting back on coaching, regardless of any ROI figures you might have calculated along the way.
Majority of the answers provided already have touched upon the importance of clarity in a coaching engagement. My assumption based on the information provided is outcomes, measures of success, and measurement methods were not discussed, agreed to, and executed.
From where you are now it is difficult though not impossible to measure ROI. It's a matter of getting input from key stakeholders and partnering with the coaching firm to determine what measurable change has occurred since beginning the coaching engagement. If your organization participates in engagement or organizational effectiveness surveys that could be one place to look. In addition, you may consider working with an analyst to explore correlations between business results and executive coaching within your organization.
A better solution, and probably a more exciting one, would be press pause, re-align, go back and determine what business outcomes your organization wants to achieve via executive coaching, determine the measures of success, and the methods you'll use to measure success. However, it sounds as if there might be more under the surface if the executives are skipping sessions and pushing back about executive coaching.
As everyone else has shared, executive coaching is a powerful tool for behavior change, strategy, leadership development and more. Generally the ROI is 500% or more of the investment.
I love all of the answers above but would add that there needs to be a specific pain point that needs addressing in order for any kind of support to be valuable. It may also be that coaching was not what was needed for the organization. I am a talent strategist and I develop strategies for my clients based on what their Zone of Genius is. I am very clear as to what pain points I can address and how quickly they can be solved. I have found that the right client is experiencing some pain point and knows that they need to operate in a different manner in order to solve it. Or they are clear on a goal that needs to be achieved and are open to creating a different strategy to achieve it.
Either way, if there is no ROI as a result of any kind of support I think that means that there is a mismatch in the client's needs and the type of service the coach or consultant is providing that needs to be explored. Start by asking yourself what your team's big pain points are. Have that conversation with your potential coach/consultant. If solving that pain point is not what they are best at then keep searching until the find the right match.
Hiring a leading coaching firm to provide coaching does not allow the individual being coached much leeway in the decision process. I say give the individual to be coached a budget for coaching. Allow them to find a compatible coach on their own. Hold them accountable for quarterly coaching assessment shared by their coach.
Coaching is a personal experience. Chances that a coaching firm is going to have great coaching matches are slim and good matches not so slim. If coaching is a requirement for advancement in the company let the employee decide how they want to handle it.
Coaching may not be the issue. The lack of individual compatible choice may be a bigger issue. A one stop shop maybe be an easy way to address a problem yet rarely provides quality outcomes.
Many of the preceding responses have excellent value - to add one more suggestion and question - what did you do to qualify and vet the coaches you used? What specifically made the "leading executive coaching firm" you refer to "leading"? The most pervasive problem in executive coaching is the huge variation in service quality and this in turn can be traced to the absence over at least the past 3 decades of even minimum requirements much less evidence of outstanding depth in business, psychology, coaching and ethics for coaches to satisfy. Maximizing your ROI on coaching starts with maximizing the quality of coaches you select. The first edition (2011) of the book 'Pinpointing Excellence' (www.pinpointingexcellence.com) may be helpful. Evidently its popularity is based on its simple purpose - to arm the consumer of coaching to be as discriminating and thorough as possible to obtain the best service and thus the highest ROI. A second edition comes out in 2014. I hope this is useful for you. Please spread the word and - as a consumer - set the quality bar as high as possible because the coaching field itself is too fragmented and disorganized to establish globally accepted standards of consumer protection and service quality.
Be it for individual or organization wide, positioning is the most important factor. If your executives perceive the coaching as mandatory or compliance based, many will always challenge it's value and the amount of time they can commit to the process. Each "coachee" must understand their own "why" for any level of success can be achieved. Echo Jim's comments about ROI.
The quest for leadership ROI has been around since the early 2000's. Knowing the pain points that led to engaging a coach should be part of the objectives (addressing them in measurable ways) and identifying the resulting organizational outcomes key.
It seems to me you have evaluated it and found it seriously wanting. Detailed written comments from your executives would surely give an "objective" evaluation you can use to sack the current coaching firm.
The next step is to evaluate, or get help evaluating what you want, what you really need, and the ways changes can be made given the amount of work your executives have to do and their sense of how much time they can give to change. That can be done by one person with expertise in resolving internal conflicts (which often amounts to coaching. mentoring, or working with managers and C-level executives) or in changing culture. Sometimes a procedure that only needs the expert to establish rapport and then spend an hour or so with the team of C-level executives can move matters forward tremendously.
Changing culture directly with one of the companies that do it collaboratively will work but it will likely take 1 to 3 years.
No matter what, the change you are seeking can't be done without some time and effort on the part of your team. It is key that they see that, and see that the time and effort they put in will bear fruit many-fold afterwards -- be a good ROI.