By Dave Busse, B.Ed., MBA, CEC, PCC
Two strategies to track down and nail ROI!
Believe it or not, there are tangible ways to measure the return on investment (ROI) with coach training in organizations. ROI is one of those show stopper conversations we all have with clients or key influencers, so finding that credible ROI measure is often a requirement to getting the coaching project going.
The two primary ways to measure ROI are through measuring specific business strategies and through story collecting.
There is a third group that believes that developing people is a given and they aren’t interested in measuring ROI. Staff development is just something that you should do. In their minds, any positive or negative change in organizational performance is related in part to the success or failure of their people development strategies. That being said we will leave the third group out of this discussion for now.
Method 1: Measuring Coaching ROI through Specific Metrics
ROI measures in coaching can be boiled down in most cases to a list of 8 frequently measured outcomes. Many, if not all of these outcomes, can also be positively or negatively affected by other factors or business decisions. It can be difficult to directly attribute changes to coaching when things like the economy changes or the market shifts.
However it is still a useful exercise to focus on as there are times when everything else appears to be consistent and you will see a change that is either exclusively or at least largely attributable to coaching.
8 Commonly Measured Outcomes of Coaching
- Improved retention
- Speed of Decision making
- Increased sales
- Reduced costs
- Decreased absenteeism
- Decreased time to market
- Fewer customer/employee complaints
- Leadership readiness
My favourite way to build an ROI strategy is when a client has decided to implement coaching to support a specific business strategy. I’ve detailed a couple of examples below.
Improving Leadership Readiness Through Coaching
A company we worked with was rapidly expanding and had a strong belief in building their own leaders. Prior to coach training, this was a case of what they referred to as “battlefield promotion,” basically if one person quit they promoted the next in line.
Opening a new store meant a lot of arm twisting to get enough people in place to staff an opening. The success of the company was often marred by painful staffing losses. Three years into the coaching initiative they were opening new stores with 7 to 12 qualified applicants for each opening.
Improving Retention and Customer Satisfaction through Coaching
In another company we worked with, the original intended outcome was an improvement in the ability to lead teams. However the eventual outcome was much more tangential, compared to what they eventually identified as the key metrics.
In this case, the client was able to find clear evidence of the impact of coaching in customer complaint reductions, significant improvements in their Net Promoter Scores (NPS) and reduced turnover during a relatively stable time in the economy and the market they were competing in.
Method 2: Measuring Coaching ROI through Story Collecting
The second group of companies looking to develop ROI measures are companies that started a coaching initiative and either have found the coaching is being used in a very different manner than they thought and therefore they have to rebuild their ROI strategy or they didn’t have a measure in place to start with.
In both cases, the strategy to find the best ROI lies in storytelling or more accurately story collecting. One of the pretty much universal effects of coaching is the passionate stories about the impact it has had both at work and at home.
The process is as simple as it sounds. Companies simply ask coaches or coachees to share their favorite stories about the impact of coaching.
The beauty of this approach is that the measures become quickly obvious. It might be a shift in sales at one center where non-directive coaching is happening versus another where they aren’t or a person who indicates they decided to stay rather than seek employment else where and then contributed a key idea or sale.
Proving the Effectiveness of Coaching
The most common barrier to finding useful ROI measures is the assumption that the measure needs to be specific to coaching.
We frequently get calls from leaders who are trying to champion a coaching strategy and have been asked the classic, “Can you prove that this Coaching Thing actually works?”
The person or team being asked to design the ROI strategy is often looking for something like a classic double blind scientific study. This is a very limited way of looking at most data in organizations and even where it can be applied the data is usually contaminated by a market shift or some other factor that appears to have affected the outcome.
To quote David Peterson, the Director of Coaching at Google (Speaking at the London ICF Conference) “We have an abundance of research that indicates coaching works…we have little evidence to indicate what in coaching actually makes it work.”
So breathe…and accept our limited ability to measure complex data and present the data you do have on existing metrics that are influenced by coaching strategies.
Coaching does not exist in isolation so finding the relevant existing metric and seeing if you can isolate or narrow the impact of the coaching is the more productive use of ROI metric development.
To wrap this up, the most useful strategy is to find the existing or common measures and then work to identify the magnitude of impact the coaching is having on that measure.
If you need help implementing and measuring a coaching strategy in your organization, contact us for a complimentary consultation.
We’d love to hear how your organization measures or plans to measure the impact of coaching.
About the Author
Dave Busse is a partner at Essential Impact, an award winning leadership coaching company. Along with his EI team, Dave has helped hundreds of companies in a wide variety of industries implement coaching for specific changes in organizational culture.
Free Leadership Resources
- Resources for Leaders, Coaches and Organizations
- Business Tips from Master Coaches
- Upcoming Training Opportunities