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Return on Investment in Coaching: “But Will It Make Us More Money?”

Guest post by: Carol Wilson

Article Overview: Coaching is now widely recognised as a means of increasing employee motivation, retention and engagement, and that these will contribute to bigger profits or (in the case of state organisations) better budget management. But it is a fact that many L&D executives and suppliers have to find ways of justifying the spend in terms of concrete results. Corporate culture expert Carol Wilson looks at methods and tools for measuring the return on coaching programmes from the beginning to the end of the project, and tying that return into hard figures.

Return on Investment in Coaching: “But Will It Make Us More Money?”

Coaching the ROI

In a coaching approach, we always start out by looking at where we want to get to before we set off. So the first place to start is by finding out whether the stakeholders themselves know exactly what results they are looking for. The very first meeting or conversation is an excellent time to do some informal coaching on this; using the GROW model.

Goal - What do you want?

Reality - What's happening now?

Options - What could you do?

Will - What will you do?

The following questions might be useful, modified slightly depending on whether you are a supplier or internal HR executive:

Goal

What results do you want?

Over what time period?

How will you measure the changes?

Reality

What resources do you have/need?

What are the challenges?

What budgets are available?

Who are the stakeholders?

Options

What interventions will achieve this?

Which are possible within the budgets?

Who needs to be involved?

Will (Action)

What can you commit to?

By when?

What needs to happen first?

Once everyone is clear on what is to be achieved, it is possible to work back from that to put a measurement plan in place. It is a good idea, as in all good coaching exchanges, to begin by asking the stakeholders for their own solutions. They may well have measurement wholly or partially catered for.

Surveys

Most organisations run regular surveys with their workforce, whether about ‘soft' items like satisfaction and motivation, or ‘hard' facts like absentee rates, target-meeting and turnover:

QUANTITATIVE

Staying on budget

Retention rates

Absentee rates

Sales figures

QUALITATIVE

Reduced stress

Engagement

Leadership

Motivation

Some of these may be adapted to measure the benefits of coaching. A useful question to add is:

"What difference is due solely to the coaching programme?"

Otherwise you might find that when you point out gleefully that more targets were met than usual during the quarter the coaching programme ran, the reply might be that a sales training was running at the same time, so how much of the change was down to that?

Probe into the answers, like a good coach, to get specific descriptions and, where possible, try to get the comments translated into figures.

• How much?

• How many?

• What percentage?

You can suggest culture measurement surveys, and a highly useful one here is Richard Barrett's Cultural Transformation Tools survey at the Values Centre website, which was explored in an earlier article in this series.

These surveys can be run on line, and the basic format is to provide the participants with 30 or so pre-set values such as those pictured below, which include limiting values as well as positive ones, and to which they can add their own if required:

Efficiency (yes) humour power

self belief bullying (yes) integrity (yes)

vision openness hierarchy

Then they can tick off values according to the following questions:

• What are your top ten personal values?

• What values does your organisation exhibit?

• What values would you like your organisation to exhibit?

When conducted across sufficient numbers of employees, such surveys can show up trends. For example, if large numbers complain of confusion or bullying, a survey can be designed to work out what these are costing the business. The participants will estimate what percentage of say, turnover, is being lost as a result of the limiting value. Taking the previous year's turnover, this percentage can be translated into a figure. A result like the one below, although not statistically accurate, will be enough of an indication to attract the attention of the most materialistic procurement officer:What percentage of turnover is lost through:

Bureaucracy -£ 1,799,618

Confusion -£ 3,178,636

Empire building -£ 1,764,682

Information hoarding -£ 624,327

Hierarchy -£ 834,225

Bullying -£ 3,480,818

Total (potential business value) -£11,682,306

Annual turnover £33,000,000

Feedback

A key contribution to measurement can be made during the coaching programme through collecting feedback both on paper and verbally. Feedback forms can be filled in at the end of every day's training, providing an excellent basis for a report at the end of the programme. If the participants agree, they can be quoted by name, which carries a great deal of weight if they are senior in the organisation in terms of justifying the spend and encouraging other staff to participate in future training.

Some sample questions which might appear on a feedback form are:

• What are the 3 key benefits you have gained?
• Where will you use them in your work?
• What tangible benefits have there been for you?
• What intangible benefits have there been?
• What are the tangible benefits for the organisation?

Verbal feedback can be collected and turned into a report as well. Every time a coach hears a coachee say that the coachee has achieved something extra due to the coaching programme, the coach can draw out the benefits, compile them into a report at the end of the coaching series and present them to the powers that be (provided the coachee agrees).

Research

Another effective way of convincing organisations about the value of coaching is to present research. For example, the table below was compiled by US company Innovest:

The iceberg balance sheet

Tangible Drivers

Financial Capital

Intangible Drivers

Cultural Capital

Structural Capital

Intellectual Capital

Social Capital

Community Capital

Societal Capital

Intangible value drivers represent 60% - 85% of a Company's Market Value.

Source: INNOVEST Investment Research

The research shows that whereas an organisation's worth might be expected to be gauged through inspecting its financial records, such as profits and share price, 60-85% of its true value resides in the Cultural Capital - intangible drivers like relationships, communication, retaining knowledge and skill, behaviour within the company and to the external community, and sustainability etc.

An example of an organisation which recognises the value of intangible drivers is Virgin, and this quote was taken from its website last year:

"if we look after our people well they willlook after our customers better and shareholders will benefit in the long term" Sir Richard Branson

In most organisations the opposite attitude prevails: shareholders come first, then customers, and then the staff if there is anything left over.

Conclusion

There is no quick fix for measuring coaching, but it is possible to produce significant evidence of improvement, both qualitative and quantitative, through a combination of coaching, surveys, feedback and research.

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Article Tags: budgets, eality, first meeting, hr executive, interventions, measurement plan, motivation, oal, organisations, own solutions, retention rates, satisfaction, span style, stakeholders, style text, target, text decoration, time period, turnover, workforce



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