This executive briefing was excerpted from the final report of the study conducted at a Fortune 500 firm and is intended for the private use of MetrixGlobal clients and professional associates.

The Bottom Line: Coaching produced a 529% return on investment and significant intangible benefits to the business. Including the financial benefits from employee retention boosted the overall ROI to 788%. The study provided powerful new insights into how to maximize the business impact from executive coaching.

Introduction

A Fortune 500 firm launched an innovative leadership development effort that was expected to accelerate the development of next generation leaders. The participants in this effort were drawn mostly from the ranks of middle managers and from many different business units and functional areas. Leadership development activities included group mentoring, individual assessments and development planning, a leadership workshop and work on strategic business projects.

Coaching was considered to be a key enabler for this approach to leadership development because the participants could work privately and individually with his or her coach to develop specific leadership competencies. The client organization engaged the Pyramid Resource Group to provide coaching to the leadership development participants. While participants spoke very highly of their experience with coaching it was decided to conduct a formal assessment of the effectiveness and business impact of coaching. It is intended that the results from this study be used to determin.

• Manage the entire coaching process to ensure consistency and quality. Though the content of individual coaching sessions should always be confidential, the coaching process itself needs to be managed to ensure that the coaching clients and the coaches are following the appropriate process and leveraging best practices.
• Prepare clients in advance for coaching and don't force coaching on anyone. Because coaching remains a relatively new development technique, people may not understand how the coaching process can help them become better business professionals. The sooner they understand the process, the sooner they will see results.
• Offer clients the ability to select their coaches. Chemistry is important to build an effective coaching relationship. Provide prospective coaching clients with information about the coaches including biographies, education, coaching credentials, functional expertise, industry experience and other background information.
• Provide coaching strong organizational support. Those being coached should receive encouragement and support from their immediate managers. Also, coaching should be conducted in the context of other developmental efforts such as competency development, assessments, mentoring and leadership workshops.
• Ensure coaches are grounded in the company’s business and culture. Coaches are more effective when they can identify with and talk about the realities of their client's environment.
• Allow each coaching relationship to follow its own path. A major difference between coaching and training is that coaching allows the individual to determine what works best for him or her at a very personal level. Coaches need wide latitude to work with “the whole person” and help each client be more effective as a person as well as to be more effective as a business leader.
• Build performance measurement into the coaching process. Evaluation of coaching should be designed into the process from the beginning to better set performance expectations and open up new learning opportunities for making coaching more effective while the coaching is being conducted. For example, coaching can be refocused to deal with issues or to ensure that business priorities will be met. In this way, the evaluation of coaching becomes more than just a measuring stick – it becomes a structured approach to deepen the business value of coaching.

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