Coaching ROI for individuals & organisations

Executive coaching is a significant means by which organisations and individuals build executives’ capabilities. Very little research has investigated how effective or beneficial this development tool is to the individuals or the organisations in which they work (Bozer & Sarros, 2012, p.14).


The rapidly changing global economy that requires continuous improvement in order to adapt to the volatility of change has helped the emergence of executive coaching as a new management tool (Gyllensten & Palmer, 2007; Ozkan, 2008).


Despite the increase in demand of executive coaching, there have been only a handful of empirical studies on the effectiveness and benefit of executive coaching as a development tool to the individuals or the organisations in which they work (Bozer & Sarros, 2012). The failure to specify the impact of executive coaching is a critical limitation as executives hold major influence within organisations on the viability and the success of the organisations that they work for.


Research on executive coaching, while relatively a new field of endeavour, is only now beginning to build a wider evidence base about the impact of executive coaching on organisational and individual outcomes (Passmore & Gibbes, 2007). Research suggests that executive coaching can lead to improvements at the individual and unit-levels, with the majority of studies measuring individual outcomes. Overall, studies have consistently found a positive relationship between executive coaching and both executive effectiveness and job performance, based on multiple perspectives, including self, supervisor, subordinate, human resource brokers, and other stakeholders (Finn, 2007; McGovern et al., 2001; Olivero, Bane, & Kopelman, 1997; Passmore & Gibbes, 2007; Smither, et al., 2003; Thach, 2002).


Garvey (2010) suggests that within mentoring there are a number of benefits for both an individual (mentee/mentor) and an organisation (employer). In broad terms, these can be defined as:

For the mentee:

Improved performance and productivity

Career opportunity and advancement

Improved knowledge and skills

Greater confidence and wellbeing

For the mentor:

Improved performance

Greater satisfaction, loyalty and self-awareness

New knowledge and skills

Leadership development

For the organisation:

Staff retention and improved communication

Improved morale, motivation and relationships

Improved learning


As a professional coach-consultant, I believe that the contribution of coaching and mentoring to improve both individual and organisational strategic performance has to be assessed against the specific requirements of the organisation or individual client. Each client will have their own value assigned to the coaching practice, these may be intrinsic or extrinsic values such as money, reputation, customer satisfaction or employee satisfaction. Organisations, dependant on their size and type, whether they are accountable to shareholders, boards of executives or themselves will in turn have different strategic requirements.


The application of coaching and mentoring within organisations and the business environment is a relatively young field. Although the use of external coaching consultants is dramatically increasing, there is still little empirical research into the effectiveness on the performance and competence of the individuals and organisations involved (Leedham, 2005). A CIPD survey (2007) reported that more than 80% of organisations surveyed said that they measure or evaluate the results of coaching. Less than 3% reported using return on investment (ROI), and 8% use return on expectation (ROE) methods. Over 20% use measurements of key performance indicators (KPI’s) and the same number use ‘stories and testimony’ as a method of evaluation. A 2010 CIPD survey noted that only 36% of organisations questioned are conducting any form of coaching evaluation. The 2010 report suggests that it is difficult to evaluate the effects of such an abstract process such as coaching.

Phillips and Phillips (2007) suggest that ‘Value is not defined as a single number. Rather, its definition is composed of a variety of data points. Value must be balanced with quantities and qualitative data, as well as financial and non- financial perspectives.’

As a professional coach-consultant I believe that ROI and KPI assessments can be useful models that require adding to and tweaking for each organisation. The coaching and mentoring process should align with the business strategy. The evaluation methodology should be built into the coaching strategy from the beginning of the intervention. An array of useful metrics, including 360 feedback and performance appraisals should be employed to capture the ROI. A blend of ‘hard’ business measurements combined with ‘soft’ behavioural measures should be included.

A shared ownership of the intervention is required by all stakeholders throughout the organisation, this will aid the management of expectations and perceptions whilst allowing stakeholders to realise the value of effective coaching within a business environment.


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