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ROI in coaching

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					Noble Manhattan Coaching Ltd



‘Europe's leader in the field of coaching, personal growth
              and corporate development’
"The goal of coaching is the goal of good management: to make the most
of an organization’s valuable resources.”
Harvard Business Review
                            Topics
Introduction
 What is ROI?
 Do we need to calculate ROI on Executive Coaching?
 Why is so important to do that?

International Findings & Case Studies
 Manchester Review (2001)
 Association for Coaching (2004)

2 Case Studies of Defining & Evaluating the Return:
 Executive Team Coaching – corporate company, Romania (2008)
1 to 1 Executive Coaching – CEO, Romania (2007)

5 Practical Ways to Deliver a 500% ROI Executive Coaching Program
ROI-proven Applications of Executive Coaching
Q&A
What is Return Of Investment
•   A performance measure used to evaluate the efficiency of
    an investment or to compare the efficiency of a number of different
    investments.
•   Return on investment is very popular because of its versatility and
    simplicity.
•   To calculate ROI, the benefit (return) of an investment is divided
    by the cost of the investment; the result is expressed as a
    percentage or a ratio.



           ROI = Gain of Investment – Cost of Investment / Cost of Investment
    Do we need to calculate ROI?
•   NO, concerning a life-coaching agreement. Too many
    incalculable variables.
•   NO, in the case of a business client without any form of
    internal or overall performance appraisals. Almost nothing
    to adapt for a ROI calculation.
•   YES, on every business-related issue in “1 on 1” coaching.
•   YES, on every team/corporate coaching contract.


“The Bottom Line: Coaching produced a 529% return on investment and significant
   intangible benefits to the business. The study provided powerful new insights into how
   to maximize the business impact from executive coaching.”

MetrixGlobal, LLC 2001
           Why is it so important?
•   Increases responsibility: fully engages
    the client.
•   Develops accountability: best
    decisions “money can buy”.
•   Creates an ongoing, clear coaching
    environment.
•   Establish a higher degree of trust.
•   Offers better control on process &
    outcomes.
•   Defines clearly the “out of the
    comfort zone” benefits.
•   Diffuses the (self) manipulative
    strategies.
•   Easier to sell: a history of ROI-related,
    powerful impact.
•   Re-selling & clients who bring clients.
International Findings (1)
 Manchester Review, 2001 – more than 300 companies

                    Delivered an average ROI of 5.7 times the initial
                        investment (a return of more than $100,000)
                    Executive productivity improvements (reported
                       by 53% of executives)
                    Organizational strength (48%)
                    Quality improvements (48%)
                    Customer service improvements (39%)
                    Retaining executives who received coaching
                       (32%)
                    Direct report and supervisor relationship
                       improvements (greater than 70%)
                    Teamwork (67%)
                    Working relationships with peers (63%)
                    Job satisfaction (52%)
        International Findings (2)
      Association For Coaching, 2004 – more than 600 companies (42
                               answered!)
•   Key fact: Purchasers of Coaching stated better
    people management skills resulted in 58% of
    coaching programs and increase job motivation
    in 53%. While coaches stated improved work
    life balance resulted in 48% of coaching
    programs and improved job motivation in
    42%.
•   Key fact: 48% of purchasers of coaching stated
    having a quantifiable measure of the ROI from
    coaching is important.
•   Key fact: In 72% of cases purchasers of coaching
    use coaches to develop individuals’ business
    performance.
•   Key fact: In the majority of cases coaches
    received between 4 and 7 Coaching sessions!
          Local Case Study (1)
           A. Executive Team Coaching - relevant data:


• The Team Coaching Program duration:10 months (6
  meetings).
• 12 people extended board team (central management &
  heads of production units).
• General profile: experienced senior managers (more than 10
  years in management positions), multicultural (3 different
  nationalities), high income (more than 100k euro per year).
• Non-individual, systemic approach during 5 assisted board
  meetings (plus 1 kick-off coaching program meeting).
• Average impact of board decisions: more than 1 mil. Euro per
  meeting.
• Estimated ROI (2 months after): 750%.
           Local Case Study (1)
                        B. Measurable criteria:


General time effectiveness in board meetings (up 78%)
Time effectiveness related to agreeing on a decision (up 66%)
Quantity of decisions per meeting (up 54%)
Quality of decisions taken (impact, sell-ability to peers, etc) (up 44%)
Information sharing and distribution (up 88%)
Managerial risks taken on new projects (both strategic & tactic) (down
   33%)
Degree of project/task delegation downwards (up 54%)
Group management skills and benefits (up 67%)
Stress and pressure level (down 54%)
Profit share increase based on assisted team’s decisions (up 2.5%)
           Local Case Study (2)
             A. One to one Executive Coaching Program

•   The Executive Coaching Program duration: 12 months (24
    meetings).
•   The client profile: CEO, late 40’s, English & German
    language, 5 years experience as CEO in 2 companies, more
    than 200k Euro income. Wife, 3 kids, 2 houses, 2 cars,
    passionate about leadership books and models, all-time
    traveler, strong tennis player (ouch!).
•   The coaching contract: developing broader strategic
    business perspective, building up a managerial team,
    defining & implementing a new brunch of the company.


•   Estimated ROI: 800%.
                Local Case Study (2)
                             B. Measurable results:



•   Leaving the office before 6 p.m. (80% attained)
•   Elaborating a 3 years P.D.P. for myself. (attained)
•   Stop upward delegation and confront all the manipulative “games”, as they
    appear. (90% attained)
•   “On the spot” strategic evaluation of executive decisions taken. (90%
    attained)
•   A minimal 3 options needed before any decision. (attained)
•   Building strong & supportive relations with direct reports (attained, 4 out of
    6)
•   Creating & implementing an “internal crisis cell” (attained, 5 crisis solved)
•   No papers on my desk! (attained, 2nd time)
      5 Ways to deliver a 500% ROI
       Executive Coaching Program
Establish the executive's accountabilities -
    what specific measurable desired results
    (not activities), are to be delivered to
    whom, and by when?
Establish the resources the executive will have
    at his/her disposal.
Forecast the likely results the executive is
    likely to produce: given history, and plans
    and projects in place (the most likely case
    & best case predictable outcomes).
Create a set of outcomes, beyond the most
    likely case, as the context for coaching.
    And outcomes, that if/when achieved
    would show an ROI of ...?
The set of outcomes will be expressed as a
    coaching plan: with milestones, tracking
    and reporting mechanisms.
           ROI-proven applications of
              Executive Coaching
•   Over 93% of leaders who have received coaching would
•   recommend it to others. The areas where coaching has been
•   most beneficial include:
•   Reducing executive isolation, facilitating increased feedback and growth, being a
    “sounding board” for new ideas
•   Moving out of the urgent tactical issues to hold a more strategic view
•   Building interpersonal skills and developing higher emotional intelligence
•   Supporting key personnel through change and shifts in culture
•   Increasing managerial effectiveness
•   Increasing productivity and time management
•   Stress reduction and adjusting work / life balance
•   Supporting executives in new positions
•   Talent retention
•   Building high performance teamwork
•   Bottom line profitability
 "We shall not cease from exploration,
and the end of all our exploring will be
      to arrive where we started
 and know the place for the first time."

                              (Gerard O'Donovan)

				
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