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Coaching Counts

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									Coaching Counts
         Research report 2007
Foreword
By Sarah Chiumento, Chief Executive, Chiumento
Our research reveals that organisations in the UK are failing to get the most
from coaching, despite a willingness to invest significantly in this leading people
development tool. In particular, organisations’ reluctance to measure the bottom
line impact of coaching is a key cause for concern rendering them unable to prove
a clear return on their investment.
With Coaching Counts, conducted in conjunction with Personnel Today,
we set out to explore the use of coaching in UK organisations. It is clear
that organisations recognise coaching as a powerful tool to boost individual
performance and leadership effectiveness. A lack of industry regulation however,
has fostered some negative perceptions of coaching that must be challenged if the
industry is to flourish and organisations are to reap the benefits.
Undoubtedly, regulating such a diverse and dynamic industry is a tough call but
if organisations and practitioners work together to set standards and monitor
activity, they will both benefit. Furthermore, decision-makers who are buying
coaching have a responsibility to ensure coaching suppliers have the appropriate
experience and qualifications. Organisations that view measurement of their
investment in coaching and regulation of the industry as “just too difficult”, are
potentially squandering their talent development budget. Individuals who believe
that anecdotal measurement alone is sufficient may find their budget withdrawn,
impacting on the value that can be derived from coaching interventions.
Our research also reveals that many organisations expect managerial staff to
coach. While this approach can be cost-effective, managers need time set aside
to coach their teams, and the skills to coach successfully and confidently. Poor
coaching from inadequately trained managers can do more harm than good.
With an increasing focus on HR to provide evidence of value for money – HR
can ill-afford to neglect measurement as a way of demonstrating the impact of its
investments in development tools, especially coaching.



By Helen McCormick, Acting Features Editor, Personnel Today
Coaching has become a popular people development tool, with many
organisations upping their spending year on year. One of the more alarming
findings to emerge from the survey however, is that while they seem happy to
throw handsome amounts of money at coaching, worryingly few firms measure
the bottom line return on this investment. Measurement is widely felt to be
difficult, but greater efforts must be made if coaching is to be fully effective. With
HR increasingly expected to provide tangible evidence of the value for money of
all its decisions, the ROI in relation to coaching can no longer be ignored.



 About the research
 This research is based on responses from 497 companies with an average of 12,481 employees.
 The fieldwork was conducted in the week commencing 23 April 2007 by Reed Business Insight
 among Personnel Today’s readership.
     Key findings
     The most popular reason for                  Many respondents however, question          70 per cent of respondents say their
     organisations to invest in coaching is       regulation of the industry with more        organisation offers coaching.
     to improve individual performance            than two thirds believing there are         Of these, however, just 26 per cent
     Most organisations are spending              too many ‘cowboy’ operators                 offer coaching to everyone, while
     between £100,000 and £499,999                Worryingly, more than two thirds of         44 per cent only offer coaching
     a year on external coaching. And             organisations do not formally measure       to the senior teams
     this is increasing. More than half are       the return on investment (ROI)              55 per cent of organisations admit
     using more coaching than a year ago;         of coaching, many because they              that their approach to coaching
     55 per cent also anticipate levels of        feel it is hard to get more than            is ad-hoc.
     coaching to continue to increase over        anecdotal evidence
     the next 12 months




Exploring the findings
The state of play in the UK
The importance of coaching as a way of         Developing a strategy for coaching would     Does your organisation
improving performance is clearly gaining       help organisations truly maximise and        offer coaching?
recognition in British business.               harness the impact of coaching.              44%
An overwhelming 93 per cent of                 Of the various models used in coaching,                                 30%
organisations believe that coaching is now     three dominate the marketplace.
a leading development tool. And coaching       The most common is the GROW model
is increasingly prevalent in business:         (41 per cent), followed by solution
two-thirds of organisations (65 per cent)      focused coaching at 38 per cent and NLP                                 26%
have used coaching for the past five           at 19 per cent. This confirms that despite
years, while 12 per cent have offered it       the ever increasing number of coaching         No, my organisation does not offer coaching
to staff for more than 10 years. The vast      models emerging from sports, psychology,       Yes, only to certain job levels in the organisation
majority use coaching primarily as a tool to   academia and other areas, there is a           Yes, to everyone in the organisation
improve performance (77 per cent),             continued focus on using the tried
while 67 per cent use it to develop skills                                                  If yes, only to certain job levels
                                               and tested models that have been
and 63 per cent to train managers in                                                        in the organisation:
                                               practiced now for some years and
coaching skills.                               which deliver results.
                                                                                            Board level                          49%
                                                                                            Senior Management                    75%
The responsibility for buying coaching         The majority of organisations use both       Other managerial                     54%
tends to lie with the HR department            internal and external coaches, although      Other                                19%
(56 per cent). Forty-four per cent say         two out of 10 solely rely on line managers
that it is part of a strategic approach        to coach teams and 16 per cent use only
to how they develop their people.              external coaches.
Forty one per cent however, admit that
it is left to line managers, which indicates   Does your organisation employ internal and/or external coaches?
that a substantial number of organisations            1%     10%
are not taking a planned, strategic
approach to their investment in coaching.                            19%                       Internal coaches only (coaching staff
                                                                                               employed by organisation)
So it is unsurprising that the majority                                                        Internal coaches only (line managers
                                                                                               act as coaches)
(55 per cent) of organisations say their
                                                                                               External coaches only
approach to coaching is ad-hoc – that is
                                                                                               Both internal and external coaches
to say bought reactively rather than as                              16%
                                                                                               (1%) Don’t know
part of a planned development strategy.        53%
The benefits of coaching
Encouragingly, 96 per cent of organisations   Why do organisations invest in coaching?
claim to have seen individual performance
                                              To improve individual performance                        83%                                    17%
improve since coaching was introduced.
                                              To improve leadership/management effectiveness           81%                                    17%
Nearly as many (92 per cent) have also
                                              To aid personal development                              66%                                    32%
seen improvements to leadership
and management effectiveness.                 To improve productivity of the organisation              61%                               34%
Of these, 45 per cent and 39 per cent         To support individual career progression                 45%                               47%
respectively have seen significant or         To improve employee engagement                           40%                           48%
major improvements.                           To improve staff retention                               29%                         52%
                                                                                                                              0                20          40    60   80   100
                                              To improve emotional intelligence                        22%                    51%
When the public and private sectors are                                                            0              20         40             60            80    100
                                                                                                   0         20        40     60         80         100
compared however, there is a marked
                                                                                                         Agree strongly              Agree slightly
difference between the two. The public
sector trails behind the private sector on
all benefits since introducing coaching.
                                               Regulation, regulation, regulation
This is despite spending more money
overall on coaching than the private           Concerns about regulation and                       mentoring in Europe. These standards
sector, and despite 60 per cent of public      accreditation have encouraged some                  are proving to be of practical value to
sector organisations now using more            negative perceptions about the coaching             organisations, training providers and
coaching than a year ago. The public           industry. Worryingly, 69 per cent of                practitioners in identifying what ‘good
sector also anticipates its use of coaching    respondents believe that there are too              coaching’ looks like”.
will rise over the next 12 months.             many cowboys in the coaching industry.
                                                                                                   With no one awarding body for coaching
                                               An overwhelming 83 per cent believe                 qualifications however, standards can,
                                               the industry would benefit from more
                                                                                                   and do, vary considerably. There is also
                                               regulation so it is encouraging to see that
                                                                                                   no governing body for coaches, and
                                               some coaching organisations such as the
                                                                                                   none is planned in the foreseeable
                                               European Mentoring & Coaching Council
                                                                                                   future. Clearly, there are coaches in the
                                               (EMCC) are making inroads here.
                                                                                                   marketplace who may not have sufficient
                                               The EMCC’s Chair of European Standards
                                                                                                   experience and/or training, nor relevant
                                               Committee, Marina Dieck explains,
                                               “Through collaboration and research the             knowledge. This is borne out by the
                                               EMCC has developed a set of standards               finding that three-quarters of
                                               and competencies to work towards                    respondents believe it is difficult to
                                               establishing excellence in coaching and             find high-quality coaches.

                                              What improvements have occurred in organisations
                                              since coaching was introduced?
                                              Improved individual performance                          45%                                51%
                                              Improved personal development                            39%                               55%
                                              Improved leadership/management effectiveness             36%                               56%
                                              Improved support for individual career progression       26%                          59%
                                              Improved productivity of the organisation                23%                          62%
                                              Improved employee engagement                             18%                         61%
                                              Improved emotional intelligence                          12%                   55%
                                                                                                                              0               20          40     60   80   100
                                              Improved staff retention                                 10%                  52%
                                                                                                   0
                                                                                                   0         20
                                                                                                                  20   40
                                                                                                                             40
                                                                                                                              60         80
                                                                                                                                              60    100
                                                                                                                                                          80    100

                                                                                                         Agree strongly              Agree slightly
Who’s coaching the coaches?                                                                    The cost of coaching
The most common factor for choosing               organisations when choosing a coach          While 41 per cent of organisations spend
an individual coach is their coaching             – and this could be one reason why           less than £50,000 a year on coaching,
experience – nearly eight out of                  our results suggest that 69 per cent of      44 per cent spend between £100,000
10 respondents claim to take this into            organisations question the quality           to £499,999, rising to 51 per cent
consideration. Only 17 per cent believe           of their coaching providers.                 of organisations in the public sector.
that supervision should be taken into             The top factor when choosing a coaching      The average spend on coaching by
account when making a decision, yet               supplier rather than an individual coach     organisations is £83,250. It is clear that
supervision is a crucial factor in ensuring       is the quality of coaches, cited by 71 per   coaching represents a significant amount of
good practice in coaching and to act              cent as the reason behind a decision.        an organisation’s budget. The majority of
as a release valve for coaches dealing            This is followed by recommendation           organisations’ coaching budgets are spent
with difficult yet confidential situations.       (49 per cent) and price (48 per cent).       on one-on-one executive coaching.
Supervision may also become a central             Clearly, the power of word of mouth          HR is most likely to control the coaching
method of regulating coaching. As the             in the decision-making process should        budget in an organisation, but two out
CIPD’s Coaching Supervision (2006)                not be ignored, but in the absence of        of 10 line managers have the final say -
report states, if you fail “to provide            recommendation serious review of             another indicator of the ad hoc nature of
supervision for internal coaches and              supervision and qualifications is a must.    coaching in many organisations.
manager coaches, the sustainability and
                                                                                               The consequence can be a variety of
return on investment of your coaching
                                                                                               coaches and inconsistent standards
initiative is in jeopardy.” So it is concerning
                                                                                               – which in turn limits the opportunity to
that this is overlooked by so many
                                                                                               measure the value of coaching.
The ROI of coaching
Just under half (44 per cent) believe it       ROI is participant feedback (80 per              Is ROI of coaching formally
is impossible to measure the ROI of            cent), a qualitative way of tracking             measured in your organisation?
coaching. This partly explains why a           investment. This suggests that even those
                                                                                                                     20%
significant 67 per cent of organisations do    organisations that do measure ROI of
not formally measure the return on their       coaching are not necessarily doing this
investment in coaching. This decreases         effectively. Achievement of a participant’s
                                                                                                                         13%
slightly for public sector organisations (64   objectives, arguably a more rigorous way
per cent). Yet, if coaching is not managed     of measuring ROI, is cited by only 59 per
properly, it has the potential to be a waste   cent. Surprisingly, slightly more than half of
of money. Coupled with the fact that over      respondents believe that it is impossible           67% said return on investment of
two-thirds of businesses believe there are     to get anything more than anecdotal                 coaching is not formally measured
too many cowboys in coaching, due to a         evidence about the effectiveness of                 within their organisations.
lack of industry regulation and confusion      coaching, which is perhaps why they
over accreditation, these findings pose        neglect to measure its ROI altogether.               Yes
some concerning questions about how                                                                 Don’t know
buyers can know what their organisation
                                                                                                    No
gets for its investment.
Only 13 per cent of respondents claim                                                           How is ROI of coaching measured?
they take the time to calculate what they                                                       Participant feedback                   80%
are actually getting for their money when                                                       Appraisal                              73%
they buy coaching services. The most                                                            Feedback forms from coaches            70%
popular method cited for measuring                                                              Employee engagement surveys            66%
                                                                                                Employee feedback                      61%
                                                                                                Achievement of objectives              59%
                                                                                                Improvement in work quality            50%
                                                                                                360 feedback                           48%
                                                                                                Employee retention                     45%
                                                                                                Productivity                           45%
                                                                                                Anecdotal evidence                     41%
                                                                                                Use of coaching goals                  39%
                                                                                                Impact on bottom line                  34%
                                                                                                External indicators                    32%
                                                                                                Customer feedback                      25%
                                                                                                Money saved on recruitment costs       25%
It’s not all bad news. Chiumento advises taking a few simple steps
to demonstrate the value of coaching in your organisation.

Top tips
  Ensure that you discuss and agree the    Try to develop some measures so               Create a coaching budget and track
  outcomes you want from coaching at       that you know it when you see it!             the costs and hours of coaching against
  the outset with the coach, coachee       For example if the outcome for the            it and the arrangements you have with
  and their manager or sponsor - the       coachee is ‘more confidence in the            each coach. Manage the coaches in
  person who has oversight for the         board room’ you might want to see             your organisation and be clear about
  coaching assignment. This could be       them speaking up more frequently,             those that deliver quality and those
  someone from the HR department or        voicing their opinions more often,            that don’t
  a line manager                           more conviction in what they say and          Make coaching part of an integrated
  Make sure the outcomes are               fighting his or her corner                    approach to developing your
  realistic and specific enough to avoid   While protecting confidentiality              people – link it to other initiatives
  misunderstanding and they are            get feedback at regular intervals on          such as succession planning and
  genuinely relevant to the individual’s   progress. This can be gathered as part        performance management
  professional development and             of the coaching assignment from a             Involve business leaders in evaluating
  the business                             range of colleagues and other staff           the business impact of coaching.
  Record these outcomes as part of a       A mid way review with the coach and           Measures such as reduced staff
  ‘coaching contract’ so that you have a   coachee can be a very useful way of           turnover and better retention are a
  basis for determining what has been      focusing attention on what is different       good start but may well understate
  achieved. Review them at an end of       and it also allows for adjustment if          the real benefits to the business. For
  assignment review meeting with the       things are off track                          example tangible outcomes might be
  coach, coachee and sponsor                                                             better time to market or improved
                                                                                         forecasting. Both would have significant
                                                                                         measurable business impact.



Looking forward
  Set a strategy for coaching and get      When selecting coaches, ask about the         Price will undoubtedly influence the
  buy-in from the senior team. Don’t       results the coach has achieved in the         decision-making process, but other
  just invest in coaching as a knee-jerk   past and the extent of their training.        factors such as quality are equally
  reaction when needed. It should be a     Get references and talk to people             important. Remember the saying –
  long-term people development tool        they have worked with. Consider               if you pay peanuts, you get monkeys.
  related to business needs                working with an organisation that has a       Regrettably there are cowboys out
  Position coaching as a positive          coordinated approach to coaching,             there who give the coaching industry
  intervention that is an investment       is clear about its measure of quality and     a bad name
  in development. Don’t allow it to        supervision provision and can help you        Involve the business leaders in
  become a remedial intervention only      identify the most appropriate measures        determining the measurement
  offered to those in the company          of the ROI for your particular needs          of coaching’s ROI, not just the
  whose performance is below par           and business                                  HR department.
  Establish if the coach is accredited.    If you expect line managers to deliver
  Are they a member of a body such as      coaching, give them proper training
  the International Coaching Federation    and the time and skills to do this.
  or the EMCC? Such memberships            Careful evaluation of the cost/benefit
  provide reassurance around the quality   of internal delivery helps identify if this
  and ethics of coaching                   is the best approach. Managers need to
                                           realise that delivering coaching can help
                                           them get the best out of their teams
                                                                                           TM2 Designed by www.efekt.net : Job No. 0460
Chiumento regularly undertakes research
on Human Resource issues. To access other
Chiumento research documents, go to
www.chiumento.co.uk/infospace




Chiumento London, 24 Park Square East, Regent’s Park, London NW1 4LH. Tel: 020 7224 3307
Email: info@chiumento.co.uk Website: www.chiumento.co.uk

								
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