Coaching Benefits

Benefits of Working with an Executive Coach

Bottom-Line Results: Studies on coaching report an ROI of 5 to 7 times the initial investment.1 One reason this may be so high is that coaching can be customized to address individual needs, with week-to-week support and opportunities to integrate learning into real life work experiences. This is in contrast to training programs where the learning is forgotten in three months if it is not supported.

Examples from business impact studies of coaching:2

  • 28% of coaching clients in one study claimed they had learned enough to boost quantifiable job performance-whether in sales, productivity or profits-by $500,000 to $1 million.
  • In a study on executive coaching ROI, a large employer in the hospitality industry saved between $30 million and $60 million by coaching its top 200 executives.
  • One coaching firm reported that they saved their clients $100,000 by retaining two key executives, improved efficiency for account managers and improved sales in excess of $250,000, improved customer retention and satisfaction that resulted in savings of more than $100,000.

In a survey of 4000+ corporations on their involvement with corporate coaching3, the primary benefits of coaching reported are (in order):

  1. Improved individual performance
  2. Bottom line results (including profit)
  3. Client service and competitiveness
  4. Development of people for the next level, including confidence raising, skills and self empowerment, goal achievement, relationship improvements, and retention.

Individual Benefits: In a study of 100 executives from Fortune 1000 companies who received coaching for 6 months to one year4, the benefits to executives who received coaching were improved:

  • Working relationships with direct reports (reported by 77% of executives)
  • Working relationships with immediate supervisors (71%)
  • Teamwork (67%)
  • Working relationships with peers (63%)
  • Job satisfaction (61%)
  • Working relationships with clients (37%)

Organizational Benefits: In the same study of 100 executives, benefits to their companies included improvements in:

  • Productivity (reported by 53% of executives)
  • Organizational strength (48%)
  • Retaining executives who received coaching (32%)
  • Cost reductions (23%)
  • Bottom-line profitability (22%)

Clients who work with an experienced, professional Life or Business Coach report many benefits. A study conducted by the International Coach Federation reported what some of the benefits were:

The outcomes that clients most often attribute to their coaching are a higher level of self-awareness and self-confidence, a more balanced life, smarter goal-setting and lower stress levels.

Clients reported experiencing the following outcomes as a result of working with a coach:

  • Self-awareness: 67.6%
  • Setting better goals: 62.4%
  • More balanced life: 60.5%
  • Lower stress levels: 57.1%
  • Self-discovery: 52.9%
  • Self-confidence: 52.4%
  • Improvement in quality of life: 43.3%
  • Enhanced communication skills: 39.5%
  • Project completion: 35.7%
  • Health or fitness improvement: 33.8%
  • Better relationship w/ boss, co-workers: 33.3%
  • Better family relationship(s): 33.3%
  • Increased energy: 31.9%
  • More fun: 31.9%
  • More income: 25.7%
  • Stopped a bad habit: 25.7%
  • More free time: 22.9%
  • Increased profitability of business: 17.1%
  • Empowered employees: 11.0%

In general, the results of coaching most often cited in research studies include:
Improved performance (both individual and team)
Enhanced bottom line, including profit, quality, productivity, innovation, and other measures
Improved customer service and enhanced public perception
Professional development, including
Enhanced goal setting and attainment
Increased confidence and empowerment
Skills development, especially when coaching and training are combined
Leadership development
Preparedness for advancement
Enhanced balance and morale
Enhanced relationships
Improved retention of quality employees

Value of The Coaching Investment

A recent study cited in the prestigious Public Personnel Management Journal found a typical management training program increased the manager’s productivity by 22%, but when combined with 8-weeks of intensive Coaching, the manager’s productivity exploded to more than 85%.

A landslide of 98.5% of coaching clients said their investment in a coach was well worth the money.

70% of clients said their investment in a coach was very valuable.
28.5% said their investment was valuable.

In 2008, Morgan Executive Development Institute paired with Colorado State University to find, among other things, the Return On Investment (ROI) of coaching.  They found health care executives who had experienced executive coaching reported a ROI of 1031%. (Hutton D. (2010) Impact of executive coaching on ROI. Presented to the Catholic Health Conference, Clearwater, FL.)

In a Metrix Global LLC study for a Fortune 500 firm and Pyramid Resource Group found that “Coaching produced a 529% Return On Investment (ROI) and significant intangible benefits to business.  Including financial benefits from employee retention boosted the overall ROI to 788%.” (Coaching and coach training in the workplace. Industrial and Commercial Training, 36, 2/3, 2004.)

When asked for a conservative estimate of monetary payoff from the coaching they got…managers described an average return of more than $100,000, or about six times what the coaching had cost their companies. (Fortune, February 9, 2001)

Impact On Your Business

Olivero, Bane, and Kopelman found that management training alone increased productivity by 22%.  When executive coaching was used to supplement the training, productivity increased by 88%. (Executive coaching as a transfer of training tool:  Effects on productivity in a public agency.  Public Personnel Management, Winter, 126, 4, 1997, 461-469)

McGovern, Lindemann, Vergara, Murphy, Baker, and Warrenfeltz found that one hundred execs from Fortune 1000 companies who had received executive coaching reported improvements in the following:

  • Working relationships with direct reports (reported by 77%)
  • Working relationships with immediate supervisors (71%)
  • Teamwork (67%)
  • Working relationships with peers (63%)
  • Retention of execs who received coaching (23%)
  • Cost reductions (23%)
  • Bottom-line profitability (22%)

(Maximizing the impact of executive coaching: Behavioral change, organizational outcomes, and return on investment.  The Manchester Review, 6.1, 2001)

The objectivity that a coach brings to a developmental opportunity is helpful to mangers seeking to make difficult changes in attitudes, work habits, perspectives and interpersonal relationships (McCauley & Hugh-James; Young & Dixon, 1996.)

According to Personal Decisions International, a Minneapolis-based human resources consulting firm, 70% of the top 1,000 firms worldwide use some form of executive coaching (Source: HR.com, author Ann Vincola, President of a quality of life issues consulting firm, 2000)

What Business is Saying About Coaching

“In a 2004 survey by Right Management consultants, 86 percent of companies said they used coaching to sharpen skills of individuals who have been identified as future organizational leaders.”

— Excerpt from “What An Executive Coach Can Do For You” Harvard Business School.

“Business coaching is attracting America’s top CEOs because, put simply, business coaching works. In fact, when asked for a conservative estimate of monetary payoff from the coaching they got… managers described an average return of more than $100,000, or about six times what the coaching had cost their companies.”

— FORTUNE Magazine

“A coach may be the guardian angel you need to rev up your career.”

— MONEY Magazine

“Across corporate America, coaching sessions at many companies have become as routine for executives as budget forecasts and quota meetings.”

— INVESTORS BUSINESS DAILY

“Coaches are not for the meek. They’re for people who value unambiguous feedback. All coaches have one thing in common. It’s that they are ruthlessly results-oriented.”

— FAST COMPANY Magazine

“I absolutely believe that people, unless coached, never reach their full potential.”

— Bob Nardelli, CEO, Home Depot

“I never cease to be amazed at the power of the coaching process to draw out the skills or talent that was previously hidden within an individual, and which invariably finds a way to solve a problem previously thought unsolvable.”

— John Russell, Managing Director, Harley-Davidson Europe Ltd.

“.[A coach] is part advisor, part sounding board, part cheerleader, part manager and part strategist.”

— THE BUSINESS JOURNAL

“Many of the world’s most admired corporations, from GE to Goldman Sachs, invest in coaching. Annual spending on coaching in the U.S. Is estimated at roughly $1 billion”.

— HARVARD BUSINESS REVIEW, Nov. 2004

“[Executives should seek coaching] when they feel that a change in behavior-either for themselves or their team members-can make a significant difference in the long-term success of the organization.”

— Marshall Goldsmith, Fast Company columnist and one of Forbes’ five most respected executive coaches

“The goal of coaching is the goal of good management: that is – to make the most of an organization’s valuable resources.”

–HARVARD BUSINESS REVIEW

What the Research Shows

“The results tell us that corporations commonly identify their best and brightest and use coaching to turn them into more effective leaders. Coaches improve executive behaviors by pinpointing blind spots, altering management styles, and keeping careers on track.”

— Excerpt from Dynamics of Internal Corporate Coaching Survey Report, International Coach Federation 2004 Conference.

Executive Briefing: Case Study on the Return on Investment of Executive Coaching

Manchester Review

Coaching Effectiveness

Additional References:

1Source: Manchester, “Executive Coaching Yields Return on Investment of Almost Six Times Its Costs” , January 4, 2001. MetrixGlobal, “Executive Briefing: Case Study on The Return Investment of Executive Coaching,” November 2, 2001.

2Source: Chemistry Business magazine, “The Case for Executive Coaching,” November 2002 International Coach Federation and Linkage, Inc, “Analysis of the 1999 Survey on Coaching in Corporate America”, November 22, 1999

3International Coach Federation and Linkage, Inc, “Analysis of the 1999 Survey on Coaching in Corporate America”, November 22, 1999

4MetrixGlobal, “Executive Briefing: Case Study on The Return Investment of Executive Coaching,” November 2, 2001.