|
Why Invest in
Coaching?
The following
comments from a variety of business leaders and authors point up the soundness
of investing in coaching . . .
What is
Executive Coaching?
Executive coaches work with senior level executives
who have fiduciary responsibility to multiple stakeholders; stewardship of
human, financial, intellectual, capital and social resources; and economic,
social and environmental well-being of entire communities.
The
Executive Coach working with such individuals serves as strategic partner to
the executive leader and his/her team. The Executive Coach's skills include
business acumen and financial management, leadership and organizational skills,
analytic and innovative thinking as well as an ability to inspire trust and
commitment to action.
-- www.mscoaching.com
Accelerating
Growth of a Leader
"A good executive coach works with the natural style
of the leader, but then discovers their ambitions and fears," says John Hamm, a
venture partner at Redpoint Ventures, a Menlo Park-based VC firm. "CEO
coaching, in particular, is really about accelerating the natural growth curve
of a person who wants to be a leader."
Benefits of Executive Coaching
Executive coaching produced
a 529% return on investment and significant intangible benefits to the business
(including increased employee and customer satisfaction).
-- Case Study
on the Return on Investment of Executive Coaching, Dr. Merrill C. Anderson,
Metrix Global, LLC
Average ROI Six Times
Cost of Coaching
A recent study of Fortune 1000 companies that used
coaching with their executives realized improvements in productivity, quality,
organizational strength, customer service, and shareholder value. They received
fewer customer complaints, and were more likely to retain executives who had
been coached. In addition, a company's investment in providing coaching to its
executives realized an average return on investment (ROI) of almost six times
the cost of the coaching. - Business Wire, Jacksonville Florida, Jan. 4,
2001
Over 70 executives were coached in a global communications
organization in five countries. A survey of 43 participants showed that
executive coaching produced 529% ROI.
When employee retention was
included, the overall ROI shot to 788%.
Coaching was found to be a very
effective developmental tool for the leadership development participants,
producing financial and intangible benefits for the business. Decision-making,
team performance and the motivation of others were enhanced.
-- Merrill
Anderson; www.metrixglobal.net
Multiple Benefits from
Executive Coaching
"Among the benefits to companies that
provided coaching to executives were improvements in:
Productivity
(reported by 53% of executives)
Quality (48%)
Organizational strength
(48%)
Customer service (39%)
Reducing customer complaints (34%)
Retaining executives who received coaching (32%)
Cost reductions (23%)
Bottom-line profitability (22%)
-- From Manchester
Study
"Among 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%)
Conflict reduction (52%)
Organizational commitment (44%)
Working
relationships with clients (37%)
|
Size of the Executive Coaching
Industry:
-- Excerpted from Jeffrey Auerbach's
Seeing the Light:
What Organizations Need to Know About Executive
Coaching
www.executivecoachcollege.com
(This is copyrighted material and permission has
been granted to display on this website by the author, Jeffrey E. Auerbach. No
further reproduction or publication is permitted.)
|
The Umbrella of Management Consulting is a $62 Billion
Dollar Industry
The industry of executive coaching fits under the
umbrella of management consulting. Most management consulting firms assist
other firms in areas such as large-scale strategy, tax advising, IT assistance,
or supply chain management consultation; however, executive coaching is a
specialized service delivered on a smaller scale. Even though executive
coaching has grown considerably, and many organizations are now building a
"coaching culture" where they infuse a coaching philosophy with their
management and leadership style, the size of the executive coaching industry is
still a relatively small subset of the management consulting field.
--
Kennedy Information Research Group, 2001
|
Executive Coaching is a $1 Billion Dollar Industry
Little
reliable data is available on the size of the executive coaching industry, but
the Harvard Business Review reported that actual expenditures on executive
coaching worldwide is in the range of $1 billion.
-- Harvard Business
Review, 2004
|
Most Companies Use Coaches
70% to 88% of Companies report
they utilize coaching.
-- Chartered
Institute of Personnel and Development, 2005; and the Australian Institute of
Management -- Reported by Society of Human Resource Management Executive
Coaching Brief Reports
Eighty-eight percent of European companies report using coaching in some
manner and 70% of Australian companies report using executive coaching.
Moreover, a recent survey of 170 Human Resource professionals determined that
more than 50% set up a coaching program in the past 18 months (The Hay Group)
and a random survey of 248 Human Resource Managers demonstrated that 55% of
their organizations use formal coaching as an employee development method
(Society of Human Resource Management, 2005).
However, the term
"coaching" is used rather loosely. Managers state that part of their management
approach involves coaching their employees - usually for higher performance -
and in this sense, coaching is often seen as one of several people-management
methods. However, most internal or external executive coaching professionals
are characterized as not having any direct authority over the coaching client,
which helps the employee be more open with their coach and speeds learning and
results.
|
| Growth of Coaching in Organizations |
Dramatic increase in utilization of executive coaching in the past
five years as evidenced by:
|
 |
58% of
Respondents Say Coaching Utilization has Increased in Their Organizations in
the Past Year
|
|
95%
Say Coaching has Increased in Past Five Years
|
|
0% Say
Coaching Utilization has Declined in Past Five Years
|
|
The use of executive coaching is widely reported to be growing rapidly. Our
survey results bear this out. Ninety-five percent of organizations that use
coaching have increased their utilization of coaching over the past five years
and none of them have decreased their utilization of coaching. This impressive
finding suggests that organizations that have utilized coaching find it so
valuable that they continually increase its usage, even though executive
coaching can be an initially expensive service.
|
Why is the Use of Executive Coaching Increasing?
A 2004
study attributes these nine factors as the principle forces driving the
increasing use of executive coaching: |
1.
Rapidly evolving business environment
2. Individual responsibility for
development
3. Financial costs of poor performance
4. Popular
development strategy
5. Supports other learning
6. Employees request
coaching
7. Need for lifelong learning
8. Improves decision-making
9. Targeted, just-in-time development
-- Chartered Institute of
Personnel Development, 2004 |
|
|
|