“As long as there are human beings doing the work, businesses can profit by creating more fruitful relationships with them.” – Stratford Sherman and Alyssa Freas, Harvard Business Review, Dec. 2004
Many attempts have been made over the past decade to quantify return on investment of coaching programs for executives in organizations. Some spectacular results have been recorded.
Yet, even with the application of ROI standards commonly used for measuring training and development programs, there remain too many variables to establish reliable data. It is difficult to quantify data of a qualitative nature.
In 2003, Anthony M. Grant of the University of Sydney surveyed coaching research and found only 56 studies that met standards of reliable methodology. There were only 131 peer-reviewed studies since 1937. While the outcomes of coaching programs appear to be positive, the quality of research on coaching is extremely poor. There are new studies being conducted currently by academics, but it may be years before there are authoritative guides and best practices for coaching.
ROI may never become a measure of the true success of coaching.
One must assess its value with qualitative data. Any time perceived value is used as a measure, the measurements are subjective and less reliable. It is difficult to implement and replicate a program where the outcomes are perceived as “good” or “very good.”
The marketplace is perhaps the most vocal proponent of the use of coaching for executives for leadership development. Top corporations such as GE, IBM, Hewlett-Packard, JP Morgan Chase, and Goldman Sachs are among those that invest heavily in hiring coaches for their executives. Overall, annual spending on coaching in the U.S. is roughly estimated at $1 billion.
Other companies with smaller budgets are wise to follow this trend. Successful companies don’t throw money at programs that don’t have a positive impact on their bottom line—or, at least, they don’t for very long. Even so, there are some concerns about how much coaching adds to the financial success of the organization.
Improving an executive’s well-being can certainly contribute to improving his or her interpersonal skills...and...hence the productivity of the team, department, business unit, division or enterprise.