The ROI of Executive Coaching

What the heck is Executive Coaching anyway? Who is it for? How does it work? And what exactly is the ROI?
business man explaining with a whiteboard

The ROI of Frame of Mind Coaching™

Executive Coaching is a tricky beast. Why? Because it’s elusive and confusing.

What is the purpose of Executive Coaching? Is it designed for people who have challenges and need some kind of intervention and remediation in order to succeed in their career? Is it designed for top performers and leaders who are privileged enough to hire a personal advisor to assist with all aspects of their personal and professional growth?

What the heck is Executive Coaching anyway? Who is it for? How does it work? And what exactly is the ROI?

Who is Executive Coaching For?

I would start by lumping ‘Executives’ into 3 categories: C-suite leaders of large corporations, Entrepreneurs who run sizable companies ($5M — $750M in revenues) and the Senior Leaders that support them both.

Having coached individuals from all of these categories for the past 16 years, I have noticed that, as a general rule, they struggle in one or more of the following areas:

1. Isolation — These leaders often feel like they shoulder the burden of responsibility alone. While they are effective at delegation, they still feel like they are ultimately responsible for the success and failure of the company. They spend significant time ‘thinking’ or being worried about the challenges they face and find it difficult to really share this with others. This sense of responsibility is a heavy load to carry and leaves them feeling very isolated and alone.

2. Strained Relationships — This is perhaps the most common issue confronting the three categories of Executives — the feeling that others are not necessarily on the same page as they are. Communication can be difficult when results are slow to come, and they sense that other people don’t have the same sense of urgency, drive, or motivation. In addition, conversations can become heated and personal OR they can come to a grinding halt — creating a wall of silence that prevents progress from happening.

3. Chronic Dissatisfaction These kinds of leaders are driven and have massive goals to achieve. It’s not uncommon for them to define themselves according to their achievements. They get a high from each win, but the satisfaction doesn’t last. They are disappointed with the business’s growth rate and they feel like they should be much farther ahead than they are. They wonder what’s getting in the way. Is it the team? The strategy? Or perhaps it’s their own leadership?

4. Slippage — This is a term that I invented when I started noticing that the vast majority of my clients were letting important things “slip through the cracks” — things like their sleep, their exercise, their nutrition, uninterrupted time with their kids and spouse, time with friends, and time for rest and restoration. “I don’t have enough time” and “I have too much to do” is practically plastered on their foreheads — and is the cause for enormous stress and exhaustion.

roi of coaching

Do these struggles mean that remediation is necessary, or do these struggles represent the normal growing pains of leadership?

The truth is that it doesn’t matter.

Top performers are always looking to step up their game, and those who struggle are also looking for ways to perform with greater ease. In both cases, Executive Coaching is appropriate. The purpose of Executive Coaching is to help leaders maximize their potential and their performance, regardless of their existing accomplishments, by helping them identify and eliminate the unknown and self-imposed barriers to their performance.

The Importance of Data Collection in Coaching

In an ideal world, data collection is done by extracting a rich amount of information from the leader to truly understand how they think, feel, and behave across a wide variety of circumstances. This process allows a seasoned coach to quickly find patterns of thought and behavior that might be slowing the leader’s ability to reach the goals they set out. Journaling is a powerful way to collect data on a daily basis and, when combined with weekly coaching calls, executives walk away with an experience that helps them achieve progress quickly. Assessments are also useful in capturing valuable data to provide time-specific information and insight.

The Role of a Coach

Once relevant data is collected, the coach’s job is to begin crafting a picture of the leader in order to understand their behaviors, how those behaviors are triggered, and even predict how they might operate in different circumstances. A seasoned coach has the ability to pick up behavioral patterns quickly and is able fill in any information gaps by digging deep, probing, asking questions, and confirming hunches. The coach is then tasked with the mission of analyzing the data in order to identify thoughts, beliefs, perspectives and behaviors that are not in alignment with a leader’s goals and desired outcomes. Once these areas of misalignment are brought to the surface, coaching then takes place in order to help the leader find clarity, make decisions, and take action in a manner that more easily allows for goal attainment.

ROI of Coaching

But the real question is: What is the ROI of coaching? If it’s the job of a phenomenal coach to look for thoughts, beliefs, and perspectives that clash with a leader’s goals, it might seem that coaching is a very intangible experience. It might appear that the ROI, while potentially transformative for the leader, is still hard to pin down. Is the ROI of Executive Coaching something we can actually measure?

The truth is that the ROI can be measured in a number of ways:

  1. Through a change in emotions and behaviors given the same stimulus;
  2. Through anecdotal feedback received from key stakeholders;
  3. Through a change in Key Performance Indicators (KPI’s)

Let’s look at these 3 areas a little more closely:

1. Change in emotions and behaviors given the same stimulus

Here is a perfect example: At the beginning of coaching, Bob gets annoyed every time Jack goes off on a tangent during meetings. His response is to either tune out or rudely interrupt the discussion, creating a great deal of tension in the room. As a result of coaching, Bob begins to understand why Jack’s behavior sets him off and how his own beliefs make the experience far worse than it needs to be. Coaching helps him to truly define the outcomes he is looking for (including harmony in the room as opposed to tension) and how to behave in ways that allow him to enroll Jack in his purpose, enabling them to reach mutual goals. It’s important to understand that Jack never changes in this scenario — the only thing that changes is Bob’s awareness and thinking, leading him to experience Jack without so much annoyance and make far more effective choices when dealing with Jack.

2. Anecdotal feedback received from key stakeholders

One of the most rewarding kinds of results that coaching delivers is the overwhelmingly positive feedback that leaders receive from others without any prompting whatsoever. It’s not uncommon for leaders who get coached to hear things like, “Wow, you handled that so calmly, you were so confident and relaxed.” Or “That meeting was so much more effective than it has been in the past.” Or “I am amazed at how well you managed that client complaint and how easy it was for you to turn things around.”

They will also receive feedback about the impact they have on others: “Thank you for understanding.” Or “Thank you for helping me think this through.” And “Thank you for believing in me.” These are the types of comments that might go unnoticed in acknowledging the ROI of Executive Coaching because they are so subtle and often go uncaptured. At the end of the day, these kinds of remarks indicate that practical learning and true leadership development have taken place.

Relationships are often the most significantly impacted by effective coaching. It’s not uncommon for leaders to report a dramatic improvement in personal and professional relationships as result of learning to interpret and respond to things in a more positive and productive manner.

3. A change in Key Performance Indicators (KPI’s)

Tangible results are also measured as an outcome of Executive Coaching. Often, we see results related to increased revenues and profitability, productivity and output, and decreased turnover and sick leave.

Sometimes, we even have leaders who are willing to share their results in graph format. Here is an example of a leader, Chris Ng, VP of Finance at Circle of Care in Toronto, who decided to apply what he learned in coaching to his investment portfolio. He shares it with us below:

“One of my coaching goals was to improve my thinking as an investor. Talking through some of my tendencies during past economic crises, I was made aware of my negative habits. This awareness has allowed me to have a record year in 2020in the midst of a pandemic! The top line of the chart is my portfolio, the red dotted line is the S&P 500, and the blue line is the Canadian Index.”

While Executive Coaching may seem elusive, the truth is that the ROI is tremendously apparent when we take a closer look at these 3 key areas. Of course, there is an initial cost to Executive Coaching, but the cost is often a drop in the bucket in comparison to the long term impact.

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