Why are Coaches so Coy about ROI?
I just love this: “I don’t think ROI is ever going to be able to measure the true success of coaching, so we assess the value with qualitative data.”
That was Wendy Gabriel, manager of executive coaching at Deloitte & Touche, USA. She was commenting in a Harvard Business Review article back in 2004, aptly titled “The Wild West of Executive Coaching”. In it, authors Stratford Sherman and Alyssa Freas noted uneasily that annual spending on coaching in the US had hit an estimated US$1bn, while methods of measuring ROI were “questionable”
If I'd have been there I'd have said to Wendy: “Erm, why not?”
Because ROI can indeed be a measure of the true success of coaching. In fact, there is no other valid measure for coaching success if you're a business, and companies should not spend a penny on coaching unless ROI is guaranteed.
I wonder if Wendy would be saying the same thing eight years on, now that the corporate world is so much less rosy. Astonishingly, there's a good chance she would.
That's because the coaching world is still very coy about the actual hard benefit it brings to business. The 2011 ILM survey, “Creating a Coaching Culture”, found that while most organisations (93%) say they measure coaching outcomes, there's a lot of woolliness around this claim. Only two-fifths undertake “specific evaluation of coaching interventions”, while just under half (49%) assess coaching against business KPIs and goals.
“The mix of approaches suggests that linking coaching inputs to outcomes is not easy,” soothes the report's authors, “and that there is no established accepted mechanism for doing so at the moment.”
Balderdash! Statements like this let us off the hook. They make out that setting business ROI targets for coaching is at best a dark art. It isn't. It's logical and straightforward. Is it ‘easy’? Well, what in business today is easy? What I can say is that any FD worth their salt would be very keen to shine a light into the coaching cupboard and ask, “Actually, what are the outcomes? I mean the ones that would make sense to me?”
But coaches don't like discussions about ROI. The point of coaching, for coaches, is coaching. For coaches, the true success of coaching may or may not have anything to do with the true success of the business. In fact, the coaching establishment has got away with it so far because, when it works, coaching is popular; it generates lots of good feelings and buzz and back-slapping and positive comments on forms.
Hmmm… but it does cost a lot, doesn't it?
Here's an example of where a coaching intervention was measured on ROI and found worthy.
One of Birmingham City Council's directorates recently received a drubbing in its Audit Commission inspection and was ranked among the country's worst. Council leadership sat up, sharpish. They launched a thorough review and all 240 of the directorate's senior managers went through a painful 360-degree feedback and assessment process. The lowest performing received targeted skills training while the higher performing – 67 managers who seemed okay on paper – were offered coaching to ramp up their performance. The council did a lot of thinking about the specific outcomes they wanted and linked them to the directorate's goal, which could fairly have been expressed thus: “We very badly need a better score next time.” It then went looking, with strict criteria, for a coaching supplier.
Notion got the job and we delivered three, 3-hour Executive Coaching sessions with each of the 67 managers and provided intensive follow-up and reporting. It created an immediate buzz, loads of motivation, backslapping and behavioural changes. Former deniers, blamers and jobsworths got it, stepped up, and took responsibility. Everybody loved it and wrote lots of happy, qualitative data.
But what about ROI? What about the council's goal? Well, nine months later the Audit Commission came back with their clipboards and gave the unit a rating of “2-stars and rising”, ranking it one of the best in the country.
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