Summary of Research on the Efficacy of
MetrixGlobal Study: Case Study on the Return on Investment of Excutive Coaching, prepared by Merrill C. Anderson, Ph.D.
MetrixGlobal, LLC, November 2001
Description: MetrixGlobal conducted a case study on ROI of executive coaching. This study focused on leadership retention development and concluded that coaching is a very effective development tool, especially for decision making, team-performance and the motivation of others. It reports specific financial benefits as a result of coaching, especially related to productivity and to employee satisfaction.
Results: Executive Coaching produced an astounding 529% return on investment and significant intangible benefits to the business. Including the financial benefits from employee boosted the overall ROI to 788%.
Manchester Consulting Group Study: The Effectiveness of Executive Coaching What we Know from the Literature and Experience and Where We Should Go From Here.The Manchester Review, 2001, Vol. 6. Number 1. McGovern, J., Lindemann, M., Vergara, M., Murphy, S., Barker, L. & Warrenfeltz, R.
Description: The Manchester Consulting Group conducted a study designed to examine the effects executive coaching had on an organization’s profit and loss. Participants were 100 Northeastern and mid-Atlantic executives who completed coaching between 1996 and 2000.
Their coaching experiences consisted of involvement in customized coaching programs that were either change- or growth-oriented (remedial or developmental in our terms) or a combination of the two. The coaching programs ranged from six to twelve months in duration and were delivered by coaches who had either Ph.D. or MBA degrees and who had at least twenty years of organizational development or management experience and training in executive coaching.
The sample was balanced to include both genders, an age range from 30 to 59, and a mixture of races and executive income levels. Each executive was interviewed over the telephone by one of two independent contractors, who employed a standardized interview protocol.
During the interviews, executives provided a rating of their overall coaching satisfaction, described their coaching goals and indicated whether their goals had been met. Respondents were also asked to describe any new behaviors they developed and how often they engaged in these behaviors, and to identify aspects of the coaching they found to be effective or ineffective.
Executives also estimated financial gains to the business and any tangible and intangible benefits of the coaching. Whenever possible, the executive’s boss or a sponsor from human resources was also interviewed. Executives established their own calculation methods for determining their subjective estimate of the financial impact of the return on investment (ROI) of the coaching investment on their businesses.
They were then asked to rate their confidence in this number. To eliminate outliers and ensure that estimates were more conservative than liberal, the researchers set an upper estimate of $1 million. The researchers also made adjustments in their attempt to assure that the ROI was the result of coaching and not other factors.
Results: A nine-month, $18,000 executive coaching program investment for a VP, was given a rating of being worth six times that at $108,000.
Regarding the overall satisfaction of the coaching process (McGovern et al., 2001), 86% of executives and (74% of stakeholders reported being “very satisfied” or “extremely satisfied.”
Learning was categorized into competencies that executives expected to gain as a result of coaching: enhanced leadership skills 14%, enhanced management skills 18%, increased business agility and credibility 15%, better interpersonal skills 35%, and fostering personal growth 12%.
Organizational outcomes reported by respondents in this study were positive but not overwhelming.
Concerning tangible benefits, 51% reported increased productivity; 48%, increased work quality 48% increased organizational strength; 39% improved customer service; 34%, reduced complaints; 32%,cost reductions; 22%,increased bottom-line profitability; 14% increased top-line revenue; 12% decreased turnover; and 7% reported other positive business effects.
The reported intangible benefits were much stronger with 77%of the executives reporting improved relationships with direct reports, 71% improved relationships with stakeholders; 67%, improved teamwork; 63% improved relationships with peers; 61% improved job satisfaction, 52% reduced conflict; and 44% reported increased organizational commitment.
Kobarkaran Study: Executive Coaching It Works! Kombarakaran, F. A., Yang, J. A., Baker, M. N., & Fernandes, P. B. (2008). Consulting Psychology Journal, 60, 78-90
Description: 114 coaching participants report on results they attributed to their coaching experiences.
Results: 81% reported measurable results; 73% saw it as providing a good return on investment.
Top areas of improvement: >90% of participants reported increases in insight into others, managing direct reports, influencing, conflict management, giving feedback, and leadership style).
79% reported improvement in relationships with mangers, 88% reported improvement in goal setting and prioritization.
88% reported improvement in their ability to define performance goals, 76% reported increased insight into the business drivers of decisions,
78% reported increases in both engagement and productivity in personal and work related activity, 68% reported improved communications with their colleagues.
Public Agency Study: Executive Coaching as a Transfer of Training Tool: Effects on Productivity in a Public Agency Public Personnel Management Volume 26, No. 4. Winter 1997
Description: Thirty-one managers underwent a conventional managerial training program, which was followed by eight weeks of one-on-one executive coaching focused on enhancing management competencies. The coaching included: goal setting, collaborative problem solving, practice, feedback supervisory involvement, evaluation of end-results, and a public presentation. The authors believed that the goal-setting process was effective in enhancing self-efficacy in the participants. The coach and the person being coached worked together to define concrete actions (goals) that the coachee would undertake.
Results:Coaching increased productivity increased by 88% compared with a 22.4 percent increase in productivity when participants only received training without coaching.
De Meuse Study: Evaluating the effectiveness of executive coaching: Beyond ROI? De Meuse K. P., Dai, G., & Lee, R. J. (2010). International Journal of Theory, Research, and Practice.
Description: An evaluation of executive coaching effectiveness
Results: 75-95% of coaching participants are positive about their executive coaching experience.
Bersin Study: High-impact talent management: Trends, best practices and industry solutions. Bersin, J. (2007). Oakland, CA: Bersin & Associates
Description: An analysis of 62 different talent management practices in 760 organizations.
Results: Coaching programs had the most successful impact of all types of efforts to develop management and leadership effectiveness.
Thach Study: The impact of executive coaching and 360 feedback on leadership effectiveness. Thach, Elizabeth (2002). Leadership and Organizational Development Journal, V 23, No 3 and 4, p 205-214.
Description: An action research study that tracked the progress of 281 executives participating in a 6 month coaching and 360 feedback process. Data obtained by direct report and peer post-survey feedback.
Results: The combination of multi-rater feedback and individual coaching increased leadership effectiveness up to 60%.
The Hay Group Study: The Future of Executive Coaching,
Hay Group, 2002 (http://www.haygroup.ca/pdf/knowledge_exec_coaching.pdf)
Description: During an HR annual professional conference, HR professionals from around the world were surveyed about their perception of the efficacy of executive coaching.
Results: 100% of respondents say that they believe that coaching can improve a leader’s effectiveness; 39.6% of organizations can link the use of coaching to better performance. Respondents linked coaching’s effectiveness to improvements in developing leadership capability, strengthening interpersonal skills, changing management styles, and building team effectiveness.
The Triad Report: Impact Evaluation Report on the Coaching.com Intervention, Coaching.com, October 2001 http://www.coaching.com/Marketing/Common/Images/ImpactReport .pdf
Description: A confidential study conducted by Triad for Coaching (dot) com, looked at the impact of coaching in delivering results against key business goals in an organization.
Results: The key findings concluded that ROI was 10 to 1 at a conservative level, with a long-term financial return in the millions.
They found strong for coaching efficacy for increased staff retention, creation of a positive work environment and increased revenue.
Summary of Executive Coaching Research Project, Carol Gegner, MA, MS Executive Coaching and Consulting Systems in the UK. http://www.coachingnetwork.org.uk/resourcecentre/articles/ViewArticle.asp?artId=61
Description: An international study, conducted in the UK, of executives who received executive coaching. The study explored the outcomes of the coaching process from an interpersonal and intrapersonal nature. The purpose was to measure the executives perceptions of the coaching process to explore what components of the process were most effective and whether coaching sustained behavioral changes. Several research questions were examined to explain what makes coaching effective.
Results: 93.8% gained greater insight into how their own actions impacted others, 89.6% felt the experience challenged their own actions, 85.5% were more sensitive to others, 81.2% had better relationships with their cohorts, 70.9% achieved a better balance in their lives.
Right Management Study: Methodology: Do You Need an Executive Coach?" Harvard Management Update, Vol. 9, No. 12, December 2004 and What An Executive Coach Can Do For You; Harvard Business School (2006) (http://hbswk.hbs.edu/archive/4853.html)
Results: 86% of companies said they used coaching to sharpen skills of individuals who have been identified as future organizational leaders. As an example “IBM has more than sixty certified coaches among its ranks. Scores of other major companies have made coaching a core part of executive development.
The belief is that, under the right circumstances, one-on-one interaction with an objective third party can provide a focus that other forms of organizational support simply cannot.”
“At an even more basic level, many executives simply benefit from receiving any feedback at all.”
As individuals advance to the executive level, development feedback becomes increasingly important, more infrequent, and more unreliable," notes Anna Maravelas, a St. Paul, Minnesota-based executive coach and founder of TheraRising. As a result, she says, "Many executives plateau in critical interpersonal and leadership skills.”