With 23,700,000 search results on Google, the return on investment (ROI) of the business coaching is of interest to many people. With Jean-Michel Janoueix, a former manager and executive coach, we explored the literature on the subject: what studies have been published on the ROI of coaching? what do they say? what arguments do they put forward to convince companies of the usefulness of a coaching approach? what KPIs can reassure companies that they are making a profitable investment?
We had to come to terms with the fact that, until now, the ROI of coaching has not been measured effectively. This has led to the idea that coaching is worth less than it actually is, simply because we can't attach a number or a monetary value to it. So is measuring the ROI of coaching a bad idea?
Contents
Measuring the ROI of business coaching: what are we talking about?
The value of coaching
Ask your friends and you'll find that more and more companies are investing in coaching for their executives and managers to improve performance and build loyalty. They are discovering that coaching can clearly lead to a strengthening of leadership style, managerial skills and greater team effectiveness.
Once you've got past that first question, you'll no doubt quickly come to another, classic question when it comes to investing time and money... Is it worth it? What is the value of professional coaching and how can it be measured? Here, too, is the fateful question of the return on investment (ROI) of business coaching! This return on investment, once it could be calculated, would be a very useful selling point for coaches.
But the return on investment from coaching is not effectively measured. Companies are used to measuring the return or performance of very tangible investments in tangible assets (e.g. machinery) or sometimes intangible assets (e.g. software or brand equity). They are able to measure in concrete terms how much these investments 'return' in terms of productivity. A business coaching is less suited to this: several factors explain the difficulty in establishing a link between the learning and benefits derived from a coaching experience... and the company's accounting and financial data. Which begs the question: is evaluating the ROI of coaching a bad idea?
Identifying the ROI of coaching: is it possible?
Studies that date back
The literature on the subject is old, the studies are dated and the overwhelming majority are in English, from Anderson's "The MetrixGlobal Study" dating from 2001 to PWC's ICF Global Coaching Client Study dating from 2009. Coaching is indeed more developed in Anglo-Saxon countries, and the religion of ROI is also more prevalent there! Many firms also quote "in-house" figures, but the methodology behind their calculations is not really explained.
So, without any new knowledge, it's not easy to form an informed opinion about the ROI of business coaching...
A premium on numbers
Talking about ROI most often means talking about figures and tangible results. It means, for example, quantifying the value and impact of coaching on criteria such as sales generated, the level of commitment and loyalty of employees or the increase in the customer satisfaction index. On this basis, some studies believe it is possible to deduce a return on investment. Take, for example, the increase in the employee loyalty. In the literature, we can find calculations which link the savings made by the company thanks to the reduction in the employee turnover rate and a "coaching contribution" coefficient: €2,000,000 saved over 2 years x 45 % for the coaching contribution to results = €900,000 quantified added value of coaching. This type of logic, which resolutely seeks to associate euros or dollars with a coaching service, did not convince us at all, and we will explain why in the next section.
Not to mention the fact that many coachees themselves suggest "getting up in the morning to go to work" or "daring to take risks" as indicators for measuring the results of a coaching approach. That's a far cry from the traditional tangible and measurable KPIs!
Business coaching or business & coaching?
The Anglo-Saxons have a more transactional approach, with this way of thinking where every problem has its solution. This approach is more suited to the needs of business coaching, which is aimed at entrepreneurs who want to develop their company's commercial activity.
Evaluating the ROI of 'professional coaching' makes less sense, because it involves questions of career development(Be careful not to confuse 'business coaching' and 'executive coaching', which are aimed at the same people: one is aimed at the development of the company, the other at the development of the individual). So how do you demonstrate the positive impact of coaching on a person's day-to-day performance when the relational aspects are just as, if not more, important than solving business problems?
Evaluating the ROI of business coaching: is it worth it?
As you will have gathered, the literature on the subject considers that the most solid return on investment would be that which establishes a direct correlation between the company's performance and coaching. For example, by tracking (the marked improvement in) the sales figures of a team whose manager has benefited from individual coaching, or by tracking the customer satisfaction rate of an after-sales team that has benefited from team coaching. Yes, but...
Business coaching is first and foremost a question of demand
Before defining what tangible or intangible, material or immaterial benefits coaching can generate, the main question is to clarify the request in terms of needs and ambitions, i.e. what the coachee wants to achieve with the support of the coach. The ROI is only the consequence of the objectives set at the beginning of the coaching. Now, these objectives, this demand, may be more tactical, such as being convincing at job interviews, or more strategic, such as developing a leadership posture to join a ComEx, developing communication skills or interpersonal skills to facilitate teamwork. They can be more operational or more personal, with a potential ROI that varies...
Assessment criteria that depend on demand, not the other way round
Some recommend evaluating ROI on a combination of three 'universal' criteria, whatever the type of coaching: performance, retention and well-being at work. At first sight, why not? These criteria are neither good nor bad in themselves: nobody thinks that well-being in the workplace would be useless!
But once these criteria have been established, there is a risk of orienting, or even predetermining, the objectives of future coaching sessions. Whether it's a question of taking up a new post, a situation involving a high level of interpersonal skills or a career change, the risk would be to remain trapped in an overly rigid evaluation grid, by formulating objectives based solely on these 3 evaluation criteria. Let's take the example of a manager taking up a post in a multicultural team. The company may be tempted to use the criteria of performance, loyalty and well-being at work to assess this individual support. In this case, however, it might be more interesting to give priority to criteria linked to improving skills such as fluidity of communication or adaptability.
The involvement of the coachee
The ROI of coaching also depends heavily on theinvolvement of the person being coached. Two factors come into play: on the one hand, their willingness to get down to work, and on the other, their appetite for change (or to put it another way, their aversion to risk). Because working on your beliefs and behaviours, on your professional identity, may mean shaking up your professional posture and practice. Starting coaching means accepting the risk of changing "something" in the way you work, the way you read a situation, the way you interact with others... Coaching is only effective and profitable if the coachee takes charge, gets moving, takes the first steps - in short, gets involved in his or her professional development.
This raises the legitimate question of the ROI of coaching that is not sought out. at the right time. It is clear that "last chance" coaching requested by a Human Resources department before starting a redundancy procedure cannot be as effective as coaching requested in time to encourage employee commitment, beforehand. Because how can you be a committed coachee in such a situation?
Similarly, a certain type of corporate culture may want to (impose) too many quantifiable evaluation criteria on coaching, such as an increase in sales figures. The risk is then to generate negative effects of resistance, for example by increasing the stress of the coachee, linked to the achievement of the expected performance.
Business coaching, a piece of the jigsaw
Let's take the example of the sales figures of a team whose manager has benefited from coaching. How can we isolate and quantify the effects of coaching in relation to the sales figures? other events during coaching? It is difficult to isolate the effects of coaching actions within the company system, where many strategic decisions are taken by the players in the system. Let's face it: coaching is only one piece of the jigsaw.
Business coaching and the butterfly effect
We might also ask how the fact that a manager decides during a coaching session to listen to his teams rather than impose his decisions will change the purchasing decisions of the company's customers? However, the example that this manager sets on a day-to-day basis, his attitude and his behaviour with his teams, can profoundly change all relationships within the company. The systems approach shows how all employees are interconnected and linked by the company's shared values and strategic vision, and how collective intelligence works. But that's not to say that increased sales (customers' purchasing decisions) can be linked in a straight line to coaching... The ROI of coaching does not always translate into hard cash, even if it contributes to skills development.
Who knows better than the coachee?
At the end of a coaching session, a final multi-stakeholder meeting is generally organised between the coach, the coachee and the prescriber - in any case, this is good practice and is strongly recommended by the International Coaching Federation. It is at this point that the coachee will give his or her point of view on the improvements achieved, based on feedback that is generally much more qualitative than quantitative.
After all, it is first and foremost up to the coachees to say what coaching has done for them. Professional coaches are not in a position to comment on the benefits of coaching, or to keep track of the progress of an action plan. Coaches are there to help their clients achieve their objectives. If a company coach observes that a coachee is more at ease with his team because he talks less and less often about team problems during the sessions, but the coachee does not say that he feels more at ease, how can the coaching be evaluated? These two realities are true at the same time. But it's always the coachee's word that counts, and it's the coachee who is "at work" during the coaching.
So it's not a question of asking: has the coach done his job properly? - as if the professional coach were included in the ROI evaluation. It's about asking the following questions: how did the coachee get on, what did he or she retain and what is he or she putting into action? And the company is present at this multi-party meeting, through the voice of the coachee's N+1 and/or HR. It is their responsibility to give feedback on the achievement of objectives as they see it. It is at this point that the scope of the coaching can be identified, in the absence of a ROI as the Anglo-Saxons envisage it: through a discussion with the various stakeholders, by clearly and openly addressing the benefits observed post-coaching, the implementation of an increase in skills and the achievement (or not) of the objectives defined at the start of the coaching.
In conclusion
There is a great temptation to want to measure the return on investment in business coaching at all costs. This comes from the Anglo-Saxon practice of business coaching. But it is not easy to associate a direct and precise monetary measure with the coaching process, especially as coaching generally deals with "human matters" and often works on the coachee's working relationships with colleagues, partners and clients - very intangible subjects. So perhaps the best way to measure the effects of business coaching is to ask those who have benefited directly, and to identify with them the progress made in relation to the objectives defined at the start of the coaching, and the unexpected progress made spontaneously, on subjects related to the objectives.
