The purpose of a shovel is to dig a hole. When choosing a shovel, you don’t worry much about what color it is or what brand it is. Your decision is based on whether the shovel is the right tool for the job (digging the hole).
Similarly, the purpose of executive coaching (a tool) is to achieve a business outcome. Unfortunately, clients and coaches often confuse the tool (coaching) for the outcome to be accomplished (e.g. strategic clarity, enhanced leadership effectiveness). When the outcome isn’t clear or measurable, the tendency is to focus on surface characteristics (e.g. perceived “good fit” between the client and coach) vs an objective assessment of:
- What outcomes are to be achieved
- How coaching can influence desired outcomes
- What skill and experiences a coach can offer
- Empirical measures of how results can be achieved
Admittedly, in the past it has been difficult to measure the impact (or value) of coaching in empirical terms. Because of this, it has been easy for organizations (and coaches) to throw up their hands and say the value of coaching is not measurable so why try. Or, alternatively, coaches attempt to utilize tools meant to measure business performance (e.g. ROI) which are not appropriate measures of coaching impact.
Recent research is making the connection between organizational health, (how effectively an organization works together to achieve a common goal) and organizational performance (what an organization does to deliver results) clearer. In Beyond Performance 2.0: A Proven Approach to Leading Large-Scale Change, the authors share the results of multiple studies showing the causal relationship between organizational health (a key focus of coaching) and improved financial performance.
Great coaches focus both on organizational performance and health to achieve desired business outcomes. Below is my “take” on how coaches effect change in some critical levers of organizational performance and health and the results of research on the measurable impact of improved effectiveness in these areas.
Building blocks that comprise a coach’s real value
Based on research and experience, here are the building blocks that comprise a coach’s real value proposition:
Strategic Alignment: Coaches help leaders create clear and compelling visions and translate them into strategic priorities; Impact: EBITDA is 1.9% above median when direction is clear
Leadership Skills: Coaches assist leaders in learning new leadership styles when historical approaches aren’t working; Impact: Versatile leaders (leaders who can use multiple styles at appropriate times) drive measurably improved financial performance across industries
Accountability: Coaches hold client’s accountable and teach clients to build accountability in direct reports; Impact: Companies with an accountability score in the top quartile achieve above median EBITDA; There is a clear link between psychological ownership and sales results
Innovation: Coaches drive innovation by helping leaders face challenges with fresh and innovative thinking; Impact: Improvements in innovation and creative problem-solving correlate directly with improved financial performance
Culture: Coaches help leaders identify elements of culture that support success, isolate areas where change are needed, and model desired change; Impact: Organizations with strong cultures characterized by trust, transparency and process discipline grow faster than those with weaker cultures
Team Building: Coaches help leaders build high performing teams that drive results; Impact: Aligned coalitions of leaders drive transformation and turn around poor financial performance
Because of the difficulty of measuring a causal relationship between coaching and outcomes, businesses and coaches have often mistaken a tool (coaching) for desired results (e.g. strategic alignment, improved leadership skills and innovation). The Bailey Group is beta testing a proprietary coaching and impact measurement process in order to make the relationships between coaching and organizational outcomes clearer. If you’d like to hear more about our results when available, send me an email and we’ll be sure to keep you informed. In the meantime, if I can be of help, please call at 763-545-5997.