Guide to directing coaching trajectories
Alex J. Engel
Personal and organisational development by means of professional coaching Guide to directing coaching trajectories Alex J. Engel
Alex J. Engel
Personal and organisational development by means of professional coaching Guide to directing coaching trajectories ıst edition 2009 © Life University PO Box 2626 2002 RC Haarlem, the Netherlands www.lifeuniversity.nl info@lifeuniversity.nl ISBN: 978-90-74959-05-6 Cover design: Prezns, Marco Bolsenbroek Layout: Prezns, Marco Bolsenbroek Translation: Pen and Sword Translation Services, Jeroen van Swaaij Published in cooperation with Sieben van Hoog (info@Anduko.nl) © No part of this publication may be multiplied and/or made publicly available by means of printing, photocopy, microfilm, or in any other way, without prior written consent of the publisher.
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Word of gratitude
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t this point, I would like to thank all those who have contributed to the coming about of this book, starting with the NOBCO coaches involved in one of the surveys: Ru Banus, Hennie Beelen, Wim Beijer, Erik op ten Berg, Frans Besselink, Martine van den Bosch, Eric van den Burg, Pam Comijs, Margje Duursma, Annette van Engelen, Judith den Haan, Lous van Haarst, Anja van Herp, Titia Huisman, Lidwien Kamp, Peter Kamphuis, Hennie de Kler, Paula Korevaar, Chris Laarman, José Mark, Ton Martens, Antoon Melchers, Ien Peijnenburg, Menno Prins, Josephine Quartel, Hilde te Riet, Trees van Rijn, Annemieke Rozemond, Marlene Simoons, Hans Smith, Roger Tonnard, James Tyndall, Leo van ‘t Veer, Rienk van Wieren, Karin Wikaart. In addition, I want to express my gratitude to those who have provided their feedback or have otherwise been instrumental in their contributions to the contents of this book: Michel Blessing of B40 Marcel Diephuis of InnerSite Annette van Engelen of AVEC Charlotte Goedmakers of Corus Training Centre Sylvia Hendriks of Cheops Willem Huisman of Liberlei Atwil Louwerse of the Coach Company Annemiek Mul Annemarie Ortelee of Coaching Nederland Menno Prins of the NOBCO Registratiecommissie Leo van ‘t Veer of VMA Business Support.
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Preface
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Preparations for this book
Comments and remarks
riting this book has been a pleasure to me. Firstly, I am delighted to share my enthusiasm for coaching as a methodology. Coaching ensures that people and organisations perform more effectively, and allows for improved mutual cooperation in teams. Secondly, the survey preceding this book, along with charting the various aspects of coaching, has provided me with an even clearer view of the characteristic traits of this unique way of learning and development, and of the benefits coaching can entail for the individual and the enterprise in which he is active.
One of the major competences of coaches is their ability to listen genuinely. From this perspective and as authors of this book, we welcome any remarks or information that may prove valuable to improvement of its contents.
W Sources
Part of the information in this book is based on the survey held in 2003 among almost forty professional coaches, and on ten years of personal experience in coaching teams and individuals. The contents chiefly provide an outlook on the Dutch situation. I have used both Dutch and American articles, information, and sayings. With regard to profession, coaching in America is more advanced than it is in Europe. In Europe the Netherlands, together with England and its more profoundly American orientation, is one of the forerunners in coaching as a professional discipline.
Who is this book intended for Human resources managers and principals, i.e. purchasers of (external) coaching trajectories, have constituted the main group of readers at the back of my mind. Nonetheless, the contents of this book may prove useful for anyone interested in gaining insight into professional coaching as a development tool.
The main chapters If you intend to absorb the contents of this book within a brief time span, I would advise you to start with the introduction, chapter 1 (coaching ROI), and the set of summary diagrams on pages 64 and 65. In addition, chapter 3 (When to deploy coaching) and chapter 4 (The main forms of coaching) contain fundamental information. Chapter 6 constitutes an essential read for those who want to know what the competences of good coaches are, as well as how to go about selecting a coach.
He or She Throughout this publication, terms such as ‘he’ ‘his’ and ‘him’ will generally be used. This has been done to increase readability. Wherever the text reads the male form ‘he’, this should be interpreted as ‘he and she’. All instances of ‘his’ or ‘him’ are meant to signify ‘her’ as well.
Alex Engel Founder of the Dutch Order of Professional Coaches.
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Contents
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Introduction
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Chapter 1 Coaching ROI (Return on Investment) Cost-Benefit Analysis Rates Corporate culture as a return factor An American view of return on investment Demand for measurability Measuring returns Using benchmarks Conclusion
15 16 17 18 18 19 19 20 20
Chapter 2 When to call it coaching Coaching and therapy The manager as a coach Coaching and training Coaching and advisory work The true coaching attitude The depth of coaching Development using Robert Dilts’ neurological levels Changing responsibly The investment Quality
23 24 25 26 26 27 28 29 30 30 30
Chapter 3 When to deploy coaching When is coaching useful Criteria and questions for clarification of the coaching request Topics and their corresponding coaches Executive coaching Performance coaching Life coaching (Personal coaching) Career coaching Career trajectory duration is variable. Counselling and personal (recovery) guidance Mediation
33 34 34 34 36 37 38 38 38 39 39
Chapter 4 The main types of coaching 41 Personal coaching (one-on-one / vis-à-vis / face-to-face) 42 Tele-coaching 42 E-coaching 42 Web-coaching 43 Group coaching 43 Team coaching 43 Group dynamics coaching 44 Chapter 5 The coaching process Coaching principles The coaching process 1. Formulating the coaching request 2. Finding an appropriate coach 3. Preliminary interview and coaching agreement 4. The intake interview 5. The investigation phase
47 48 48 48 48 48 49 49
6. The coaching sessions 49 Coaching conversations and David Kolb’s learning styles 50 Coaching based on developmental stage 51 The logistics of the coaching trajectory 51 7. Evaluation 52 Chapter 6 The Coach Who or what is a professional coach (Self-) awareness Specialisations Coaching disciplines Coaching styles Guidelines for selecting a professional coach NOBCO-registered coaches Epilogue
55 56 56 57 57 58 58 59 59
Appendix Appendix summary The five coaching domains Coaching forms matrix Coaching Scan SWOT analysis PDP - Personal Development Plan List of competences 360° Feedback Performance Scorecard Stress Factor Scale Stress and Burnout Scale Coachability Test Organisation competences Organisation competence test The returns of coaching Dutch Order of Professional Coaches NOBCO Ethical Code of Conduct Brief summary of the standards for registration in the Dutch Order of Professional Coaches (NOBCO) register Definitions and concepts About the author Alex Engel
61 63 64 65 66 68 70 72 74 75 76 77 78 79 81 82 85 87 90 91 94
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Introduction
‘ The goal of coaching is like the goal of good management: getting the most out of the organisation’s valuable resources.’ Harvard Business Review
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n recent years, professional coaching has proven to be worthwhile and cost-effective. Laudatory reports on the effects of professional coaching are commonplace. Training budgets, for instance, turn out to yield a 300% increase in returns if coaching is included in training. Research has demonstrated that investments in coaching by commercial enterprises were even earned back tenfold. In addition, it appears that results increase as principals have more insight into the potential impact of professional coaching on individuals and organisations. Coaching ‘for coaching’s sake’ tends to contribute little to the organisation. Coaching directed at a clear goal such as ‘having people communicate more effectively and cooperating in better ways’, however, does make a real contribution. This book intends to provide readers with a clear view of the ‘coaching by (external) professionals’ phenomenon, and of the potential profits to be gained by professional coaching. The particular feature making coaching so special, apart from the learning process it tends to initiate, is its capacity to eliminate resistance to effective performance. To illustrate this, imagine the sail of a sailing boat; it will only provide any drive if it is in motion. As soon as its sail starts to ‘perform’, it will generate not just thrust, but air resistance as well. This process is implicitly contained in generating driving force. Improving the aerodynamic capacities of the sail will make it more effective. Sail effectiveness is mainly determined by its drive/resistance ratio. Put more specifically: the lower the resistance, the greater the efficiency will be. A similar process occurs in performance of individuals and teams. As soon as a person will ‘start moving’, some form of resistance will always occur inherently to the process; for example, irritation due to miscommunication or unrealistic expectations. Besides, consider the number of interventions that have not been tested against reality. Such phenomena result in unnecessary costs, or even produce irrelevant results that will need to be undone. So-called ‘normal’ performance, too, will always contain a degree of visible and invisible resistance. Such resistance is caused by a combination of physical, emotional, and interactive factors. Static in communication, for example, is a form of interactive resistance, where fear is an example of emotional resistance, and pain an example of physical resistance. As motion increases, as is the case in mergers for instance, resistance will rise accordingly. In order to overcome such resistance, we put
more energy into our work. Targets are raised, productivity must increase, and mistakes are no longer tolerated. The question remains whether this will result in any actual increase of ‘bottom line’ results. The secret to increased effectiveness turns out not to be hidden in continuously investing more energy into our activities, but to be contained in decreasing resistance instead. This is why professional coaching works. For as long as aspects such as irritation, conflict, and miscommunication are left unaddressed, resistance implicitly contained in all ways of performance, resistance will continue to play its destructive part. An example of the effect resistance can have is the situation where a team leader is convinced that he provides excellent (directive) leadership. So far, he has always managed to correct or camouflage his mistakes. Every day, the team leader briefs his staff elaborately, but he does not involve them in his decision-making. He doesn’t accept any of their comments either; ‘I am the boss around here’ is his maxim. His employees do their work, but they have no faith in their team leader, who incidentally has never discussed his own performance with his staff. After all, he does not doubt his own performance for a moment. Since the employees all want to stay employed, they keep their mouths shut out of selfprotection, towards the team leader as well as the general manager, thinking, “I wouldn’t touch that with a tenfoot-pole.” The energy required for ineffective leadership and covering up of mistakes is an outright waste. Have you ever calculated the costs of such squandering within your own organisation? The level of such ‘failure costs’ is notably higher than most people realise. A professional coaching process makes people aware of their attitudes, their behaviour, and the consequences they entail. Such heightened awareness alone will cause resistance to decrease and motivation to grow. Moreover, professional coaching elevates a sense of personal responsibility, increasing individual and team self-motivation. The result is a more effective mode of behaviour and greater sense of satisfaction. The benefits coaching may produce, as well as the related investments, are discussed in chapter 1: ‘Coaching ROI’. It can be hard to define exactly what coaching does. Still, even when we restrict ourselves to its essence, we may come a long way in arriving at such a definition. In essence, coaching is a guiding methodology aimed at increased performance effectiveness by individuals, teams, and organisations. It increases ‘earning capacity’. People and teams having received professional coaching communicate openly and directly, work in more goaloriented ways, take personal responsibility, and are more
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aware of the effects of their behaviour. The coach accomplishes this by first formulation a clear goal in consult with the customer, as coaching without a transparent objective is pretty much useless. Such goals may arise from desires of expansion and development, but may just as well come from an intention for recovery.
Chapter 3 ‘When to deploy coaching’ will reveal what format or methodology to implement, and when to do so. This chapter will distinguish five coaching subfields (domains). The entire coaching spectrum can be roughly divided into coaching directed at growth (Executive, Business, and Performance coaching) on the one hand,
Examples of coaching issues
Development
- ‘Preparing myself for a new (executive) position.’ - ‘Learning to provide coaching leadership.’ - ‘Reinforcing my/our leadership competences.’ - ‘Learning how to gain more confidence of our customers.’ - ‘Learning how to address colleagues in better ways.’ - ‘Finding a better balance between work and private life.’ - ‘Support in finding a more fitting position.’ - ‘Eliminate unnecessary friction in our (management) team.’ - ‘Helping employees make a swifter return to the work process.’
Coaching points of departure may be: When the goal of the coaching trajectory is clear for all parties involved, coach and coachee(s) will set out looking for: 1. Capacities, motivation, and (proactive) behaviour enabling coachee(s) to move towards formulated goals; 2. Resistance and environmental factors keeping the individual or team from achieving the desired goal. These two points of departure establish the foundation of a coaching trajectory. Over the course of the coaching trajectory individual qualities will be further developed, and resistance is cleared out of the way to the greatest possible extent. This latter feature makes coaching the instrument par excellence of true change; more so than any other form of guidance. In other words: coaching effects changes to the source of our performance; to our (self-) consciousness. It changes something in the way we view ourselves and the environment in which we perform our tasks. Professional coaching makes people and teams more aware of effective and ineffective behaviour, as well as of ways to deal with such behaviour. In the end, this will contribute to increased productivity and consequently to greater ‘Return On Investment’. True change rarely occurs overnight. This is why a coaching trajectory essentially consists of multiple contact occasions, making it pre-eminently an instrument of implementation, for example, for implementing a more client-oriented culture. Within such implementation, the coach serves as a ‘guide on the path of change’. What sets coaching other means of guidance is discussed in chapter 2: ‘When to call it coaching’.
Problem-solving and more solution-oriented coaching and counselling on the other. In between these two approaches, adopting a more holistic approach, we encounter so-called Life and/ or Personal coaching. The five ‘coaching spheres of activity’ will be defined using the coaching request as a point of departure. Basic methodologies available to the coach throughout the coaching process can be learned from chapter 4, ‘Main forms of coaching’. It will distinguish three main forms: 1. The Personal Interview; 2. Coaching at a Distance (Tele-coaching); and 3. Coaching Groups. In general, the coaching process will teach the client – called ‘the coachee’ in professional terms – how to use his own personal qualities in better ways. In addition, he will learn to transform ‘resistance’ into constructive behaviour. This will give him a heightened sense of being in balance with himself and his environment. Furthermore, the coach will help develop self-awareness, teaching how to gain insight into effective and ineffective behaviour. This enables those who have completed a coaching trajectory to act and think in ways that are more conscious in nature, implicitly resulting in more pleasant working environments and greater results. Chapter 5, ‘The Coaching Process’ will provide a stepby-step explanation of the coach’s work approach and the instruments he has at his disposal. It is often thought that people who do not come up to the mark in some areas ‘need’ a coach. However, it turns out that coaches are called upon by precisely that category of people and organisations typified by ‘being on a mission’, ‘desiring progress’, or ‘requiring change’. Moreover,
Introduction
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coaching has nothing to do with ‘teaching tricks’. In coaching, the coachee will get to grips with himself. Apart from providing (mental) support, the coach will serve as a mirror, an investigator, and a challenger, assuming the position of someone demonstrating when the coachee is ‘performing tricks’ and therefore not performing by his natural capacities, wasting energy unnecessarily. Coaching is a contemporary method for contemporary phenomena. In contrast to classical forms of treatment, the coach will serve as a professional guide in the process. In doing so, coaches will mainly help discover ‘what is in the way’, challenging the coachee(s) to tackle it. It is up to the coachee to decide how and when to come to terms with such resistance. If the coachee does not take action, he will be addressed by the coach during the next session, in order to investigate together what the coachee needs for selfmotivation required to realise the desired behavioural change. At times, resistance against clearing ‘the resistance’ (the impediments to optimal performance) out of the way will be stumbled upon. Habits are experienced as familiar (and therefore safe) ways of doing things. In the event of resistance to change, the coach will address the coachee on a deeper level to help bring about the desired change of behaviour from there.
Personal coach, or ‘Life coach’ as the profession is commonly coined throughout the English-speaking world. He specialises in balancing work, private life, relationships, and other primary aspects of life. Chapter 6, ‘The Coach’, will clarify the process of selecting the proper coach for a given trajectory, as well as the particular competences offered by specific coaches. A perfectly logical question posed by managers as principals of external coaching trajectories is ‘What’s in it for us?’ Inner change and ‘reduced resistance’ are hard to measure concretely. Nonetheless, it does represent the absolute key to true change and expansion of presence, motivation, competence, and performance of persons in organisations. By translating the personal transformation experienced by the team or the individual into effective behaviour and consequently into time and money, we are constantly improving our ways of calculating the returns produced by coaching. The concepts related to return on investment will be further elaborated upon in the next chapter.
By definition, a coach is not a ‘practitioner in charge of your case’, but rather serves as a ‘sparring partner’. This does imply that a coach requires sufficient substance to enter into dialogue with the coachee on an equal level. This is why coaches can be classified into different disciplines. As mentioned earlier, one end of the coaching spectrum is occupied by coaches directed at business and professional growth, such as: - The Corporate coach for organisational development; - The Executive coach for management and executives; - The Business coach for entrepreneurs and commercial managers; - The Competence coach for development of (specific) competences; - The Team or Group Dynamics coach for developing teams. At the other end of the spectrum, we will encounter coaches oriented primarily at correction and recovery, such as Career coaches and counsellors. They guide reintegration and burnout trajectories, for example. At the centre of the spectrum ranging between business ‘development’ and personal ‘recovery’, we encounter the
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Chapter 1
Coaching ROI (Return on Investment)
‘ Organisations believe that coaching helps retain the employee, entailing an investment lower than the costs associated with replacing the employee.’ David A. Thomas, Fitzhugh Professor of Business Administration, Harvard Business School, Time, September 2000
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Cost-Benefit Analysis
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very purchaser is occupied by the question of ‘What will it cost and what will be the benefits’. In the context of purchasing coaching trajectories, this question can be viewed from two perspectives: A. What are the costs involved in calling in a coach (this question will be addressed further on in this chapter), and B. What are the costs involved in not calling in a coach. The following case of a commercial director demonstrates the costs incurred if the organisation had decided not to hire a coach. The man had a large costumer network and was personally responsible for a € 500,000 annual turnover. He was at risk of leaving the organisation. By hiring a coach, the organisation was able to retain him in its service. Savings involved? The coach ‘got the job done’ for € 3,500 – in other words, .7% of the turnover represented by the director. As was indicated before, people’s effective performance is based on competences on the one hand (knowledge, skills, and experience), and on ‘resistance’ on the other. Such resistance mainly expresses itself in attitudes, or postures, adopted by people with respect to themselves and their environments. ‘Not feeling appreciated’ is an example, resulting in decreased effort. Although coaching aimed at (specific) competences is important and represents an effective way of truly letting people and organisations grow, the real short-term benefits of coaching are often contained in eradicating resistance. In other words: the quickest and moreover largest gains are to be made in teaching people how to stop ineffective behaviour, instead of teaching them new skills and knowledge. This is an important point calling for further deliberation.
Eliminating resistance yields the greatest short-term return Within organisations, the greatest waste of energy, time, and money occurs through ignoring such (mostly unconscious) resistance – a fact of which few managers are aware. Clinging to ineffective beliefs, for example, is a way of wasting energy. The notion that one cannot make mistakes as a human being is an example of such beliefs. A manager splitting hairs based on such an irrational notion actually restricts the effort, willingness, and creativity of his employees. Besides, have you ever considered the way in which problems at work cause elevated absence percentages? What are the costs involved?
Put briefly, costs associated with resistance and accompanying ineffective or unproductive behaviour are often greater than we realise. An example of removing emotional resistance by a coach is provided by the case of a woman confined to her home due to burnout symptoms. The company Health and Safety professional involved estimated recovery to take at least six months. Estimated costs involved (half an annual salary): € 15,000. After two coaching sessions, she returned to the work process, and in three months she was back in her original position full-time. Due to the level of confidence present within the coaching relationship, the woman was able to talk about matters she would never have wanted to discuss with either her manager or the H&S professional. The remedy turned out to be taking away one single crucial irrational conviction. Estimated return on this investment amounts to 500% - and that is still a modest estimate. Note: Recent research indicates that a mere 30% of all complaints in H&S doctors’ consultations can be attributed to a medically treatable background. The remaining 70% cannot or can hardly be treated by current medical standards. For this category of complaints, coaching (or counselling) is the appropriate method for recovery. Another example is a team of executives with a desire to reinforce cooperation. The group had received a wide range of courses in communication and client-oriented approaches, but its members were still unable to express themselves effectively towards each other. With the aid of a group dynamics coaching trajectory in which team members would coach one another on topical workrelated themes, the experienced in practice that open and honest communication really does work. They currently enjoy greatly improved team spirit in which executives provide more mutual support. The number of unnecessary mistakes has dropped as well, resulting in immediate saving. They were able, for example, to retain a dissatisfied customer for the organisation by a good team-based approach. This proved that training can establish a foundation, and that coaching is indeed capable of converting acquired knowledge and insights into effective behaviour. Yet another example is provided by a trajectory implemented by a Business coach who was training two different groups in the same sales training project. In addition, he guided one of these groups by Tele-coaching. Results: During the same single period, the group of coached
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salespersons submitted 63% more quotations than their colleagues who had only received the training. Here too, training provided the required insights and information, whereas coaching turned this knowledge into measureable results. In other words: coaching (especially coaching directed at dealing with resistance) yields greater effect than we are usually aware of. Viewed from this perspective, investments in coaching are relatively small, and savings and returns in terms of production increase are large. The invitation implied here is not to look solely at the investment costs in purely financial terms, but to also look at the potential costs associated with the organisation disregarding the surplus value of professional coaching.
when they are just starting out. However, their limited experience will mean they will need more time to achieve the goals set in coaching trajectory. In order to gain experience, they will accept any assignment they can get. 2. Demand-related market operations. Greater demand means lower price pressure. This applies to specialist coaches in particular as such experts often have busy schedules. In addition to these factors, we see striking differences in rates between coaches (and counsellors) oriented more towards recovery guidance and the more ‘businesslike’ coaches oriented towards growth and development.
Characteristics of resistance
- People only do what is asked of them, and wait for instructions’ - Management does not tolerate objections. Employees tend to submit to leaders’ opinions in order to avoid conflicts; - There is a competitive culture dominated by ego, causing adversity among colleagues; - People keep crucial information to themselves to increase their power; - Gossip culture causes people to waste time and co-worker mentality; - Fear of reprisal makes people unwilling to cooperate in evaluations; - People do not express themselves for fear of being deemed incompetent; - Agreements aren’t made explicit on the assumption that everyone knows what they entail, leading to unnecessary mistakes. - Employees are highly critical of management, and management is highly critical of employees in return; - Reality is ignored – refusal to call a spade a spade for fear of creating conflicts. Employees lack the skills required to deal with such conflicts.
Costs of resistance in organisations
- Meetings are less effective or even ineffective; - More mistakes are made; - People do not cooperate in tasks outside their immediate job descriptions; - Getting things done takes additional time; - Unpleasant working atmosphere radiates outward to customers, causing them to pull out; - Employee creativity goes unused. Opportunities are missed; - Mutual mistrust leads to much time invested in defending one’s own position; - Necessary changes do not occur fast enough and are even sabotaged.
Rates Coaches’ rates depend on a number of factors. 1. Supply-related market operations. Higher numbers of coaches mean lower price pressure – particularly so for those newly introduced to the markets. Coaches will be prepared to offer their services at lower rates
Hourly rates of coaches vary between € 75.00 for novel coaches and € 250.00 for experienced Executive and Corporate coaches. The latter category will help general management develop new strategies and commercial insights, and will support their implementation. For Executive coaching, average rates tend to be about 25% higher compared to those related to Personal coaching. If we think in half-day shifts, rates per shift vary between € 300.00 and € 1,000.00 per shift. (Source: Survey held among NOBCO professional coaches, December 2003). 3. Costs incurred by the coach, such as travelling and accommodation expenses, location expenses, and equipment expenses occasionally. Sometimes, such costs are already taken into account in the rates; sometimes they are charged separately. 4. T he fourth factor contributing to coaching rates is that which may be saved or gained by meeting needs. If, for example, coaching of account managers causes turnover to rise while reducing costs by improved cooperation, then investments in coaching may be more than justified.
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Cutting costs for professional coaching may be achieved by selecting Group (Dynamics) coaching. Investments per individual are significantly lower in coaching groups accommodating seven or eight participants. In chapter 4, ‘The main types of coaching’, you can learn more about Group (Dynamics) coaching. When considering rates, it all comes down to the returns gained by coaching. The format of the implemented coaching process should match the reasons for deciding on a coaching trajectory, as should the expertise of the coach. The challenge for purchasers of external coaching here is to make well-considered decisions. Moreover, it is up to the professionalism of coaches to indicate whether the desired coaching trajectory falls within their area of expertise, and whether they are capable of helping to achieve the intended objectives... or whether they should kindly refuse and refer you to a coaching colleague.
Corporate culture as a return factor In order to get an idea of how profits are generated by a competent corporate culture, we could look at an investigation by the American Gallop Institute. This survey involved several business units from a single stores chain. Survey results demonstrate that those units that score high on good corporate culture perform 15% above target level, while units scoring low on good corporate culture perform 30% below target level. This amounts to a 45% performance discrepancy. Such results serve as clear indications of the value of a competent work environment, which can be arrived at by Corporate coaching, among other things. The work of the Gallup Institute proves that if culture and working atmosphere in an organisation are satisfactory, employee involvement will be high, resulting in decreased resistance and rising financial performance. This clearly shows that ‘hard’ results depend on ‘soft’ factors. Professional coaching is capable of improving precisely such ‘soft’ factors.
An American view of return on investment The following section is a translated and edited version of an American article by Patsi Krakoff, a certified Business coach. The article is a collection of various American studies investigating the return on investment for coaching programmes in organisations. The article lists a number of sources that may be consulted for further details. According to Krakoff, professional coaching in organisation is on the increase. This gives rise to a demand for reports demonstrating that coaching expenditure results in ‘bottom line results’, as Americans so eloquently put it. The challenge remains
to gather measurable data representing concrete results. Currently, a wealth of useful information has been collected by a range of organisations. Organisations do not just revolve around what you know; how you treat others is far more important, both internal to the organisation and external to it. Research by the Centre for Creative Leadership in America has pointed out that 85% of all occurrences of ‘derailing’ among executives can be traced back to a lack of emotional skills, also called ‘emotional intelligence’. Three of the most important deficits are: 1. Problems in coping with change; 2. Poor ability to work in teams, and; 3. Poor interpersonal relationships. The research in question conducted among 130 managers has indicated that the degree to which an executive is capable of handling his own emotions determines the number of people in his surroundings readily willing to work for him. (Source: Walter V. Clarke Associates, 1997). Both for executives and other people, coaching is chiefly effective at increasing competence in dealing with change. It helps managers identify when teamwork is important, and how they can facilitate it. Coaching is particularly effective in working on skills and capacities required for maintaining effective relationships.
Coaching is particularly effective in working on skills and capacities required for maintaining effective relationships. Professional coaching paves the way for executives in achieving higher levels of effectiveness in organisations by means of dialogue and reflection. Coaching generates awareness, goal-orientedness, competences, and a sense of well-being among participants. According to Krakoff, ‘Coaching is NOT a ‘feel-good’ exercise based on soft skills that do not correlate to the bottom line.’ A Harvard Business Review article (Jan/Feb 1998) titled ‘The Employee Customer Profit Chain at Sears’ by Rucce, Kim, and Quinn describes a model that demonstrates increased employee involvement results in stronger ‘positive impression’ among customers. This has caused turnover to grow by .5 percent for the organisation involved. In another study, effects of Executive coaching on municipal authorities were investigated. A total of 31 managers received a conventional training programme, followed by eight weeks of one-on-one Executive coaching. Training, addressing topics such as setting goals, problem solving
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by cooperation, feedback practice, supervision involvement, result evaluation, and public speaking, yielded a 22.4% production increase. By contrast, training followed by coaching yielded an 88% production increase: four times that of training alone. (Source: Public Personnel Management; Washington; Winter 1997; Gerald Olivero; K. Denise Bane; Richard E. Kopelman). In America, coaching used to be employed only as an intervention instrument for employee problems. Today, coaching is a standard component of leadership training in organisations such as IBM, Motorola, J.P. Morgan Chase, and Hewlett Packard. Companies like Merrill Lynch and other commercial organisations such as insurance agencies use coaches as preventive support for positions with high levels of stress. Coaching is also employed for further development of executive competences and high potential qualities. Coaching is not only able to increase manager results, but also serves to reduce errors among ‘young executives’ by timely correcting them by means of coaching. Michigan-based Triad Performance Technologies Inc. have studied and evaluated effects of coaching interventions on a group of regional and district sales managers in a telecom organisation. The study performed by this independent organisation calculated ROI to be 10:1 within a single year. The following outcomes were directly attributed to coaching: 1. Peak-performers, a group containing a number of individuals who considered leaving the organisation, were retained by the organisation, resulting in higher turnover and profits, and increased customer satisfaction; 2. A positive work atmosphere was created in which focus on strategic accounts resulted in greater turnover; 3. Income per customer and customer satisfaction were improved by better staffing and well-functioning districts; 4. Financial results improved as managers performed better and exceeded their targets (source: www.coaching.com). In their book ‘Primal Leadership’ (Harvard Business School Press 2002), Goleman, Boyatzis, and McKee stress the following point: It is generally assumed that every executive ought to be a good coach. It appears, however, that this interaction style is least applied by the average manager. ‘If the pressure is high, I don’t have time for coaching’, is what they will typically say. This mode of thinking fits seamlessly with the argument presented in chapter 2, ‘The manager as a coach’, where
an appeal is made to let managers do the managing and have (external) coaches do the coaching. It is far from improbable that in the future, organisations will employ professional coaches for this very reason.
Demand for measurability Organisations differ by degrees in the way final results are influenced by the ‘intangibles’ – a certain set of initiatives related to unquantifiable factors. In this paragraph, Krakoff mentions an example of how coaching can affect financial results. A study conducted in connection to an Executive coaching programme by Metrix Global is impressive in its results. Over 70 executives of a telecom multinational (with participants across America, Canada, Mexico, and Brazil) have conducted extensive research among participants of a coaching trajectory. The results they came up with are as follows: Coaching yielded 529% Return on Investment, along with significant ‘intangible results’ for the organisation. When financial benefits of employees retained are included in these calculations, ROI attained rises to 788%. This study provided researchers with new insights; they bear particular relevance to ways for organisations to gain maximum effects from Executive coaching. (Source: Merrill Anderson: merrilland@ metrixglobal.net).
Measuring returns Models and publications related to measuring training returns, such as the books by Jack J. Philips (Returnon-investment in Training Performance Improvement Programs) and Don L. Kirkpatrick (Evaluating Training Programs) constitute useful resources for measuring returns. In their publications, they discuss the available ways of calculating training returns. These same principles, however, can also be applied to measuring returns of coaching. Their outlook comes down to a division of evaluation into several levels. Translated freely, the following levels result from calculations of returns: 1. What is it we wish to change? What are the results (improvement or recovery) we are after (and what will it cost us if we do not realise the improvement). 2. What is needed (what behaviour/ change) in order to achieve the intended results? 3. What are the (measurable) competences the person (or the team) requires for this (the appendix includes a list of competences).
Chapter 1 Coaching ROI (Return on Investment)