Is Executive Coaching for Business Leaders Effective?

Have you seen an Olympic-caliber athlete who doesn’t have a coach? Of course not. It is a combination of athletic talent and coaching support that catapults athletes to the highest levels of competition. Successful executives are no different. They possess the experience, and it is the skills and the support of an effective coach that help them achieve the best results, and get return on their investment (ROI) on coaching.

Yes, executive coaching is important, and it is a growing field. According to the International Coaching Federation (ICF), the number of Executive Coaches has increased by 54% to 109,000 coaches since 2019. ICF also found that 86% of organizations that invest in coaching report seeing an ROI on coaching. Furthermore, 70% of executives who have worked with a coach report improved work performance and leadership effectiveness.

Growth in coaching services is a result of organizations recognizing that more effective leadership is critical to sustain productivity, profitability, customer service, teamwork, and ultimately, corporate culture. This is especially true as organizations navigate the evolving economy as it relates to employees, customers, and economics. An executive coach offers an outside perspective and unique observations that are often challenging for internal leadership to see.

Coaches challenge and encourage. The coach’s role is not to sugar coat performance and decisions, but rather to help their coachee come to their own conclusions regarding performance and behaviour improvement through a series of questions, referred to as question-based coaching.

What does it take to build a Coaching Relationship?

According to Harvard Business Review, a successful coaching relationship should have the following ingredients:

• The executive must be highly motivated to change and/or improve.
• The coach and the executive need to be compatible, sharing a mutual respect.
• There is a strong commitment from the organization’s leadership to invest in the executive.
• There is an attitude of flexibility to adapt the coaching focus as required.

In today’s business environment, hiring an executive coach is being proactive. High-performance achievers have a never-ending desire to increase their potential, and they know a coach can help. Their driven growth mindset may have them working an inordinate number of hours, and expecting their subordinates to do the same. They may appear engaged but are actually distracted while multitasking and feeling a sense of chaos. An executive coach can help find balance and solutions to managing priorities and time.

Working with a coach is a journey and really does not have an end date, even if breaks are taken from coaching. Consider a coach a confidante who shares their outlook based on personal experience and training, and offers observations and feedback on areas such as:

• Work performance
• Job effectiveness
• Career direction
• Organizational design
• Priorities and time management
• Change management
• Strategic planning and execution
• Soft skills development or improvement
• Workplace relationships

The Numbers: ROI on Coaching

A recent study by Merrill C. Anderson, Ph.D., of the effects of executive coaching indicated that coaching produced a 788% return on investment (ROI). Manchester Inc. surveyed 100 executives, and their research showed that a company’s investment in executive coaching realized an average ROI of almost six times the cost of the coaching.

As study by the Human Capital Institute (HCI) found that organizations that offer coaching to their executives experience 32% higher employee engagement and retention rates. Leaders who are better equipped to manage their teams, who create a positive work environment directly impact employee satisfaction.

Finally, according to the ICF, 86% of organizations surveyed saw an ROI on their coaching and 96% of those who had an executive coach said they would repeat the process again. Tangible factors were increased productivity, higher levels of overall performance, reduced costs, revenue and sales growth, higher employee retention, and higher engagement of employees. Intangible factors were increased confidence of those being coached, improved communication, stronger employee and peer-to-peer relationships.

Executive Coaching: Who’s It Really For?

A study by CJPI found that over 50% of executives wo receive coaching are C-level or senior leaders, while over 40% are middle managers or directors. This matches to our experience, where we coach emerging leaders who organizations are investing in the move to the next level, or senior executives who are looking for support in their growth.

Coaching delivers results. Want to find out what it could do for you or your team? Try a complimentary test drive executive coaching session and see the difference, find the ROI on coaching!