The ROI of Coaching

The executives and professionals I coach confirm that they feel the impact in themselves and see it in their work, in their interactions with others, and in the organizations they lead.

Yet not all professionals and leaders work with coaches, and not all organizations subscribe to coaching. Even if they understand what executive coaching is, they still question whether coaching should be a priority and whether it’s worth the investment given all the competing important and often urgent demands they face.

In fact, in today’s complex environment coaching is an essential tool for supporting the effectiveness of professionals and leaders and is a sound investment that delivers a solid return.

Executive coaching uniquely helps leaders and professionals gain self-awareness and uncover their blind spots – their limiting beliefs and behaviors. Coaching goes further by helping individuals shift those beliefs and behaviors and by reinforcing their personal accountability for sustainable growth and change.

The evidence for executive coaching ROI is substantial and well-documented across multiple research studies over the past three decades from organizations including the International Coaching Federation (ICF), PWC, Korn Ferry, FMI, and MetrixGlobal.

Those studies showed that executive coaching delivers as much as 7x the initial investment by positively impacting the individual receiving the coaching and through the ripple impact to their teams and the wider organization.

Coaching has been shown to directly improve

  • Productivity at the individual, team, and organizational levels

  • Retention through reduced turnover among leaders coached and the organizations they lead

  • Business outcomes including revenue growth, employee and customer satisfaction, and innovation rates.

Citations:

  • FMI Corp., Executive Coaching: Driving Real Results for Leaders in the Built Environment

  • The Korn Ferry Institute, A Better Return on Self-Awareness

  • ICF Global Coaching Study, The ROI of Coaching

  • American University, The ROI of Executive Coaching

  • JoQing Wang, Yi-Ling Lai, Xiaobo Xu and Almuth McDowall, “The effectiveness of workplace coaching: a meta-analysis of contemporary psychologically informed coaching approaches,” Journal of Work Applied Management, 2021

  • MetrixGlobal, Executive Briefing: Case Study on the Return on Investment of Executive Coaching

Those that invest in coaching confirm benefits realized beyond traditional ROI metrics:

  • Improved decision-making as individuals learn to willingly challenge biases and assumptions

  • More influential and inspirational leadership as leaders and professionals gain self-awareness and self-compassion and become better and more thoughtful listeners

  • Greater ability to navigate challenges as individuals acquire awareness and tools that help them manage stress and burnout, become less reactive and more thoughtful, and strengthen their resilience.

Coaching can be particularly helpful in supporting effective leadership transitions. Transitions can be highly stressful, causing people to question themselves, the work they do, and the value they bring. It can lead otherwise skilled and talented leaders to default to old habits that may have served them in the past but can be damaging in their new roles.

In a 2019 study FMI reported that 91% of study participants confirmed that coaching was key in preparing them for their new leadership roles. They were more productive and engaged and their organizations avoided the expense of replacing them.

Conversely, organizations and leaders who choose not to invest in coaching can experience negative performance. In a 2013 study of leader self-awareness and blind spots across 486 publicly traded companies, Korn Ferry found that professionals at companies with lower rates of return were 79 percent more likely to have low overall self-awareness than those at firms with robust ROR.

Leadership today is multifaceted, and leaders must master competencies from the ability to navigate the complexities of their business, their organization, their industry, and the market, to leading complex, diverse, and multi-generational organizations. They must be clear on their intent and have the awareness and skills to ensure their impact is aligned.

Coaching is a wise, and perhaps essential investment for any leader to function effectively and thrive.