The Business Case for Coaching

By Julie Parkinson, Director of Client Services of the IECL

A growing body of research confirms that coaching is one of the most effective ways to create dynamic organisations capable of adapting to the constant challenges of the global environment.

According to the 2011 DDI Leadership Forecast, two of the most critical skills for leaders in the future are managing change and coaching and developing others.

However, half of the leaders surveyed rated themselves as ineffective at these skills. In the same survey, only 18% of HR respondents felt their companies have the quantity and quality of leaders they will need to run the organisation in 3–5 years time.

Research has shown that coaching has a positive impact on achieving goals, improving performance, building resilience and engaging teams. Through coaching, leaders allow people the freedom to use their talent, skills and experience, while at the same time ensuring clear goals are in place and outcomes are achieved. Not only does this ‘people focus’ increase productivity and the speed of individual’s development, it frees up the time of senior leaders to focus on strategic priorities.

So what are the benefits of coaching?
The Institute of Executive Coaching and Leadership (IECL) has compiled a selection of outcome-driven industry research from the last decade to show how coaching impacts leaders and organisations and more specifically what problems coaching and being coached helps leaders to deal with.

Coaching has a direct impact on the following:

1. Managing the stress levels of leaders: Research shows that coaching others and being coached has a positive impact on the psychological health of leaders. Leaders who coach employees show lower stress levels as they experience compassion through the development of others.
2. Achieving business goals. Coaching helps individuals set and reach identified goals by being clear and focused and held accountable for their performance by their leaders.
3. Increasing levels of engagement and retention; Leaders can work with a coach to develop social intelligence to create positive behaviours and emotions in their employees that lead to engagement and retention--the success of a leader depends very much on the success of those around him or her. Coaching also helps leaders to develop their own self-awareness and an understanding of how their behaviour and style impacts those around them.
4. Increasing the benefits of 360 feedback. We know that coaching behind feedback enables employees to set more specific goals, seek improvement ideas from their supervisor and receive higher ratings from supervisors and direct reports.
5. Increasing productivity following training: The benefit of most training reduces significantly once the employee returns back into the work environment. Research has shown that coaching can maximise the benefits of training by 88% ensuring that the training dollar is truly effective. Many organisations now embed coaching into leadership development programs to maximise the return on investment.
6. Maximising the effectiveness of leadership development, particularly in the long term. The main benefits of coaching include more effective leadership, increased speed to market, better interpersonal skills and retention of valued employees.
7. Improved leadership and business performance; Different studies show return on investments of the coaching dollar of 529% to 680% with detailed breakdown on specific areas such as teamwork, accelerated promotion, retention of customers and client satisfaction.

With such overwhelming evidence, it is not surprising that HR professionals are investing time and energy into developing coaching skills for themselves and also building a coaching culture across the organisation. At the heart of coaching is the ability to listen deeply, ask open questions, help employees gain clarity on goals and then be held accountable for achieving these goals.

It all makes perfect business sense.