ROI for Professional and Executive Coaching

Changing workforce demographics 

American business faces a leadership crisis.  In a 2006 study of the public's perception of US leadership conducted by Harvard and US News, only Congress, the Executive Branch and the press received lower scores than business leaders.   In the US, 80 million baby boomers are entering retirement age during the next decade.  Behind them are 40 million Gen-X'ers and further back are 70 million Gen Y'ers who seem to hold very different views of work than previous generations.  

The talent supply is further compounded by the restructuring of US business in the 1980's which eliminated many of the traditional management development programs installed in earlier decades.  In The Great Boom Ahead, Harry Dent argues quite convincingly these demographic changes will begin to have a significant impact between 2008 and 2012.

Changing leadership roles 

All of these factors--declining birth rates in the late 60's and 70's, lower investment in education, rapid automation and greater outsourcing-mean today there are fewer and less well-prepared younger executives expected to assume increasingly more complex roles in a global economy.   

Professional and executive management roles in western economies are likely to demand more conceptual and strategic thinking and leadership. The new leadership roles are likely to demand the utilization of random, intuitive, holistic, synthesizing, subjective thinking capabilities. Neither the academic or business world has adequately prepared the Gen-X or Gen-Y generations for the assumption of the leadership roles being vacated by Baby Boomers.  Certainly not at the accelerated pace that's being required. 

Compounding the leadership problems are automation and outsourcing which are stripping out the logical, sequential, rational, analytical, objective, "left-brain" tasks of many professional positions in North America and Western Europe.  Some of the most technical aspects of professional roles in law, medicine and computer science which can be reduced to a work-flow diagram are being stripped away and sent to workers in lower wage countries. 

The most successful leaders find ways to help others see problems or solutions in ways that influence emotions, not just thought. Unfortunately, that kind of emotional persuasion isn't taught in business schools, and it doesn't come naturally to most managers who pride themselves on disciplined, analytical thinking.In recent years, business and academia have argued for increasingly greater emphasis on formal education and training in technical areas like math and science.    

Why coaching is one of the answers 

Coaching is individualized, efficiently delivered leadership and management skills training and development.  Coaching is precise, targeted, contextual, role directed, goal directed and focused.  Increasingly, coaching is being utilized to support and accelerate the development of key performers.  Faced with potentially high turnover, many companies are investing in the 20% of the organization's leadership and professionals who are creating 80% of the value. 

Coaching is a process.  Trained coaches are experts in the process of coaching, not in the subject matter of the role.  Coaching borrows much of its theoretical underpinnings from the behavioral sciences of psychology, counseling and sociology.  There is a growing body of knowledge about coaching most of which originates in Positive Psychology a branch of psychology dating back to Abraham Maslow.  

Positive psychology is concerned wwith the enhancement of performance and well being and focuses upon people's strengths and what they do well.  Europeans businesses, particularly the British have been utilizing coaching in business for much longer than the US businesses.  What has been a cottage industry without many standards is becoming more professional and supported with valid scientific research.  

Effective coaching raises the "emotional intelligence" of participants.  Popularized by Daniel Goleman, emotional intelligence can be characterized as the "intelligent use of ones emotions".  It is being more fully aware of one's self and others. 

The International Coach Federation (ICF) has emerged as the preeminent international accrediting body.  The ICF has established a set of core competencies for coaches that has gained widespread recognition by professionals and academics.  Major universities have created graduate-level, evidence-based coach training programs which help qualify graduates for accreditation.   

Coaching is not consulting, counseling or therapy.  A consultant gives advice a coach makes suggestions.  A counselor or therapist is primarily addressing issues of emotional pathology which cause their clients distress or problems in living.  Coaching is intended to help otherwise emotionally healthy, successfully functioning people make enhancements to their work or personal lives.Typically, a counselor or therapist is engaged to assist people who have a legitimately diagnosable emotional disturbance.   

Helping executives think  

How we learn 

Good business decisions are made with intellect.  They are fact-based decisions, not emotional ones.  Good coaching helps executives think more clearly about the challenges of their jobs and make good decisions and take effective actions.  It helps them become aware of their own emotions and the emotions of those they interact with.  This awareness helps them become better leaders and make and help others make better decisions.  This approach is a methodology based upon a behavioral management style from psychology known as cognitive behavioral technique or CBT.   

Cognitive psychology has it roots in the theories of Albert Ellis.  Ellis maintained how we view and interpret the events in our lives determines how we respond.  We can learn to access, monitor and change our thoughts.  When we change how we think and feel about the events in our lives, we can change our responses to these events-our behaviors. 

CBT works with executives because it is intuitive, simple and transparent.  Typical professional and executive coaching objectives like modifying interpersonal communication styles, improving listening and speaking skills.  Results in these areas are easily demonstrated.  

How coaching works 

New scientific evidence 

Research in brain science gives us some additional insight into why/how coaching works best for management/leadership training.  Conceptual thinking takes place in the limbic system or the "emotional brain" this area of the human brain is involved in emotion, motivation and memories which have an emotional connection. The limbic system influences the formation of memory by integrating emotional states with stored memories of physical sensations.   

Information delivered through traditional management skills training, classroom techniques is processed in the neocortex. It is involved in higher functions such as sensory perception, generation of motor commands, spatial reasoning, conscious thought and language.  The part of the brain that stores content but doesn't manage actions.  There is some evidence that traditional classroom training may even have a negative impact on the job performance of professional and executive leaders. 

Contextual learning, that learning that occurs in the context in which it will be retrieved and utilized works best for leadership skills development.  In this way, the client/learner is exposed to new concepts or strategies, gets to try them out, get feedback then try again.  This "trial and error" learning approach works best for management and leadership skills development.  The "right brain" dominated skills are best learned through techniques utilizing patterning, metaphors, analogies and role playing.  This is limbic system learning. 

Additionally, computers and automation have made the assessment of individual's personality characteristics and work styles and behaviors more valid, reliable and more easily administered and affordable.  Individualized performance or development coaching is likely the most efficient way to improve leaders in organizations. 

Here's a Formula We Like for Calculating a Return on Investment for Coaching