Measuring and reporting the business impact of leadership coaching can unlock its full potential, providing an unprecedented level of data, transparency and accountability.
by Kip Kelly
July 8, 2021
Most companies around the world rely on coaching for learning and development. According to Chief Learning Officer’s annual Learning State of the Industry report, coaching was rated among the top three delivery methods for learning. Further, 55.8 percent of learning and development professionals report executive coaching was a part of their company’s leadership development strategy. In addition, 54.5 percent expect the use of coaching to increase throughout the next 12 to 18 months.
The International Coach Federation estimates the global market for coaching is more than $2.4 billion. That’s a 21 percent increase compared to the 2015 estimate. The market continues to grow annually by 6 percent.
Fifty percent cited limited support from senior leaders as the top challenge to future growth. Inability to measure the impact of coaching was ranked as the second biggest challenge, at 42 percent. Lack of budget for coaching activities was third, at 38 percent.
One could argue these challenges are all connected. It’s difficult to get support from senior leaders if you’re unable to measure and report the impact of coaching and it’s impossible to get budget approval for coaching activities without support from senior leadership. Measuring the business impact of leadership coaching is the key to get support and budget from senior leaders.
The measurement challenge
Coaching is not unique; the lack of measurement in learning and development is well documented. According to the same 2020 Learning State of the Industry report, only 26 percent of learning and development professionals said they measure the return on investment from learning. Another 24 percent said they plan to begin measuring in the next 12 months and 13 percent plan to begin doing so within the next 12-24 months. It’s worth noting that only 24 percent indicated they plan to share ROI data with senior leaders. The research suggests the industry is moving in the right direction, but we have a long way to go.
While coaching is not unique, it does present some unique challenges for organizations who hope to measure the business impact. Coaching typically focuses on the development of soft skills and leadership capabilities that are notoriously difficult, but not impossible, to measure. Coaching is typically an individual experience, featuring 1:1 conversations between a coach and employee, with little input, oversight or guidance from other stakeholders. Group coaching is highly effective for learning and development but poses a separate set of challenges to measure improvement at the individual employee level. Coaching engagements typically take place throughout several months and gradual behavior change can be hard to monitor, much less attribute to the coaching intervention.
Another obstacle to measuring the business impact of coaching is the lack of consistency among professional coaches. For years, coaching existed as a cottage industry dominated by thousands of individual practitioners. Coaching is not regulated by any formal body or authority. Currently, there are more than 500 entities that certify coaches worldwide and that list is growing.
The one globally recognized professional coaching certification is the ICF Credential granted by the International Coach Federation (ICF). The ICF estimates there are more than 71,000 coach practitioners around the world and most (74 percent) hold a credential or certification from a professional coaching organization, but many do not.
The number of coaches has grown to keep up with demand, with more than 33 percent new coaches joining the profession since 2015. Ensuring the consistency of the coaching experience is difficult with so many independent coaches, each with different levels of training, certification and experience. The lack of consistency can make measurement difficult and results hard to replicate.
The Kirkpatrick model
While measuring the impact of coaching is a challenge, it is not impossible. In many ways, coaching is perfectly suited for all four levels of the Kirkpatrick Model, a globally recognized method to measure the impact of learning and development programs. The Kirkpatrick Model is designed to evaluate both formal and informal training methods and rate them against four levels of criteria: Reaction, Learning, Behavior and Results.
Level One, the most basic level of evaluation is “Reaction.” It measures whether learners find the training engaging, favorable and relevant to their jobs. This level is often assessed by a post-training survey which asks participants to rate their experience.
Level Two, “Learning,” gauges to what degree the learner acquires the intended knowledge and skills. Level Three, “Behavior,” evaluates whether participants were affected by the learning and if they’re applying new knowledge and skills. Measuring behavior change helps to ensure that learning can be applied in the workplace. Finally, Level Four, “Results” evaluates the learning intervention against specific business outcomes.
First published in 1959, the Kirkpatrick Model has proven to be an effective method to measure the impact of learning because it focuses on the individual learner. It evaluates whether the individual was engaged, whether they learned new skills and knowledge, whether they can apply what they learned, and whether they can have a real impact on the business. The Kirkpatrick Model was updated in 2016, with a renewed emphasis on the importance of making learning and development relevant to people’s everyday jobs.
The business impact of coaching
Much like the Kirkpatrick Model, leadership coaching is focused on the individual learner. When done effectively, coaching can drive behavior change and real business impact. Unlike most “one-size-fits-all” training, coaching is personalized to meet individual needs and it can adjust as those needs change to remain hyper-relevant.
Coaching can quickly adapt to help leaders navigate a rapidly changing business landscape. Coaching typically happens in the flow of the employee experience, providing a valuable opportunity for individuals to apply new skills immediately, get feedback and adjust and refine new leadership behaviors. Given the duration of most coaching engagements, it is possible to observe and reinforce behavior change throughout several months.
Measuring results is the most difficult level of Kirkpatrick Model, but with the right processes, systems and tools, it is possible to measure the business impact and the return on investment. A 2011 study by PricewaterhouseCoopers found the average return on investment for organizations investing in coaching was seven times the initial investment.
Coaching should perform exceptionally well against the Kirkpatrick Model… so why aren’t organizations measuring the business impact of coaching? Why aren’t companies using ROI data to gain support from senior leaders and secure a budget to expand coaching efforts?
Well…it’s complicated. At least it has been complicated for decades. Selecting candidates for coaching, identifying skill gaps, hiring and assigning coaches, scheduling coaching sessions can become complicated quickly, and that’s all before you consider measurement and evaluation. Fortunately, technology and innovation are making it much less complicated. Learning and development professionals now have access to tools which make it easier to measure, manage and scale leadership coaching.
Coaching experience platforms are designed to lift the administrative burden of managing complex coaching programs, while providing greater transparency, data analytics and reporting so talent development professionals can focus their time and resources on expanding their leadership bench.
These intelligent coaching platforms can provide detailed reports, tracking improvement at the individual and organizational level. More sophisticated coach experience platforms are designed to track individual and organizational performance against specific leadership capabilities. They solicit input from a variety of stakeholders: the coach, the employee, the manager, peers and the talent development team to help identify skills gaps and measure performance improvement over time.
Managed coach networks ensure consistency in the quality of the coach experience for all learners, making it easier to anticipate and replicate results. Matching coaches with business leaders has become more accurate and efficient with the use of artificial intelligence, so coaching can begin immediately, accelerating leadership development and reducing the time it takes to see real business impact.
A coaching renaissance
Technology is transforming the industry, making it easier for organizations to measure the business impact of leadership coaching and removing the primary barriers to future growth. As a result, leadership coaching is poised for a renaissance.
Leadership coaching, once reserved as a critical intervention for the most senior leaders, is now available and cost-effective for leaders at all levels. Companies are expanding coaching opportunities to emerging leaders and individual contributors.
They’re using leadership coaching to support diversity and inclusion efforts, expanding coaching opportunities to under-represented populations to create a more diverse leadership pipeline. They’re using group coaching to drive collaboration and connect remote employees in a hybrid, distributed workforce. They’re using professional coaching to lay a foundation for talent management, preparing leaders to provide actionable feedback and to have more effective conversations with their teams.
The COVID-19 pandemic has encouraged companies to invest in coaching to provide support to business leaders during these challenging times. Traditional classroom-based learning was postponed or canceled in the wake of the health crisis, driving many organizations to explore, expand and embrace remote learning. Many companies turned to leadership coaching to support leaders through the difficult conditions presented by the pandemic.
Research suggests coaching will remain a go-to strategy as organizations transition from the post-pandemic recovery to the new hybrid environment, preparing leaders for the volatility, uncertainty, complexity and ambiguity that has become the new normal.
Talent development professionals already understand the benefits of coaching, but future growth and success depends upon the ability to measure and report the business impact. Coaching is an effective method to drive organizational performance and improve the bottom line. Measuring the business impact can unlock the full potential of leadership coaching, providing an unprecedented level of data, transparency and accountability.