Coaching ROI: business benefit or fad?

Measuring the effectiveness of workplace coaching is an important barometer for businesses and coaches alike. Rupert Cornford dives back into the literature to look at another study

We get asked a lot in this business: what do you do and how do you measure it?

Businesses are obsessed with return on investment; they want to know if something will provide value – and rightly so if money is being committed to a new project.

As part of our series of blogs on coaching, I have been back into the academic literature to explore coaching and its impact on people at work.

Following a blog on this subject last year, which looked at the topic through the eyes of one paper, this piece will continue the story of education through another study.

And it comes with a catchy headline, which is probably the question most business leaders have in their head when we sit down: Developmental coaching: Business benefit – fact or fad?

The study, which was published by Elouise Leonard-Cross in the International Coaching Psychology Review back in 2010, looked at how coaching could specifically contribute (or not) to levels of individual ‘self-efficacy’ at work.

Much of the literature on coaching reports improved confidence, problem-solving techniques – with change becoming easier because of the new skills acquired.

So, measuring self-efficacy, which is an individual’s judgement of their own ability to reach a goal, sounds like a good way to take that forward.

Much of the coaching we do asks people to feedback how confident they feel to reach their goal – to assess their levels of self-efficacy.

This research argues an individual’s beliefs will directly influence the choices made and action taken. Confidence and competence will play a big part in that and how they will respond when things get difficult as well.

And the findings seem to back this up…

“This study found that that levels of general self-efficacy were significantly higher in the sample of coached staff than the sample of non-coached staff.”

The people being coached felt more confident to do the stuff they needed or wanted to do, basically.

The coaches also perceived this, too, according to Leonard-Cross, especially around areas such as “dealing with unexpected events, difficulties and unforeseen situations, clarity on personal goals and generating solutions to problems”.

In many ways you would expect this, as the coaching process can bring major clarity to how someone feels about who they are and what they can do – and how much they are willing to do it as well.

The paper also reports that “the coached sample of participants were significantly happier with their career direction and progression, more satisfied with work and more aware of personal strengths and weaknesses than non-coached staff”.

It’s important to acknowledge the good and bad of any research, however.

First off, there are very few empirical studies of coaching – those verified by observation and experience.

Leonard-Cross tried to overcome these challenges by including focus groups and interviews, to build on the self-reported measures of success that only tell part of the story.

But it’s not possible to know whether the difference between groups existed beforehand, as the research didn’t measure anything before the study itself.

There were also limitations caused by the questionnaire, with some participants feeling restricted by the options available to them.

But overall, the conclusions are positive.

“Assessing the RoI of coaching is challenging, however using psychologically grounded approaches can greatly contribute to the effectiveness of the evaluation … supporting the identification of less tangible business benefits.”

Much like studies before it, it concludes by saying coaching “is indeed a developmental tool, capable of producing a range if positive workplace outcomes”.

It might still feel intangible to some, but if ‘return on investment’ is reframed as ‘return on expectation’ – these are some of the benefits you would expect to see.

To put the research in context, this study took place in a large public-sector organisation, with more than 3,000 staff over 12 locations.