Case Study on the Return on Investment of Executive Coaching By Merrill C. Anderson, Ph.D. CEO, MetrixGlobal, LLC

For years, CEOs of some of the most successful and largest companies have relied on executive coaches. Henry McKinnell, CEO of Pfizer, Meg Whitman, CEO of eBay, and David Pottruck, CEO of Charles Schwab & Co., are just a few who rely on a "trusted adviser”.

~ The Business Journal, Nov. 2003

The leaders of organizations such as Alcoa, American Red Cross, AT&T, Ford, Northwestern Mutual Life, 3M, UPS, American Standard, the federal governments of the United States and Canada are convinced that coaching works to develop people and increase productivity.

~ Consulting to Management, Sept. 2002

Corporations believe that coaching helps keep employees and that the dollar investment in it is far less than the cost of replacing an employee.

~ David A. Thomas
Fitzhugh professor of Business Administration, Harvard Business School

Employers are shocked at how high their ROI numbers are for coaching. He recalls a large employer in the hospitality industry saved between $30 million and $60 million by coaching its top 200 executives.

~ Alastair Robertson
Manager of worldwide leadership development, Accenture

In one 2004 study, executive coaching at Booz Allen Hamilton, the business consultants firm, returned $7.90 for every $1 the firm spent on coaching.

~ MetrixGlobal LLC, 2004

Coaching has become a $1 billion a year industry in the US. Some surveys indicate that half of all businesses now employ coaches.

~ J. Robertson
The Dallas Morning News, Aug. 2005

We've done lots of research over the past three years, and we've found that leaders who have the best coaching skills have better business results.

~ V.P. of Global Executive & Organizational Development at IBM

Executive Coaches are everywhere these days. Companies hire them to shore up executives or, in some cases, to ship them out. Division heads hire them as change agents. Workers at all levels of the corporate ladder are enlisting coaches for guidance on how to improve their performance, boost their profits, and make better decisions about everything from personnel to strategy.

~ TIME Business News

The Manchester survey of 140 companies shows nine in 10 executives believe coaching to be worth their time and dollars. The average return was more than $5 for each $1 spent.

~ The Denver Post, September 2, 2001

Recent studies show business coaching and executive coaching to be the most effective means for achieving sustainable growth, change and development in the individual, group and organization.

~ HR Monthly

Xerox Corporation carried out several studies on coaching. They determined that in the absence of follow-up coaching to their training classes, 87% of the skills change brought about by the program was lost. That’s 87 cents in the skills dollar. However good your skills training in the classroom, unless it’s followed up on the job, most of its effectiveness is lost without follow-up coaching.

~ Business Wire, July 30, 2001

A study featured in Public Personnel Management Journal reports that managers (31) that underwent a managerial training program showed an increased productivity of 22.4%. However, a second group was provided coaching following the training process and their productivity increased by 88%. Research does demonstrate that one-on-one executive coaching is of value.

~ F. Turner, Ph.D. CEO Refresher

The Business demand for coaching is nearly doubling each year. Out of the $80 billion being currently spent on corporate education, FLI Research estimates that $2 billion is spent on executive coaching at senior executive levels in Fortune 500 companies.

~ Business Wire 2003

Demand for executive coaching has been booming as more company executives and small business owners seek the service. Many consulting and training firms state that within the past year, the number of requests they have received for executive coaching has increased by 60 to 80 percent. A recent study showed that coaching now accounts for around 20 percent of their business, when two years ago it was 5 percent...More executives are beginning to request the service for themselves…as the negative connotation of coaching as a form of punishment for poor performance is replaced by the growing perception that coaching can help an individual or group to build sustainable professional and personal skills, better learn, overcome challenges, reach stretch goals and integrate leadership training.

~ US Careers Journal, May 2003

Business Coaching is needed today more than ever as a critical tool for organizational change... Change is essential for an organization to grow and adapt to today's rapidly shifting marketplace...In changing from old hierarchical models to relational models for leading and influencing, businesses are creating coaching cultures that encourage organizational learning. Coaching has emerged as the best way to help individuals learn to think and work together more effectively.

~ Georgetown University, Center for Professional Development. 2003

What's really driving the boom in coaching, is this, as we move from 30 miles an hour to 70 to 120 to 180...as we go from driving straight down the road to making right turns and left turns to abandoning cars and getting on motorcycles...the whole game changes, and a lot of people are trying to keep up, learn how, not fall off.

~ John Kotter
Professor of Leadership at the Harvard Business School

Booz, Allen & Hamilton's Ed Cohen, Director for Professional Excellence says; "We hire outside certified coaches to help our executives fill in minor gaps that may not have shown up earlier in the person's career because those skills may not have been the ones that were needed to help them rise to their present level.

~ The Edge, 2003

…business coaching, a trend that's exploding among small businesses and organizations nationwide. It's estimated that up to 20% of American small businesses are using them, up from 4% just four years ago and between 25 percent and 40 percent of Fortune 500 companies use executive coaches...

~ Time Business News

National and global companies are looking for highly trained organizational coaching graduates who have experience with international business practices and cultures, who are committed to people development, and understand the importance of the bottom-line...

~ Financial Times

Business coaching is a major growth industry. At least 10,000 coaches work for businesses today, up from 2,000 in1996. And that figure is expected to exceed 50,000 in the next five years. Business coaching is also highly profitable; employers are now willing to pay fees ranging from $1,500 to $15,000 a day.

~ The Economics of Executive Coaching
Harvard Business School Journal, July 2002

Executive and Business coaching is growing by about 40% a year.

~ The Economist, December 2002

…many executive coaches sell themselves as purveyors of simple answers and quick results... The idea that an executive coach can help employees improve performance quickly is a great selling point to CEOs, who put the bottom line first. Yet that approach tends to gloss over any unconscious conflict the employee might have. This can have disastrous consequences for the company long term and can exacerbate the psychological damage to the person targeted for help...Unless these Executive coaches have been trained in the dynamics of Interpersonal relations, however, they may abuse their power often without meaning to...To best help their executives, companies need to draw on the expertise of executive coaches with legitimate skills.

~ Harvard Business School Journal, July 2003

Employees at Nortel Networks estimate that coaching earned the company a 529 percent "return on investment and significant intangible benefits to the business," according to calculations prepared by Merrill C. Anderson, a professor of clinical education at Drake University.

~ Psychology Today, January 2003

Kodak has initiated a coaching program focusing on employee productivity and retention for a 1,000 employee unit. The coaching results obtained to-date confirm double-digit productivity increases.

~ Society for HR Management, 2003

Executives in this study believe that the top three personal characteristics of an effective executive coach are the ability to form a strong "connection" with the executive, professionalism, and the use of a clear and sound coaching methodology. Fifty-six percent of the executive group focused on personal behavior change, forty-three percent identified enhancing leader effectiveness, forty percent focused on building stronger relationships, seventeen percent used the coach for personal development, and seven percent used their coaching sessions to work on better work-family integration. Coaching helps Vodafone to change its command and control culture to one based on coaching and collaboration. This report states that coaching was the prime reason for the company's ascension to the top rung of its industry. The company instituted one-to-one coaching and coaching skills training and has created a coaching culture from the top down. Coaching also increased manager recognition of staff development as a key role to success.

~ Human Resource Management International Digest, November 2003,
1, 31-33

...business coaching, a trend that's exploding among small businesses and entrepreneurs nationwide. It's estimated that up to 20% of American small businesses are using them, up from 4% just four years ago.

~ Chicago Business