Executive Coaching – Should You Invest?

As a business person or the leader of any organization you know that every dollar you spend must return a significant ROI. Executive coaching fees start at $200 per hour and can go as high as $3,500 per hour according to a 2009 Harvard Business Review article by Diane Coutu.

Is it worth it?

The answer: It depends.

It depends on whether or not the executive is willing to put in the work required to create positive change. It depends on whether or not measurable goals were agreed to before the coaching began.

Coaching is still a very new arena, filled with a wide variety of practitioners, many doing coaching in very different ways. The vast majority of coaching users find success when they find a coach that works for them and sets measurable goals for their relationship.

If you love numbers before you are willing to embark on something that can be as costly as coaching here are a few:

The graph below shows the results of 2009 PriceWaterhouseCoopers study on coaching effectiveness. 2,165 coaching clients from 64 countries were surveyed. A very interesting finding of the study was that most respondents were unable to determine the financial return on investment for their company – most coaches don’t set up their projects to provide a measurable ROI and most executives don’t know to ask for it. But, of those executives that had ROI data on the coaching experience, the results were very impressive.

  • Median company ROI of 7x the investment
  • 28% saw an ROI of 10-49x the investment
  • 19% reported an ROI of at least 50x the investment

Qualitative factors seem to be how most coaching effectiveness is measured. Below are the qualitative results from the study.

In summary, the evidence shows that there can be a clear ROI for executive coaching in your firm if, and only if your executives are ready to change. Coaching can and often does fail. Check out my article on the 5 Reasons Coaching Fails to learn how you can avoid the most common traps.

Thank you for being a part of our values driven community!

Graphic courtesy of http://hbr.org/2009/01/what-can-coaches-do-for-you/ar/1 and the Global Coaching Client Study – June 2009.

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