Professional business coaches will serve your business in a number of different ways. But, to understand the success of this coaching, you’ll want to be able to measure the return of investment and identify exactly where progress has been made. Without understanding how to track progression, you see improvement and you may feel as though your business coach isn’t providing the level of service you were expecting.
Of course, the return on investment will vary dependent on the desired outcome of your company. However, it’s important to understand why coaching could work for you and what sort of increase you should see from your expense. So, in this article, we’ll be looking at where you might expect to see the highest levels of ROI and what this could mean for you.
What does ROI (return on investment) mean for a business?
Return on investment is defined as the financial ratio of the benefit an investor will receive in relation to their initial investment cost. The higher the ratio, the greater the benefit earned. The two most common formulas to work out this ROI are:
ROI = Net Income / Cost of Investment
ROI = Investment Gain / Investment Base
However, it can be difficult to define the investment gain as a business return of investment may also be seen in softer measurement areas such as job satisfaction, employee retainment and so on. Therefore, you need to identify methods to ensure you can track the success of the professional business coaches you utilise to measure how effective their strategy is. If you are unable to track this, you may continue to work with the wrong coach and miss a range of opportunities for significant growth.
A coach should be asking you a variety of questions to understand what your goals are and what you expect to get out of your sessions together. These may include:
- What is the outcome you expect from coaching?
- What will become possible when you achieve this outcome?
- What is that worth to you?
- What will happen if you don’t reach this goal? What will that cost you and the organisation?
- How much does it cost to replace someone in your organisation? (understanding the current turnover expense)
- How much stress are you feeling at the moment? And what would it mean to you if we could eliminate this?
These can act as true measures of ROI, the key is to outline your expectations and answer these questions openly and honestly. By doing so, your coach will understand what is most important to you and they’ll be able to create a report or goal that tracks progression and highlights the return of investment – though this may not be in the more traditional sense.
How can professional business coaches transform your business?
Before we look into some statistics, let’s look at how exactly a coach can help your business thrive. There are a variety of different benefits when using a business coach from work-life balance to employee retention but these can be seen as difficult measurable outcomes as they are not hard outcomes. However, with the employment of SMART targets, you build a full picture and successfully evaluate how coaching has transformed your business.
#1 Build actionable plans to get results
It can be difficult to create a task list that propels you towards your desired outcomes; but, a business coach can ensure you remain focused and separate your goals into smaller, more manageable targets. You’ll be able to then see when you reach the next milestone and track your progress against this scheduled plan. Simply identifying you wish to boost sales by 25% does little to motivate change, you need to know exactly the route in which you hope to get there.
#2 Implement new processes
An effective business coach will come to you with essential, relevant experience and they will have suggestions that could be successfully integrated into your own business. Of course, a coach acts as a guide rather than the driving force but, this experience will provide you with insight into what may or may not work for you. And, this could be the difference between success and failure.
#3 Constructive feedback from outside your organisation
Sometimes, you need the perspective of someone that is not directly involved in your organisation. A business coach can offer insight and feedback that those within your business may not have recognised as an area for development. It can also stop any small disagreements from negatively impacting the culture of your company.
#4 Boost productivity and as a result, profits
A business coach can identify where there is room for improvement within your business – perhaps there is a long-winded process that is slowing your employees and therefore, halting productivity levels. They may be able to suggest and offer advice to eradicate these hold-ups, ultimately motivated your staff more and boosting productivity. When your team are working effectively and to their optimal capacity, you will see the repercussions through an increase in profits.
#5 Leave your comfort zone
You’ll be asked a variety of different questions by your business coach and these will force you to get into the nitty-gritty of your organisation. It can often seem like a struggle to answer particular questions, but these are vital to get to the heart of what makes you tick. In addition, your coach may suggest innovative ideas that challenge you to experiment. Remember, these experiments may reveal a solution to a difficult problem so whilst it could be frightening to open up it has a variety of benefits in the long term.
#6 Create a balance between your work and personal life
Professional business coaches will assist you to take a step back – it’s easy as an owner to constantly think of work, but this is unsustainable in the long term. This is perhaps one of the most valuable non-measurable areas of coaching, as you’ll be able to spend more time with family and friends. Can you put a price on that?
#7 Build up your network
It takes years of dedication, effort and time to build up a strong network. Working with a business coach will see you access a range of new contacts which could lead to new sales, suppliers or advisors. Whilst there may be no immediate return on investment, the long-term effect of these new connections will be major.
#8 Assist with job satisfaction
Following on from a work-life balance, if you as a business owner are less stressed and concerned so to will your employees be. You’ll be leading by example, and what’s more by actively taking an interest to develop your organisation, your staff will, as a result, become more motivated to help realise the end goal you’ve set. Your workforce is essential to your success, so if you can boost their morale and improve productivity by including them in the transformation, you’ll be further aiding your organisation’s success.
The hard statistics
So, what has research found to be the ROI from professional business coaches? Let’s delve into some of the hard statistics that showcase how coaching can significantly help you:
- A Fortune 500 company found that 77% of respondents indicated that coaching has an impact on at least one of nine measures. In all, the study concluded that executive coaching produced a 788% ROI, or a 529% ROI when excluding the benefits of employee retention. (Executive Briefing: Case Study on the ROI of Executive Coaching, Merrill C. Anderson, PhD, MetrixGlobal, LLC)
- Manchester, Inc. surveyed 100 executives, most of which were from Fortune 1000 companies. Their research showed that a company’s investment in coaching realized an average ROI of almost six times the cost of the coaching. (Maximizing the Impact of Executive Coaching, The Manchester Review, 2001, Volume 6, Number 1, Joy McGovern, et.al.)
- According to the International Coaching Federation (ICF), 86% of organizations saw an ROI on their coaching engagements, and 96% of those who had an executive coach said they would repeat the process again.
- Other studies indicate positive ROIs as well:
- Improved executive productivity (reported by 53% of executives)
- Improvements in organizational strengths (48%)
- Gains in customer service (39%)
- Increased retention of executives (32%)
- Enhanced direct report/supervisor relationships (>70%)
- Improved teamwork (67%)
- Improved peer-to-peer working relationships (63%)
- Great job satisfaction (52%)
These figures highlight just how effective business coaching can be; there is significant research into business coaching and we can see just how much of a positive effect this has had on a variety of different companies above.
Looking for professional business coaches?
Business coaching can be a highly effective tool for business owners to utilise. Of course, this may not suit every company but it’s clear to see the methods and advice provided by a coach can have a significant impact on the success of your organisation. Whilst the initial expense may seem worrying, this is little when you consider the long-term return on investment. What’s important, however, is that you think of coaching as a journey, not a short-term overnight fix.
Are you in search of a professional business coach that will provide you with results? Do you want to see how together we could transform your business? Don’t delay. Contact me at email@example.com or complete this contact form, and reach your business’s full potential now.