Return on Investment
As coaches we need put in place tools that allow organisations to evaluate coaching programmes as if they were capital investments. By starting to analyse your coaching programmes as if they were capital investments – using techniques like ROI – powerful cases can be presented to leverage further investments for additional performance.
Measuring the Benefits
The benefits of coaching include the executive reactions, the amount of learning that has been achieved; and the extent to which behaviour has changed.
However, the financial benefits come from assessing how these lead to improved performance – traditionally the hardest coaching outcome to forecast or measure. Because of the subjective nature of this process, the results of many L&D programmes aren’t converted into monetary units. Yet, this conversion is an essential step in ROI calculations in which monetary benefits are compared with costs.
ROI Impact Study
The purpose of an Impact Study is to demonstrate that the coaching had both a positive benefit and financial impact on individuals who participated in the programme as well as the organisation as a whole. The ROI Impact Study not only assesses the impact of the current programme, it also informs future Leadership Development programmes to meet specific business needs.
The ROI methodology used is a rational and logical approach based on almost 20 years of development and improvement. Measuring ROI is a topic that receives much debate: for some it is characterised as flawed and inappropriate whilst for others it is the only way that true accountability can take place for development programmes. Measuring the ROI of development programmes is becoming a common discussion topic for both measuring effectiveness and tailoring future events to deliver further improved results.
A framework, based on the best practice work of the ROI Institute, covers the 5 levels for measuring the success of the programme, providing hard evidence for the value of the programme. The key intangible benefits are also recorded:
- Reaction & planned action
- Coaching Evaluations
- Learning
- Progress made to Goals
- Application
- Feedahead® – what are they doing differently
- Business impact
- Collect and record relevant benefits and costs
- Return on investment calculation
