Establishing the ROI of an Executive Coaching Engagement

If engaging an executive coach is considered by an organization's leadership to be an investment in particular executives, or an executive team, rather that an expense, then how is  the return on that investment to be measured and tracked? And how is the payoff of the investment to be assessed and validated? 

Some executives will admit to being skeptical that arriving at a measurable ROI for executive coaching is doable. A legitimate concern expressed is, "how do we distinguish the impact of coaching from the myriad of other factors that can and do impact change in an executive or team's performance, and therefore the ROI of a coaching engagement?"

My speculation is that because this question not asked, and answered, is the principal reason that every executive does not have a coach as a matter of course. Every executive who has a P&L accountability, or who leads a team, or who is accountable for innovation, for..., in fact any specific desired outcome - is without a coach is because the question of the return on investment is not clear. 

Short of not being able to afford an investment in executive coaching - not the case for most large organizations - the only other reasons to not have executives coached are:

1) A belief that a particular executive, or the executive team, is  not coachable - which begs the question, "And you retain people who are not coachable because...?

2) An assertion that our executives will not discover anything they don't know already from being coached. Our executive know it all already

3) The question of return has not been asked and answered, leaving the sense that coaching is an avoidable expense with unquantifiable benefit rather than an investment with a return.

So how do we go about measuring ROI? Here are some key steps:

1) Establish the executive's accountabilities - expressed as what specific measurable desired results (not activities), are to be delivered to whom, and by when?

2) Establish the resources the executive will have at his/her disposal

3) Forecast the likely results the executive is likely to produce: given history, and plans and projects in place, expressed as the most likely case and best case predictable outcomes

4) Create (by declaration) a set of outcomes, beyond the most likely case, as the context for coaching. And outcomes, that if/when achieved would show an ROI of ... - complete that sentence

5) These outcomes that will be expressed as a coaching plan: with milestones, tracking and reporting mechanisms.

In effect the outcome to be achieved, that when achieved, will produce a return on investment that makes the investment worth while, is established at the outset of the coaching relationship. With the ROI criteria established it is a relatively easy monitoring and tracking process to determine that the anticipate returns are being met. 

How to work in this declarative, future first, context is part of the content of the LPR coaching program.