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Why Companies Invest in Executive/Leadership Coaching

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May 2nd, 2017

- Updated on

March 6, 2018 - 4:20pm

Conference Board Executive Coaching 2016 Survey Shows a Decade of Growth and a Strong Future

The Eagles’, “New Kid in Town” rang out as Andy O’Connor introduced new team members and kicked off April's Coaches Forum, an AJO network that meets every six weeks. Last month's meeting attracted 22 AJO coaches and staff, six AJO clients and our special guest speaker, Amy Lui Abel, Managing Director, Human Capital at The Conference Board. The combination of The Conference Board’s 2016 Global Executive Coaching Survey game and prizes made for a lively Forum.
 
AJO Coaches Forum

The Hallmarks of Coaching Success

“Coaching has experienced astonishing progress since our first study in 2006,” commented Amy Lui Abel, Managing Director of Human Capital at The Conference Board. “It’s only been 10 years and we can share four significant hallmarks of success:”

  • Focused, enterprise-level management of coaching – we’ve transitioned from "The Wild West of Executive Coaching” (remember that article?) to a centralized, controlled and standardized pricing and practices across organizations and industries.
     
  • Standards for coach qualifications & compensation – emphasis on formal training, credentials, certification and commoditization to standardize rates.
     
  • Greater alignment and buy-in – no longer is coaching for people with one foot out the door. Coaching now has senior leadership buy-in as a company strategy, and is future-focused coaching of high-potential leaders.
     
  • Scaled through – companies are increasing their use of internal coaching and outsourcing to coaching management companies.

How Does Your Coaching Program Measure Up?

Five significant themes/trends are identified by The Conference Board’s bi-annual survey that showcases best practices in 181 organizations who participated in 2016.
  1. Growth of Development Coaching – No longer is poor performance or a job transition the primary reason coaching is being used in organizations. Companies are targeting both internal and external coaching (77% & 88% of organizations respectively) at development or future-focused coaching to develop leaders and leadership capabilities at all organizational levels. And the data also shows an increased demand for transition coaching in the future. Transition coaching is defined as accelerating an individual's transition to a new internal role (i.e., new location, line of business and/or function.) 

    Conference Board - Types of Coaching 2016 Study

  2. Executive Coaching ROI Tough to Measure – “It must be tough or we would have figured it out already.” Companies report moderate confidence in their evaluation of coaching. Evaluation methods remain rudimentary for assessing the impact of Coaching, with most organizations doing formal and informal conversations with key stakeholders (75%). While at least 40% of organizations are assessing satisfaction levels after coaching, only 20% of companies are attempting to tie coaching impact to business performance, such as revenue or operational metrics.

    Two companies on the forefront of measuring ROI:

    • Google is attempting to measure Return on Investment (ROI) of coaching. Having previously included too many variables to isolate the impact accurately, Google opted for an aggregate view including engagement surveys, stakeholder feedback and post-coaching ratings. 
       
    • L-3 Communications, USA, a defense contractor, is requiring coaching agreements that outline expectations in cost savings, time savings, team achievements and other milestones.
       
  3. Companies continue to invest in external coaching, especially for senior leaders, with consistent spend over the last couple years. Of the 181 companies in the study, most are spending less than $500,000 per annum on coaching. Global coaching rates have moved closer to US rates and it’s theorized that global contracts are helping to control costs.
     
  4. Controlling cost/reducing spend is not the key driver for internal coaching. While 69% of companies are relying more on internal coaches, the drivers are:
    • Internal coaches' better understanding of the business culture
    • Wanting to develop leaders lower in the organization
    • Increased demand for coaching.
Conference Board Executive Coaching Study 2016 - Drivers of Internal Coaching
Since charge-backs are not common, internal coaching has become a preferred low-cost tool for developing more leaders. Google now has 350 internal coaches (gurus) in 60 offices around the world.
 
       5.  Increased focus on developing Coaching Cultures – Companies are integrating coaching to address four key trends:
  • A looming labor shortage
  • Millennials’ need for continuous feedback
  • Need to spur innovation
  • Redefinition of Performance Management Systems
Conference Board Executive Coaching Study 2016 - Developing Coaching Cultures

58% of Tweet: 58% organizations integrate coaching behaviors to talent management processes. 50% develop coaching skills at all levels #coaching #leaders organizations are integrating coaching behaviors into their talent management processes and 50% of companies are developing the coaching skills of leaders and managers at all levels.

 
 
Amy Lui Abel of The Conference BoardThanks to Amy Lui Abel, Ph.D. Managing Director, Human Capital at The Conference Board for a lively and engaging presentation. Amy is former Director of Leadership Development at global financial services firm, held roles at global organizations such as Accenture, MorganStanley, Adobe Systems, and JP Morgan. Amy is published in Handbook of Coaching in Organizations (Jossey-Bass), HRDQ Journal, People & Strategy Journal, and The Handbook for Workplace Learning (Sage Publications). Amy received a Ph.D. in organizational learning and performance from New York University.