Benefits Include Enhanced Organizational Performance and Bottom Line
More than ever, organizations are using executive coaching to enhance performance across the enterprise by grooming high potential employees, while also supporting high-performing executives and leadership teams, according to a new study, Trends in Executive Coaching: New Research Reveals Emerging Best Practices. The research findings were released today by DBM, a global outplacement, coaching, and career management firm and the Human Capital Institute (HCI), a global professional association and educator advancing the science of strategic talent management.
The study of nearly 500 top business and human capital leaders shows that the demand for executive coaching services is growing due to increased credibility and demonstrated impact on the enterprise. The vast majority of respondents (78%) view coaching as a credible and effective way to enhance an individual’s effectiveness in driving the performance of an organization. Key findings include:
— Organizations are benefiting from a high return on investment (ROI) for executive coaching.
— More than three-quarters of enterprise executives view executive coaching as credible and valuable.
— Investment in coaching is on the rise as organizations strive to build ready pipelines of talent.
Organizations benefit from a high return on investment (ROI) of executive coaching.
“DBM’s research reinforces that executive coaching can generate significant rewards within an organization,” said Karen O’Boyle, President of DBM North America. “Businesses that invest in human capital by effectively leveraging executive coaching to groom talent throughout the enterprise are witnessing a significant impact on both operational excellence and the bottom line.”
Of the study respondents who calculate ROI, 77% believe that executive coaching provides their organizations with a solid return. These individuals estimated levels ranging from a minimum of 100% ROI to more than a 500% return.
The research found that organizations are using a combination of metrics and qualitative factors when evaluating the success of executive coaching. Organizations measuring direct financial impact most often track:
-- executive output (33%), such as sales revenue and productivity
— quality improvements (23%), such as increased reliability or decreased defects
-- cost savings (23%)
-- turnover (21%)
In addition to tracking direct evidence of financial return, organizations also considered a variety of qualitative factors when measuring the impact of coaching. These included:
-- achievement of agreed upon development objectives (84%)
-- anecdotal evidence of success (83%)
-- assessment from the coach (82%)
-- other people's perceptions of the coachee (79%)
— coachee’s ability to be promoted or to take on new responsibilities (74%)
A majority of enterprise executives (78%) view executive coaching as credible and valuable.
“Executive coaching has become an ideal talent management tool for increasing business performance and making a company’s best people better,” said Peyton Daniel, Senior Managing Director & Coaching Practice Leader for DBM North America. “Years ago, organizations hired coaches only to support their top tier executives or to ‘fix’ bad hires. These days, coaching is viewed as very positive and demonstrates an organization’s commitment to the employee’s success in both current and future roles. Furthermore, coaching is increasingly provided to mid-level executives, as well.”
According to the study, the business community has embraced executive coaching as a versatile leadership development tool that can be used to proactively enhance the effectiveness of already high-performing and capable executives.
Interestingly, organizations reported that the predominant use for coaching is to address derailing behaviors. However, when asked to rank the top circumstances where executive coaching has the greatest impact, “addressing derailing behaviors” placed third. The top three opportunities for coaching engagements that can have the greatest impact include:
1) developing "high potential" candidates for succession planning (29%)
2) helping a capable executive achieve a higher level of performance (28%)
3) addressing derailing behaviors (22%)
Investment in coaching is on the rise.
Organizations are planning to increase their investment in coaching, specifically in order to build a ready pipeline of talent and ensure top talent achieves mission-critical objectives. Future investments are shifting due to evolving outcomes desired, according to the study.
Organizations on the whole plan to increase their use of coaching in order to:
-- groom high-potential employees (62%)
-- help capable executives achieve higher levels of performance (58%)
-- enhance the effectiveness of leadership teams (48%)
-- provide on-demand coaching for short-term, targeted situations (44%)
The most significant planned decreases in the use of coaching, according to survey respondents, include:
-- addressing derailing behaviors (14%)
-- guiding career decisions (12%)
“Executive coaching is clearly an important tool for organizations seeking to embrace the talent economy,” said Allan Schweyer, Executive Director and SVP of Research at HCI. “Talent management executives recognize that executive coaching can not only enhance situational learning, but also lead to enhanced performance and a competitive advantage in the marketplace.”
About the Study
DBM conducted a research study in partnership with the Human Capital Institute on trends and emerging best practices in Executive Coaching. The 472 respondents were from a wide cross-section of industries and were comprised of HR Business Partners (32%), top Human Resources Executives (26%) and the remainder in Organizational Development and/or Training/Development roles (42%).
DBM is a leading global outplacement, coaching, and career management firm providing services to private and public companies, not-for-profits and governments. Visit http://www.dbm.com to learn more.
The Human Capital Institute is a global network of more than 115,000 members in 40 countries committed to shaping the world’s new talent economy. Visit http://www.humancapitalinstitute.org to learn more.
David Keathley of DBM, +1-404-325-4100 , email@example.com Web Site:
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