THE NEED
FOR COACHING
AND ITS VALUE
A series of corporate developments has intensified the demand
for effective executive coaching programmes. In recent years, a
further spur has been provided by growing evidence that coaching
offers considerable return on investment (ROI).
One influential corporate trend is Intellectual Property (IP)
differentiation, specifically the ability of a company’s senior
executives to add value through innovation and inspiration.
Coaching can play an obvious role here.
An additional stimulus for growth is provided by specific
corporate actions such as restructuring following a merger or
acquisition. Alignment of leaders and leadership teams with
post-merger objectives is a core competence for leading business
coaching practitioners, including Change Partners.
In South Africa, special factors sharpen the need for effective
coaching of current and future leaders. A particularly worrying
problem is the ‘brain drain’, notably as it affects managerial
talent. In this scenario, further investment is often warranted
to improve the effectiveness of scarce executive resources.
Understandably enough, many major corporates today see coaching
as an integral part of their talent retention strategies. The
value placed on senior people is tellingly demonstrated by
inclusion in a structured coaching programme.
Locally, the need to become globally competitive has driven
companies to adopt lean structures. This means the phenomenon of
the Lonely Leader (apparent in business sectors worldwide) has
special cogency in South Africa.
Lean structures and a depleted senior tier can entrench the
leader’s isolation. This carries with it the danger that the
Lonely Leader may be cut off from the oxygen of new ideas.
The capacity of an executive coach to stimulate new thinking
becomes even more vital in a situation such as this.
The pace of change may also have accelerated coaching demand.
Corporate South Africa is undergoing an exciting transformation
as a new generation of executives moves into senior positions.
They contribute fresh perspectives and new energy, but require
support and a chance to quietly articulate and debate ideas with
a trusted confidant.
In such cases, coaching can be a highly effective tool for
leveraging both personal and corporate growth.
The above factors underpin coaching demand while international
ROI studies add further impetus.
As a rule-of-thumb, international experience suggests the return
on investment is almost six times the cost of an executive
coaching programme. A 2001 study by Manchester Consulting Inc
(later re-verified) put ROI at 545%. ROI in an evaluation by
MetrixGlobal LCC was a tad lower at 529%.
Another study, conducted by an organisation that had adopted a
coaching programme, concentrated on performance improvements. It
found that training resulted in a 20% improvement while coaching
led to an 80% gain.
These studies consider a wide range of issues, but putting
monetary values to programme success – whether in South Africa
or elsewhere – is notoriously difficult.
The value (or premium) placed on leadership performance,
improved talent retention and the quality of ideas in the
executive suite will vary case by case. Change Partners’
response is to encourage clients to obtain maximum value through
total engagement in a rigorous, transparent and measurable
process.
Whatever the value, optimise it.
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