There is too much confusion regarding return on investment (ROI) for your investment in business coaching.
Let me clear the confusion by describing two sides of the ROI coin, and share an example of a coaching client who demonstrated a 300 % ROI from his investment.
One side of the ROI coin states “If you cannot demonstrate ROI from any initiative, then it will not be funded.” That makes business sense, and has defined most decision-making models. Examples abound from Peter Drucker’s famous maxim “If you cannot measure it then it does not exist” to Alan Weiss’ maxim “The only measure that matters is improved results of the client’s condition.” My corollary is, “Behavorial outcomes or performance outcomes can always be measured quantitatively (with numbers) or qualitatively (with descriptions).”
The other side of the ROI coin states that human behavior is inherently complex and unpredictable, therefore measuring that complexity is impossible. The notion of accurately measuring the impact of that change is impossible (even with artificial intelligence gathered from big data sets.) My corollary is, “The pace of change is slower today than it will ever be in the future, so respond to the challenges today.” What are you waiting to measure? Organizational psychologists distinguish between True Measures (T, an absolute from Aristotle), actual measure (t) and degree of error (%e). One formula to measure that complexity is T = t(%e). The main point is that complexity can be measured within ranges of acceptable error.
My experience is that ROI can be measured and must be measured. Here is the formula that I use, adapted from my good friend John Mattox’s (2016) book, Learning Analytics; Measurement innovations to support employee development. (Yes, my testimonial is on the back cover. I strongly encourage anyone interested in ROI to purchase and study this book.) Another great resource is the ROI Institute, founded by Jack and Patti Phillips.
Here is version 1 of the formula I use: ROI = (benefits-cost)/ cost. For instance, if the benefits of coaching investment for 12 months are $20,000 in new revenue, and the cost of coaching was $10,000, then the ROI of that investment was ($30,000-$10,000) or $20,000/ $10,000 or 200%. Pretty impressive ROI, right? But coaching was not the only reason for that new revenue of $30,000, therefore that 200% ROI number is not valid.
Version 2 of the formula I use is ROI = (benefits x % attributed to outcomes)/ cost. For instance, if the benefits of coaching investment for 12 months are $30,000 in new revenue, and the percent attributed to coaching was 40%, and the cost of coaching was $10,000, then the ROI of that investment was ($30,000 x .40 = $12,000-$10,000) or $2,000/ $10,000 or 20%. A more accurate assessment, perhaps, but 20% ROI is not as impressive. Version 2 is also called adjusted ROI.
Here is a real example from one of my clients that illustrates how to assess the ROI of business coaching:
2015
2016
2017 (expected)
Products
$200,000
$190,000
$250,000
Services
$20,000
$55,000
$70,000
$220,000
$245,000 (+10%)
$320,000 (+23%)
% attributed to coaching
20% ($44,000)
20% ($49,000)
20% ($64,000)
– Cost of coaching
$12,000
$12,000
$12,000
ROI of coaching
367 %
408 %
533 %
The bottom line?
The ROI of your business coaching investment can be measured based on behavioral outcomes and performance outcomes.
2. The ROI of your business coaching investment with Action Learning Associates is guaranteed to be positive. Since 1997, we have provided that guarantee, and it has been true 100% of the time.
The American educator John Dewey (1938) stated, “We do not learn from experience… we learn from reflecting on experience.” That fact remains unchanged (for at least the last 79 years) because it describes the need to reflect on how leaders develop. For instance, a leadership shortage may be described by demographic shifts (millennials or global diversity), insufficient training (after promotions) or discouraging mindsets (low engagement or trust measures). In response to that shortage, leaders need to practice desired behaviors more frequently (Kouzes & Posner, 2016). Consider this example. When I recently asked a room full of leaders, “How many of you describe yourself as a leader?” only about 10% raised their hands. My experience is that many potential leaders do not regard themselves as leaders, largely because they do not trust their personal experiences. Leaders can learn from experiences, but not all experiences are meaningful (Yip & Wilson, 2010). This short paper explains how the two top processes of leader development can be applied to executive leadership. Those two processes, 1) challenging assignments and 2) developmental relationships, described 64% of leader development experiences in the United States 24 years ago (McCall, Lombardo & Morrison, 1998) and are just as critical today.
Challenging assignments
As a species, humans have always adapted to environmental stimuli. As leaders, humans adapt to environmental stimuli with internal change (Schein, 2010). When I ask leaders to share their “personal best leadership story” the results may range from parenting to global reorganizations. The unifying characteristic of those stories is that they describe challenging assignments; all leaders model initiative, take risks and innovate new behaviors (Kouzes & Posner, 2016). One useful framework for practicing more leadership behaviors includes these five steps: 1) model the way, 2) inspire a shared vision, 3) challenge the process, 4) enable others to act, and 5) encourage the heart (show appreciation and celebrate successes; Kouzes & Posner, 2016). That framework focuses on learning leadership behaviors, like a road map, and consequently I have shared that framework with dozens of executive leaders. Any leader cited throughout history (in any reference book or in any story) has embraced challenging assignments.
So, what are useful challenging assignments? Yip & Wilson (2010) list five types of assignments; 1) increase in job scope, 2) creating changes, 3) job rotation, 4) stakeholder engagement, and 5) cultural exchanges. Examples of an increase in job scope include redesigning roles or responsibilities, adding people or budget to a current assignment, a career succession pipeline or a job succession ladder. Examples of creating change abound as leaders respond to technological changes, market adaptations, global choices of suppliers and providers, diverse stakeholders, demands for improved efficiency, effectiveness or new outcomes. Examples of job rotation include formal systems with regular shifts, as physicians and healthcare leaders often do when training, or informal rotations when leaders shadow colleagues in a different work group or culture. Examples of stakeholder engagement include cross functional teams (sales and operations) or new market negotiations (vendors, clients, government officials) designed to develop awareness of cultural complexity and the need to negotiate desired outcomes. Examples of cultural exchanges include foreign assignments, foreign responsibilities, cultural awareness assessments, organizational culture development, language skills, and understanding of global leadership behaviors.
The next question may be, “how do leaders increase their probability of success in challenging assignments?” The answer includes feedback from developmental relationships.
Developmental relationships
No leader succeeds alone. We all need meaningful relational feedback such as coaching, peer or group mentoring, or one-on-one mentoring. Yip & Wilson (2010) list three types of developmental relationships; 1) constructive managers, 2) difficult relationships, and 3) other venerated leaders. Examples of constructive managers include regular one-to-one feedback sessions, performance reviews, based on critical organizational competencies or developmental states validated by a career development plan. Examples of difficult relationships are those conflicts or disputes that were handled poorly, remain memorable as instructive reminders of “what not to do next time”, or lessons from unethical or inappropriate behavior. Examples of relational feedback from other venerated leaders may include a mentoring session from an elder or historically wise leader, or an exemplary role model in a community or organization.
How do leaders increase developmental relationships? The most effective answer is to actively seek out wise mentors and regularly ask for feedback. As Kaplan (2007) states, the person in the mirror may be able to respond to seven key questions with candid feedback. However, my experience is that executive leaders require external, objective relationships with experienced mentors and coaches who can “speak truth to power” or model new desired behaviors. The most requested topics for executive coaching engagements have not changed for many years; those topics are (1) executive presence and influencing skills, (2) ability in leading teams and people development, and (3) relationship management (TCB, 2014). Managers and supervisors may be able to provide insights into those topics, but only executive coaches can observe and recommend new desired behaviors.
The coach training industry is now estimated at 53,500 global coach practitioners and over $2B in annual revenue, with 115 accredited coach training programs (ICF, 2016). The International Coaching Federation (ICF) hosted the largest global survey (n=15,380, with 38% non-members) of coaching practitioners (internal, external or both) and managers or leaders using coaching skills (within Human Resources, Talent Development, or any line of business; ICF, 2016). That survey identified the top future obstacles for coaching as (1) untrained individuals and (2) marketplace confusion (ICF, 2016). The survey also identified the top future opportunities for coaching as (1) increased awareness of the benefits of coaching, and (2) credible data on ROI/ROE/outcomes (ICF, 2016). Those findings suggest a significant need for research on the efficacy of coach training.
Conclusion
When Dewey revolutionized American educational systems, he caused leaders to challenge the status quo and provide developmental relationships for students. In a similar way, leaders have always accepted challenging assignments and sought candid, relational feedback of their performance. In recent months I have applied the model from Kouzes & Posner (2016) to several executive leaders because it focuses on frequency of desired leadership behaviors. If we assume that any leader needs to 1) model the way, 2) inspire a shared vision, 3) challenge the process, 4) enable others to act, and 5) encourage the heart (show appreciation and celebrate successes; Kouzes & Posner, 2016), then we can help more leaders to increase the frequency of desired leadership behaviors. In other words, we can help leaders practice leadership.
Contact Doug Gray, PCC, for details at 615.905.1892 today.
References
Dewey, J. (1938). Experience and education. New York: Macmillan.
ICF (2016). 2016 ICF Global Coaching Study; Executive summary. International Coaching Federation.
Kaplan, R. S. (January 2007). What to ask the person in the mirror. In On managing yourself (pp. 135- 156, 2010). Boston: Harvard Business Review Press.
Kouzes, J.M. & Posner, B.Z. (2016). Learning leadership; The five fundamentals of becoming an extraordinary leader. San Francisco, CA: Wiley.
McCall, Lombardo & Morrison (1988). The lessons of experience; How successful executive develop on the job. (reference not included in text, but cited on p. 64). In Velsor, E.V., McCauley, C.D. & Ruderman, M.N. (2010). Handbook for leadership development, 3rd Ed. San Francisco: Jossey-Bass.
Schein, E. H. (2010). Organizational Culture and Leadership (4th ed.). San Francisco, CA: Jossey- Bass Publications.
TCB (2014). The 2014 Executive Coaching Survey. The Conference Board, Report #R-1568-14-RR.
Yip, J. & Wilson, M.S. (2010). Learning from experience. Pp. 63-95. In Velsor, E.V., McCauley, C.D. & Ruderman, M.N. (2010). Handbook for leadership development, 3rd Ed. San Francisco: Jossey-Bass.
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The topic of leadership in virtual teams is increasingly popular, so this conversation requires a few definitions. Leadership can be defined as the act of influencing others through socially acceptable behaviors that encourage desired behavior and the pursuit of a common goal. Virtual teams can be defined as (1) physically dispersed people, (2) using some digital connectivity process or software, (3) with a shared task or outcome, and (4) some groupware, hardware or computer-mediated communication (CMC). An example would be four authors collaborating to design a website. The focus of this conversation topic is an exploration of leadership in virtual teams.
Research findings
Leading virtual teams has become a popular topic, with research focused on how virtual teams differ from face-to-face teams in terms of coordination, communication and collaboration (Malhotra, Majchrzak & Rosen, 2007). Special consideration has been placed on communication technologies needed to facilitate virtual work and knowledge sharing; however, the skills required to lead teams that have both geographic dispersion and innovation problem-solving challenges have received little research attention to date.
Researchers tend to agree that leaders of all teams, whether geographically dispersed or collocated, need to be engaged. Virtual teams are required to solve problems, adopt a range of responsibilities, including articulating a vision for the team, communicating that vision with passion, setting the executive plan and forming coalitions (Malhotra et al, 2007). Hence, leaders of virtual teams face some of the same issues as leaders of collocated teams. All teams struggle to maintain engagement levels when solving problems. However, leaders of collocated teams have the advantage of physical observation and can correct ineffective behaviors, or detect when the team needs a direct meeting to rebuild momentum, or when teams need to redirect resources; virtual team leaders do not have the same power of physical observation (Malhotra et al, 2007).
Virtual team leaders must establish norms, overcome team member feelings of isolation, build cohesion and motivate team members to make a major commitment to the team’s mission. Malhotra et al, 2007 recommend six practices for effective virtual team leaders, which are: (1) establish and maintain trust through the use of communication technology, (2) ensure that diversity in the team is understood, appreciated and leveraged, (3) manage virtual work cycle and meetings, (4) monitor team progress through the use of technology, (5) enhance external visibility of the team and its members and (6) ensure individuals benefit from participating in virtual teams.
Kayworth and Leidner (2002) identify effective virtual leaders as those who demonstrate the capability to deal with paradox and contradiction by performing multiple leadership roles simultaneously while demonstrating a high degree of empathy toward team members. They also state that highly effective virtual team leaders should adopt a mentoring role and assert their authority without being overbearing or inflexible (Kayworth & Leidner, 2002). Finally, an effective virtual team leader must be efficient at providing regular, detailed and prompt communication with subordinates and peers when articulating role relationships among the virtual team. One conclusion from this research is the critical need for virtual leaders to model engagement in the work process, as well as optimism that the team members can complete the tasks as required.
Gaps in the research
A notable gap in the research to date is the ability of leaders to develop and maintain engagement for members in virtual teams. Most team members are familiar with direct face-to-face contact, direct relationship building, trust development and subsequent knowledge sharing. Virtual team processes and technology may be less familiar to many team members. Several studies have examined the role of knowledge sharing and the impact of IT on the engagement of virtual team members, but the studies to date have focused on the dichotomy of virtual teams communicating through technology versus collocated teams not utilizing technology as their primary form of communication. The field would benefit from further examination into the leadership styles, competencies and activities that develop and support engagement and knowledge sharing in virtual teams on a continuous (e.g., what type of IT, frequency of use, level of use, level of user training, level of IT support, availability of technical assistance) rather than dichotomous (e.g., have or have not) basis.
Practical application
Engagement surveys. Multiple vendors and researchers have validated engagement surveys that help to assess engagement levels within teams. Examples include pulse surveys, exit surveys, customer engagement surveys, employee satisfaction surveys. It is imperative that leadership is fully engaged in the team, and both expects and nurtures engaged team members. For details for additional consulting, please contact any of the authors of this blog.
Executive coaching. All leaders need to periodically objectively review their strengths, leadership behaviors and their derailers – the behaviors that prevent them from being effective leaders. Most organizations now expect managers to coach direct reports, which sometimes leads to a conflict of interest and lack of confidentiality. The advantage of internal coaches is cost effectiveness and alignment with organizational goals. The advantage of external coaches is objectivity, best practice knowledge from global clients and the capacity for global scale. All leaders need to invest in and be active practitioners of their leadership skills.
What are you waiting for?
Contact Doug Gray, PCC, today at 615.905.1892 or contact us.
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Today, the morning after, I have had three sessions with leaders who represent the division and polarity of our country. One is an EVP in technology, born in India, whose 14-year old son is afraid to go to school today because he is Muslim. One is a female senior manager in healthcare who voted for Trump even though she sees him as yet-one-more sexist bully in a patriarchal system with a double standard. One is a director at a F100 who does not knowhow to respond to the rumors in his organization. Notice the fears from each of these leaders?
Consider 3 lessons:
Timing. Coaches focuses on the now and the future, by definition. So when should coaches encourage leaders to act on their convictions? Assume that 50% of the people you meet today are delighted because Trump won, and 50% are sad because Clinton lost. Further assume that within each group 50% are hopeful that the election will lead to a better future, and the other 50% are frightened or uncertain. In short, only 25% of the populace is hopeful because their person won, and 75% are uncertain, sad or fearful. Positive psychology coaching requires that we 1) define a hopeful future state and 2) act toward that hopeful future.
Possible actions: Celebrate your freedoms, TODAY, with your loved ones. Plant a garden. Pick up your children early from school. Call your loved ones. Model a hopeful future, with others, immediately. Leaders model a better future. Great leaders model a better future more frequently than average leaders. TODAY is the best day to model your leadership capacity.
Precedent. For the first time in U.S. history we have a president elect with no experience in the military, and no experience in political office. Trump will require executive coaching. Experienced leaders will need to teach him how to be a great president. Who will share that expertise? If business leaders or political leaders withhold information, or drive agendas that further their best interests, then history will teach us some negative lessons. The pollsters and Washington, DC-based media underestimated the voters. What does that fact mean? There is no precedent for coaching Trump. His advisors demonstrated mastery with the media and attack ads. Does that fact imply that leaders should tolerate foul language in our families, schools and organizations?
Possible actions: Take a stand for your core values, whatever they are. Share hope and optimism with others. Discuss the balance of power in the U.S. constitution, and the global influence of decision-making. Re-read Jefferson’s opinion that revolutions prevent despots from dominating. Model ethical leadership in your organization, family, or schools.
Embrace change. We just elected another candidate who is thought to represent change. What does that really mean? No one likes to be changed. Yet all leaders like to make changes. At a recent conference I heard a perspective that may be useful. We may complain about the rate of change, especially technologically-driven change that reduces jobs with automation or transparent access to data. However, the rate of change, TODAY, is slower than it will ever be for the rest of your life. As coaches of leaders, that fact implies that if we embrace change, TODAY, then we will be better prepared to embrace other changes tomorrow. How can it be otherwise?
Possible actions: Talk to someone from a different racial, economic or political group and listen carefully to their concerns. That is what coaches do. Hire a coach or ask someone to be your mentor. Select a mentor who is younger, or quite different. Then listen carefully. Assess your psychological capital (Psy Cap). We are a resilient species. When we embrace change from multiple perspectives then we model a more united states.
So, what are you going to do TODAY?
Contact your coach today. Or your clients.
Then let me know what you choose to do TODAY. Contact Us.
To you, at your best, Doug Gray, PCC, call me at 615.905.1892.
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There is a myth that physicians who endured medical residency can endure anything. There is a similar myth that healthcare administrators can overlook anything. Consider these facts:
Burnout is higher among physicians than for any other professionals.
Burnout is higher for women than for men; varies by specialty; and varies by career phase.
Burnout can be defined as the degree of emotional exhaustion, de-personalization, and self-efficacy at work. As one MD told me, “I just don’t have the energy to get up and do what I know I am supposed to do…”
Clinicians often tell me that they wish for a helping hand “on their shoulder.” In my consulting experience, we all can provide care for the care-givers.
Since the days of Hippocrates, physicians and nurses have been taught to ask others, “How are you feeling?” Some physicians and nurses will state, in confidential moments, that they are feeling depressed, overwhelmed, unexcited about providing care to others, unable to pay their lingering $150,000 residency debts or to save $250,000 for their children to attend a great college. Part of the conflict is that physicians have always been taught to “heal thyself.” As if healing is an easy process.
My question today is “Who takes care of the care-givers?”
You may be reading this article because you are concerned about a physician, or yourself, or your practice group.
Consider these findings from a 2013 survey: 40% of physicians admit regular self- medication (drugs of choice range from alcohol to amphetamines). 15% of physicians have admitted to feelings of suicidal ideation in the last 24 months. Virtually 100% of physicians and healthcare leaders have experienced burnout at some point in their careers. Some of my clients tell me that they appreciate the AA or Narcotics Anonymous meetings in their hospitals. But they may choose to attend AA somewhere else.
So what are you going to do?
Thankfully, resiliency can be taught and developed. Resiliency can be defined as “the capacity to adapt successfully in the presence of risk and adversity.” Examples of developing resiliency abound, from the U.S. military to the British National healthcare system. Note that burnout and resiliency are directly related and inversely related. Just like any coin with two sides.
We have developed evidence-based protocols and worked with thousands of health care leaders. Call for details.
Take a moment to write down where you think you are on a scale of 1 (low) to 10 (high) on burnout. Then do the same on resiliency.
1. A self- diagnostic question is “How do you know if you are avoiding burnout behaviors?”
2. An organizational- diagnostic question is to ask your team if they have noticed you being less compassionate, hopeful and caring lately?
Or if you are daring, ask your team if they have noticed you being more abrupt, judgmental, or impatient lately?
Amid our current culture of healthcare reform and continued changes in care, there is no more important investment than providing care to our care-givers. You are not alone.
Next steps:
1. Share this article with someone you care about.
2. Take the self-assessment described above 3. Schedule a complimentary session for someone who may be at risk of burnout
3. Call Doug Gray, PCC, at 615.905.1892 today.
Doug Gray is the CEO and Founder of Action Learning Associates, Inc. a company that helps healthcare leaders develop resilience. Since 1997 the company has helped hundreds of individuals and organizations develop the strengths, competencies and weaknesses. They then provide confidential customized consulting. For detailed assessments, digital downloads, or to schedule your confidential, complimentary initial consultation, visit www.action-learning.com or call 704-995-6647 today.
Action Learning Associates, Inc. is a PAHCOM Corporate Member Since 2015
References:
Dyrbye, L. N., Varkey, P., Boone, S. L., Satele, D. V., Sloan, J. A., & Shanafelt, T. D. (2013). Physician satisfaction and burnout at different career stages. Mayo Clinic Proceedings, (88)12, 1358-67.
Scudder, L. & Shanafelt, T.D. (2015). Two sides of the physician coin: Burnout and well- being. Medscape.
The short answer is, “Corporate coaching works inconsistently.”
Corporate coaching is commonly an internal form of talent development. Think of three pillars in talent development: (1) acquiring people, (2) developing people and (3) retaining desired people. Corporate coaching can be used to develop and retain desired employees. Not everyone is a desired employee.
Like all organizational responses, the success of any initiative designed to provide corporate coaching depends upon the organizational culture. Culture can be described at three levels: (1) artifacts (observable structures or processes, often hard to decipher), (2) stated beliefs and values (goals, values, not always aligned with artifacts), and (3) basic underlying assumptions (unstated or unconscious patterns that often define outcomes. See Schein, 2010.) Get the point? Corporate coaching may or may not work consistently. Consequently most organizations require external consultants to design and deliver results.
Now it is 2016. The trend toward packages that “Assess-Debrief-Design” for Individual Development Plans (IDPs) is now a large market led by KornFerry and DDI and others. Sadly, they are limiting themselves by selling those services as “corporate coaching packages.” Too often they are assessment requirements, often driven by HR or legal compliance needs. By analogy, after a physician diagnoses a concern they recommend but cannot require treatment. So it is with too much corporate coaching. Another provider that delivers corporate coaching globally is CoachSource. (Disclosure: I am one of 28 engagement managers, we provide unparalleled corporate coaching services.)
On a related note, corporate coaching is not a commodity. There is a trend away from resource-based views of talent as a fixed commodity (like a manufacturing unit) to a dynamic resource with unlimited potential and higher engagement. (But that is for another post or direct discussion!)
Should you have any questions it may be better to chat directly by calling Doug Gray, PCC, at 615.905.1892 or by contacting me here.
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