The demands on modern leadership are many. To be successful, today’s leader must balance pressures in a fast-changing business environment with the pressures of engaging, supporting, and retaining employees. Doing so requires leaders to continuously evolve their capabilities and develop an agile, resilient mindset.
Leadership coaching accelerates leaders’ development of critical skills. Human resources (HR) leaders already understand the value of coaching — namely, that it can significantly improve employee performance, leadership development, and organizational effectiveness. But even in light of this value, securing budget for coaching programs can take time and effort. Building a business case includes demonstrating clear ROI to help convince executives.
Identify your coaching KPIs
The most successful coaching programs are designed with key performance indicators (KPIs) established at the outset, enabling program managers to track progress against goals and make adjustments as needed.
Your program goals should dictate what KPIs you choose to track and measure. Below, we offer three categories of metrics that offer insight into program success and impact in the short, medium, and long terms.
Program participation and engagement (short term indicators)
Coaching participation – The content of coaching sessions is confidential between leader and coach. However, as program manager, you should be able to track whether and how often leaders meet with their coaches. If you notice that a leader or leaders are failing to meet regularly with their coach, it’s important to figure out why so that you can make adjustments to the program.
Leader satisfaction – Offer pulse surveys to leaders throughout the program to capture their feedback on the program. Utilize rating scales to capture quantitative data, such as leaders’ level of satisfaction, their likelihood to recommend the program, the extent to which they feel coaching is getting them closer to their goals, the extent to which they feel their coach has offered actionable guidance, etc. Utilize open-ended questions to capture qualitative data about leaders’ experience with the program.
Learning engagement – If coaching is part of a larger leadership development program that includes learning or training courses, it’s important to track leaders’ participation and completion of those courses. If you notice that a leader is not enrolling in learning courses, alert their coach and remind them to help keep the leader accountable to their development plan.
Leader capability, performance, and confidence (medium term indicators)
At the outset of the program, you identified capability gaps and development goals for each leader. After the program concludes, assess each leader again and compare it to your baseline assessment to understand whether and how coaching has contributed to your leaders’ development goals.
Self-assessment – Ask leaders to assess their own capabilities and attitudes after completing the coaching program. Self-assessment questions can include: How do they rank their competence in the capabilities targeted by the program?; How likely are they to apply what they learned through coaching to their role?; How confident do they feel in their leadership abilities?
Performance review – Compare the annual performance reviews of each leader before and after they complete the coaching program. Typically conducted by an employee’s supervisor, performance reviews offer insight into the employee’s productivity, achievements, attitudes, strengths, and areas for development.
360 review – When a leader completes the coaching program, conduct another comprehensive assessment of their capabilities and behaviors that includes the perspectives of multiple stakeholders, such as direct reports, peers, supervisors, collaborators, and clients. Compare the results to the 360 review that was conducted prior to the coaching program to draw inferences about the impact of coaching on the leader’s growth and development.
Leader retention and promotion rates – Compare the percentage of program participants who are retained at the company for at least a year following the program to non-program participants. Also look at the percentage of participants who are promoted into higher levels of leadership following the program compared to employees who did not participate.
Organizational performance (long term indicators)
Ultimately, the goal of your coaching program is to drive positive outcomes for the organization. While it is difficult to accurately measure the causal impacts of your coaching program on overall organizational performance, these indicators should be tracked and analyzed to understand whether and how leaders’ participation in coaching contributes to organizational success.
Customer satisfaction – Happy customers are one of the most powerful indicators of a healthy, well-run business. Building a brand that customers trust and consistently delivering products and services that customers value requires strong organizational leadership that coaching can support. Measure customer satisfaction rates prior to launching your program, and track these rates as your program progresses and grows over a multi-year period.
Employee retention and experience – When employees choose to stay and grow their careers at an organization, it can indicate a high level of trust in leadership and in the future prospects of the business. Low employee turnover also correlates with employee satisfaction and wellbeing, both of which are strongly influenced by the leadership capabilities and behaviors of managers and executives.
Financial performance – Compare trends in revenue growth and profitability, as well as trends in cost reduction, before and after your program. Factor in investments that the organization makes to innovate products and services, as these can detract from the bottom line in the short term, but predict strong long-term financial performance.
Telling coaching impact stories
Creating a compelling narrative around the impact of coaching is crucial for gaining stakeholder buy-in. This story should align program outcomes with larger business goals and showcase tangible impacts on leadership behaviors, team performance, and organizational outcomes. And because executives often make decisions based on data-driven insights, compiling this information in a comprehensive report is essential.
- Highlight key metrics: Focus on improvements in areas directly tied to business success, like goal-achievement rates or employee engagement scores (i.e. the data you collected in the last step).
- Connect to business objectives: Clearly demonstrate how these improvements support broader organizational goals. For instance, if the business wants to improve customer experience, show how coaching has led to higher customer satisfaction scores.
- Provide concrete examples: Use specific data points and examples to illustrate how coaching has led to measurable achievements. For example, “Leaders who completed the coaching program reported a 30% improvement in their ability to manage team conflicts effectively.”
- Share success stories: Bring your data to life with case studies of individual leaders or teams who have benefited from coaching. These narratives can powerfully illustrate the personal and professional growth facilitated by coaching.
- Emphasize long-term benefits: Highlight how coaching creates a culture of continuous improvement.
By presenting a comprehensive ROI story that combines hard data with compelling narratives, you can create a strong business case for coaching. This helps stakeholders see coaching not as an expense, but as a wise investment in the organization’s future success.
Going beyond the numbers
Tangible, numbers-based results are important. But intangible benefits can also boost a business’s bottom line. Explain how successful coaching can improve communication, bolster trust, and help build a more positive company culture. Collecting powerful testimonials and employee stories can illustrate the benefits of your leadership coaching program to showcase these more qualitative benefits.
Interviews are a key method for gathering this type of data. They uncover insights and emotions that numbers might miss. They also provide a full picture of a coaching program’s impact on the work environment and team dynamics, and can reveal the depth and readiness of a leadership talent bench.
Whatever coaching program you choose, be sure to select one that makes gathering both qualitative and quantitative data easy. Look for a leadership coaching program that allows you to easily track performance and effectiveness from start to finish.ExecOnline makes it simple to measure and demonstrate the ROI of your leadership coaching programs. Learn more about our Coaching solutions today.