Executive Coaching Gets Second Look as Development Tool

By Pete Wolfinger Sep 30, 2008
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Investment in executive coaching is on the rise in organizations working to fill talent pipelines. These companies are benefiting from a high return on investment (ROI) for this coaching, according to a study by global outplacement and career management firm Drake Beam Morin Inc. (DBM) and the nonprofit think tank Human Capital Institute (HCI).

Seventy-eight percent of the 472 top business and human capital leaders surveyed for the study said they viewed coaching as a credible, effective way to improve a company’s performance, according to the findings of the report Trends in Executive Coaching: New Research Reveals Emerging Best Practices.

“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,” said Karen O’Boyle, president of DBM North America, in a press statement.

Study participants calculated ROIs ranging from 100 percent to 500 percent return, based on factors such as executive output, quality improvements, cost savings and senior leader turnover.

But coaching isn’t just about making money.

Executive coaching, sometimes introduced to address senior leadership’s disruptive, derailing behavior, can help develop “high potential” candidates such as mid-level managers for succession planning and can help a capable executive perform at an even more optimal level, according to the study. Qualitative factors such as an individual’s high achievement of development objectives, positive assessment from the coach and the coached individual’s ability to take on new tasks were also proven benefits.

“Executive coaching has become an ideal talent management tool for increasing business performance and making a company’s best people better,” according to Peyton Daniel, senior managing director and 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.”

Experts such as HCI Executive Director Allan Schweyer agree. “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.”

Pete Wolfinger is an editorial intern for SHRM.

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