Coaching delivers on the money spent

If a leader spends an hour talking to an employee, what's the financial return on that investment?

What is this conversation worth?

If a leader spends an hour with a staff member, what is the financial benefit to that?

There are many who would be shocked at me asking this question, I know! C'mon Dr Lou, they would say, of course coaching pays off!

But... can we quantify that?

Not because I think it will really convince people who don't already coach, frankly, I'd just like to know!

Spending time with staff is an expected use of time for many leaders, and many good leader prioritise it simply believing in its value. Which is completely fine and shows fabulously humanitarian values.

But what are these humanitarian people doing for their company in productivity terms?

Research by McCarthy and Milner at University of Wollongong can enlighten us.

In the paper one manager reported that coaching led to an increase in output from 35% of the target to greater than 100% within 12 months. One organisation improved customer service by 450% within five months of introducing manager coaching.

In other words (and of course always hoping for a larger study - always!) coaching gets quite a good rap, it delivers!

Not bad!

Of course every organisation wants the 450% but that is likely to be dependent on the strength of the coaching program.

Do you have a good one? Are you developing leaders who can coach this well?

What is good coaching anyway?

1. Leaders must be trained to coach, contrary to popular belief it does NOT come naturally.

If you're relying on natural talent, it is going to be hit and miss at best. This is why every organisation should be championing coaching and have a coaching training program that every leader is expected to do.

2. Coaching should involve goal setting and feedback, and externally measured is best.

If it's your leaders doing the coaching, do them a favour and outsource the feedback process using 360 Degree Feedback with instruments that fit your organisation.

Think about it, if you are a person's leader and you are coaching them, you need to be their confidant and their champion, which makes it a slight conflict of interest to deliver challenging feedback. Worse, you could also be very wrong about the issue and look like you are taking advantage. So feedback should come from an external source, using 360 Degree Feedback tailored to suit the organisation and the position. That way the leader can focus on being that champion and get the most from the coaching process.

3. Be sensitive to the sensitive conversation, that requires an external coach

When coaching conversations turn sensitive it's time to find an external coach. There are some conversations that open leaders up to later issues about inappropriate conduct and could put them in difficult situations (what would you do if an employee who drove for your company admitted to an alcohol issue - and there are plenty of these examples). So have a policy for leaders that when a sensitive issue appears it is immediately outsourced to really competent coaching providers who can then refer on to other services if needed.

4. Above all else, focus on building a positive future for your coachee

When it comes down to it, coaching is kinda simple as long as you have the right intentions. If your intention is to build your coachee's career as high as it can go, that's the best start you can have. There are other aspects like creating gradual self-efficacy in the role, building experience and expertise, and creating opportunities for growth... but they all come second to having the right, very positive, intention.


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