People who invest in coaching want a specific outcome. There is an expectation that at the end, the objectives will have been met. And yet, coaching is not a simple, linear process - as a result, you need to consider several factors to effectively measure the ROI of coaching.
Understanding goals
Because of this, it’s important to have a clear understanding of coaching goals. Strategies can be used during coaching debriefs to ask questions around what individual growth has taken place, and how this can be directly linked to the organisation and its financial impact.
It's okay if we can't quantify everything - we're not trying to force things that don't exist. But good coaching is often about slowing down and listening to what the coachee has to say, identifying tangible data that shines a light on the effectiveness of coaching. It is a powerful tool for reflective practice and organisational quality assurance.
Calculating costs
While it can be tempting for leaders of coaching to come up with a framework for the best metrics for ROI, it’s better to partner with the CFO or an equivalent to understand the best way for the organisation to see cost s and benefits. In practice, it’s important for people to be engaged and to champion the numbers that coaching is generating.
Common pitfalls
When thinking about coaching ROI, the biggest mistake is not getting started. Often, that is attributed to fear: the fear of doing it wrong, fear of coaches fumbling through the conversation, fear of what will happen if the data doesn’t reveal a positive ROI.
When a coach knows that they are going to be measured on something, they will change their behaviour to achieve that outcome. Because of the organisational context that we operate in, it is easy to focus on short-term metrics, rather than on the deeper mindset shifts that coaching can bring, which are much more powerful in driving cultural change.
Measuring all coaching outcomes
In practice, it is possible to focus both on the financial ROI and the other outcomes of coaching. The most important trick is to wait until the end of an engagement before measuring the ROI of that particular coaching relationship. That way coaches ’ behaviour isn’t restricted, and the 'money talk' purely acts as a crystallisation of objectives for the entire process. There might be some more concrete KPIs, but don’t put pressure on finding financial ROI at the start of coaching. Trust that if it is there, you'll find it at the end of the debrief.
Lisa Ann Edwards is the host of the popular online programme for coaches, The ROI Starter Pack, described by Columbia University as “the real deal on ROI”.
For more information on our coaching services and future events, contact Karen Brice. 
