Sherpa study: coaches drop ROI as value measure

Return on Investment (ROI) has been abandoned as a means to measure coaching’s effectiveness, according to research. Other trends revealed include coaching becoming even more exclusive, increasing interest in neuroscience and confidence in coaching at an all-time high, according to US-based Sherpa’s 9th Executive Coaching Survey 2014 (bit.ly/MqaNkm).

In what the researchers call a “startling discovery”, the survey showed the number of consultants who use ROI to measure coaching’s value dropped from 33 to 22 per cent this year. Only 11 per cent of executive coaches try it.

The most popular measurement (28%) among external coaches of the value of executive coaching is 360 feedback, taken before and after coaching, a method pioneered by Marshall Goldsmith. Other methods included wellbeing and engagement (21%) and performance reviews (20%), the most popular among internal coaches. In fourth place is the newest measure on the market, Sherpa’s Impact on Business measure (13%). ROI trailed, and Effectiveness of Learning (Kirkpatrick) came in last (7%), except in Australia, where it came in first.

Coaches and leaders in Europe, Africa, North and South America see the application of neuroscience in coaching as the industry’s most important trend. Some 76 per cent of executive coaches say it should have a role.

Executive coaching is once again becoming the province of senior leaders and top executives. The number of organisations that reserve coaching for top executives only is growing, year by year, with a six-year ‘winning streak’.

The survey also found the number of organisations with coaching skills programmes has fallen for the first time. It attributes this, in part, to problems with coaching definitions – some equate it with training, for example, including the US Office of Personnel Management: “Coaching, in its simplest form, means to train, tutor or give instruction.”

However, confidence in coaching is higher than ever, according to Sherpa’s Coaching Confidence Index. To calculate the index, Sherpa considers rates charged by executive coaches, the number of clients they serve, predictions about demand for coaching and the amount of time executive coaches spend in marketing their services, among other factors. This year’s index has leapt to a record high of 166 (2006 = 100).

Internationally, the credibility of coaching is highest in Brazil. Canada saw a 10 per cent gain in “very high” responses this year. China also saw steady progress, with judgments of “mediocre” virtually disappearing. Japan saw a big move from “somewhat high” valuations into the “very high”. Germany kept last year’s levels of positive opinion, as did the US, UK and South Africa.

Coaching’s credibility is reaching new heights. Those who say it is “somewhat high” or “very high” jumped to 90 per cent in our 2012 report, and again in 2013, improving in 2014, to 93 per cent.

Over the years, coaching has shifted away from problem-solving towards pro-active leadership development. The latest report highlights a deepening of this. It also found male coaches are more likely than women to work with people in need of leadership development, while female coaches are more likely than men to work with individuals in transition.

 

Coaching at Work, Volume 9, issue 2

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