Returning to work means reexamining how you operate to get things done. It’s an opportunity to see whether you and your staff can be even more effective in light of the new complexities that have changed the business world. It’s time to fine-tune your leadership and take it to the next level.
But as business owners seek to develop their leadership and that of others in the company, they often focus on presenting workshops, classroom training and mentoring programs. These have proven to be the least effective in developing leadership. Executive coaching, which is called upon less frequently, has proven to work best for leadership development, and the numbers reflect this.
“But my training budget is modest,” said one leader. “I can’t give every executive her own private coach.”
While executive coaching does appear to be more costly, the return is also much higher. When businesses invest in executive coaching to develop greater leadership, they recognize a return on investment (ROI) that is 7 times that of their initial investment, according to studies by PriceWaterhouseCoopers and the American Management Association. At least 25% of those same companies reporting a return of 10-49 times the investment.
How might your business benefit from such returns?
Typical ROI results reported from executive coaching include but are not limited to increased revenue and profitability, reaching, or exceeding organizational goals, higher performance and productivity, greater creativity and innovation, and enhanced skills in communications and conflict management.
At the same time, leaders have all heard disappointing stories of coaching experiences that cause them to hesitate. “How do I know it will work?” asked one executive. “My colleague really enjoyed his coaching experience, but he said it never really help him reach any tangible goals.” Sadly, his story is not unique.
How can you ensure, then, that your investment will pay off sizable dividends? Careful planning to identify a leader’s development goals and objectives is not enough. The coaching engagement should be overseen by a formally-trained coach using proven methodologies, and the plan should have distinct measurables (more numbers!) that serve as success markers to gauge how well the process is working.
You may also consider team coaching that can make the most of your budget and still have great returns.
A lot of leaders, in their eagerness to get “back to normal,” have given little thought to leadership development. The return to work has been first and foremost on most minds. However, with the complexities that COVID-19 has brought to us, leaders and other decision-makers will need to sharpen their skills in decision-making and execution.
Indeed, the COI (cost of inaction) when it comes to leadership development is staggering and has increased exponentially with the new business landscape. For example, 67% of all productivity loss can be attributed to poor communication and conflict. Less-than-optimal leadership practices can cost a business an amount equal to as much as 7% of its total annual sales. There’s much more, but I think you are getting the picture.
So why don’t more companies take advantage of this tool? Leaders fall into what we call “normalcy bias,” where they feel they are doing well, even when they are not. They may feel that coaching is only for corrective situations, or their executives seem too busy for coaching. And many feel their teams are meeting every goal they set. If this latter is your case, I’d challenge you to think about whether things are just too easy, and what could be accomplished by stretching those goals.
As the great “return to work” continues, and you think about whether your company is ready for more change, ask yourself if you are really fully equipped to lead it. Make sure that your investment, however you allocate it, provides you with a great return.
Patti Cotton works with executives, business owners, and their companies, to elevate and support leadership at all levels. Reach her via email at Patti@PattiCotton.com.
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