Coaches play an important role in every industry, from sports and Hollywood, to parenting and personal development. Coaching has also begun to play an increasingly important role in business, where the workplace coaching industry recently broke $1 billion and is projected to continue growing by 6.7% annually. [i]
One of the most important functions of coaching is to help companies develop talent. Talent development is the engine that drives succession planning; it’s the process of attracting, retaining, and promoting leaders from within. Additionally, it involves dedicating time, effort, and resources to developing future leaders. Coaching is one of the most effective ways you can guide talent development. Therefore, it is a key component of the succession planning process.
What is Coaching for Succession?
Before we look at the benefit of coaching for succession, it’s important to understand what this process actually entails. Coaching for succession does not refer to coaching engagements that exclusively target an employee’s promotion to a new role. Coaching for succession encompasses the entire process of talent development, such as identifying talent potential, using assessment to highlight development gaps in employees, and providing training, development, and coaching opportunities to staff across the organization. Consequently, this process allows companies to build strong leadership pipelines through which they can promote internally and ensure the success of succession for each of the organizations’ critical roles.
Despite the value of coaching in strategic and succession planning, corporate leaders still hesitate to make room for coaching in the budget. This reluctance is certainly unsurprising, given that only 3% of companies report fully understanding the value that coaching engagements have.1 To give you a better idea of whether coaching is worth the cost, let’s take a look at what the experts say about the financial and operational benefits of coaching for succession.
Financial Benefits of Coaching
In SIGMA’s succession process, coaching is a long-term engagement that helps potential leaders develop their skills over the weeks and months. While leaders may balk at the cost of long-term coaching, research has shown that companies easily recoup the costs associated with an ongoing coaching engagement. For example, over 90% of coaches estimate that the 18-month prospective value of their engagement exceeds $50,000.[ii] Managers also see financial benefits to coaching, with 42% of managers estimating the value of coaching engagements to be above $25,000. Over 1 in 5 companies also notice an increase in sales and revenue after coaching engagements. This increase in profit is present regardless of the original motivation for coaching,[iii] indicating that coaching for talent development does more than just save the long-term costs associated with unplanned succession; it also has a positive near-term impact on the company’s bottom line.
Operational Benefits of Coaching
Coaching for succession has the clear operational benefit of equipping organizations with qualified candidates for each critical role. Beyond that, however, there are immediate benefits from developing your internal talent pool. In a survey done by Clear Coaching, 30 organizations (including Tesco and Coca Cola) endorsed the following benefits of their coaching engagement:1
- Increasing perception
- Acquiring new skills
- Improving relationships
- Gaining other perspectives
- Increasing role clarity
- Increasing motivation
- Improving performance
- Building greater work/life satisfaction
- Creating a better organizational culture/environment
Perhaps most significantly, research shows that coaching helps employees establish lasting behavior change.[iv],[v] Coaching also makes it significantly more likely that coachees will attain their development goals.[vi] Finally, these prospects are certainly beneficial when preparing succession candidates to step into a new role, but they also demonstrate that coaching provides immediate operational benefits as individuals, teams, and organizations become more effective and efficient.
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Contact us to learn more about how our coaching, assessment, and succession solutions can strengthen your organization. We have over 50 years of experience helping companies across North America develop their people potential, and we’re more than happy to help your team too.
[i] ICF. (2020). Coaching Industry Hits $1 Billion, & Still Growing. ICF. Retrieved from https://canadacoachacademy.com/coaching-industry-hits-1-billion-still-growing/.
[ii] Schlosser, B., Steinbrenner, D., Kumata, E., & Hunt, J. (2007). The Coaching Impact Study: Measuring the Value of Executive Coaching with Commentary. International Journal of Coaching in Organizations, 5, 140-161.
[iii] Marber, J. (2007). ARE THERE ANY TANGIBLE BENEFITS TO COACHING
ARE THERE ANY POSITIVE FINANCIAL RETURNS? Clear Coaching Ltd.
[iv] Baron, L., & Morin, L. (2010). The impact of executive coaching on self-efficacy related to management soft-skills. Leadership & Organization Development Journal, 31, 18-38.
[v] Sonesh, S. C., Coultas, C. W., Lacerenza, C. N., Marlow, S. L., Benishek, L. E., & Salas, E. (2015). The power of coaching: A meta-analytic investigation. Coaching: An International Journal of Theory, Research and Practice, 8, 73-95.
[vi] Harkin, B., Webb, T. L., Chang, B. P. I., Prestwich, A., Conner, M., Kellar, I., …, & Sheeran, P. (2016). Does monitoring goal progress promote goal attainment? A meta-analysis of the experimental evidence. Psychological Bulletin, 142, 198-229.