A 2014 study found that more than three-quarters of businesses planned to devote resources to leadership development to develop the skills of high-potential individuals and improve overall organizational culture. Coaching is one of the most frequently used leadership development tools, with 83% of organizations intending to use coaching. Unfortunately, according to another study, two-thirds of organizations decline to measure coaching effectiveness, and 20% said they didn’t even know if there were metrics in place to determine the effectiveness of coaching. By not making that extra effort to measure the effectiveness of executive coaching, organizations deprive themselves of knowing where coaching works and where it needs improvement.

Measuring the impact that coaching makes, both quantitatively and qualitatively helps organizations get a handle on return on their coaching investment, and sets the stage for future executive coaching to work better. Here are some ways to measure executive coaching effectiveness and ensure a healthy ROI for the coaching investment.

Create an Evaluation Plan Up Front

Before an executive coach is selected, creating an evaluation framework is helpful. The first step is to determine what you want to evaluate. That could be anything from financial gains to employee well-being to reducing wasteful spending. Not everything is easy to measure quantitatively, but qualitative measures can be made by, for example, asking those who work every day with the executive what changes they have noticed.

Once you know what you want to measure after coaching, determine a baseline before coaching begins. This may take the form of isolating data from financial reports, or conducting anonymous surveys of the people who work with executives on a day-to-day basis. After coaching is complete, repeat these measurements. Look at the financial reports, repeat the employee survey, and take stock of what has and has not changed.

Before-and-After Comparisons of Executive Performance

Exactly how you assess an executive’s performance before and after coaching will depend on your industry, your executive, and your goals. Coaching goals should align with business goals, and if an executive misses his or her goal, it’s important to measure the gap between the goal and actual performance and attempt to determine the cause of that gap. Some organizations choose to also invest in real-time coaching observation by a neutral third party to better understand how well coaching is meeting the executive’s and the business’s needs. It’s not enough to “feel like” coaching helped. How has it helped? How much has it helped? What could go better for the next executive to enlist the help of a coach?

Has the Business Itself Improved?

This can be tricky. If an executive goes through the coaching process, and at the end of it, the executive is happier and communicates better with those who report to him or her, is that “enough?” In your organization it may be. In others it may not be. Some organizations may not consider executive coaching to have been effective unless sales performance tracking indicates an improvement in the bottom line after coaching. Exactly how you answer the question, “Is this a better business now?” may be unique, but answering the question is still essential to determining ROI for executive coaching and finding out ways it can be improved.

Metrics: Vital Information Plus Accountability

Executive coaching should be far more than a feel-good exercise. It should produce noticeable, measurable positive results. Measuring these results may not be as straightforward as comparing figures at the bottom of two spreadsheets, but that doesn’t mean it shouldn’t be done. The exact balance of qualitative and quantitative success metrics will vary from one business to the next, but the only way to know if executive coaching delivers results (and is therefore worthwhile in the future for other executives) is to define these metrics and measure them before and after coaching takes place. Not only do you learn more about your organization in the process, you set expectations for accountability from both the coach and the executive.

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