In my 20+ years of coaching leaders, I have learned more from them than I can fully describe. Here is a nugget that I learned last week. You may like it…
FACT: Great managers and leaders demonstrate outcome-based results. They measure actions. They can demonstrate the ROI of any initiative.
Successful coaches also demonstrate ROI, as explained in this 2-minute video rant that I recently created – ROI of your coaching service.
It doesn’t matter whether your client is a Fortune 100 CEO or a Small Business Owner. Everyone who buys my products and services has only one question in mind:
If I pay for your service, what will I get in return?
We pay for outcome-based results. Let’s say you are hiring a fitness trainer to lose some weight. You would ask:
How much weight will I lose in 3 months?
Does this person understand my personal situation?
Has this person helped other people lose weight?
Does this person have a tremendous reputation?
Some people spend more time assessing a personal trainer than a physician or a lawyer or a professional coach. Be smart.
Professional coaches need to demonstrate the ROI of your service. Your clients need to know the outcomes they can expect from your service.
If you don’t know how to show ROI, then you will lose clients and money.
And, I don’t want you to lose clients. So, I prepared a short exclusive video for you.
RE: The Positive Organizational Leadership Project (POLP)
Goal:
Invite practitioners/ leaders/ consultants to share digital stories of HOW they are applying Positive Psychology individually and organizationally.
Assumptions:
Leaders practice leadership. We can all be better leaders.
We can leverage technology and our communities.
Relationships matter. When we model relationships that matter, then we increase awareness and learning.
Background:
After attending the International Positive Psychology Association conference in Montreal, Canada, in July, 2017 one theme stood clear. Marketing and branding for practitioners using positive psychology is NOT well defined. Market confusion abounds. This Positive Organizational Leadership Project emerged as one initiative to help practitioners share HOW they serve clients in our global marketplace. Join us?
Process:
(a) share this invitation broadly, (b) schedule a 30-minute session with Doug Gray here or at https://actionlearnin.wpengine.com/ (c) receive Time Trade confirmation with calendar link (d) encourage participants to write responses to the 5-7 questions below and email them to doug@action-learning.com 24 hours prior to our scheduled call so that we can each be well prepared, (e) download https://zoom.us/ software and familiarize yourself with software on YouTube, (f) at the scheduled time, record 5-10 minutes of video session using https://zoom.us/j/3432485703 (g) send MP4 recording to practitioners for their distribution, (h) post on https://www.youtube.com/user/dgrayful/videos channel with invitation to be included in the project.
Possible questions:
Self-introduction: Who are you, what do you do, where are you located, do you have a website or invitation to share with others?
Self- awareness: If you have taken the assessment at https://www.viacharacter.org/www/, what are your top 5 signature strengths? How would you describe yourself, at your best, using those top 5 signature strengths? (FYI, my top signature strengths are creativity, hope, perspective, honesty, zest.)
Definition: One common definition of positive psychology is the science and practicing of flourishing or thriving… how do you typically define positive psychology?
What attracts you to the science or practice of positive psychology?
Clients: Who do you typically serve in your PP consulting work? Please share 2-3 examples/ case studies/ successful interventions or client experiences.
Trends: What trends or market opportunities do you see in the future for positive psychology consulting?
Referrals: Who else can you refer me to who (a) is a Positive Psychology consultant and (b) might be willing to be interviewed in this project?
How can you help? Share this invitation broadly. Thank you in advance for your participation.
There is too much confusion regarding return on investment (ROI) for your investment in business coaching.
Let me clear the confusion by describing two sides of the ROI coin, and share an example of a coaching client who demonstrated a 300 % ROI from his investment.
One side of the ROI coin states “If you cannot demonstrate ROI from any initiative, then it will not be funded.” That makes business sense, and has defined most decision-making models. Examples abound from Peter Drucker’s famous maxim “If you cannot measure it then it does not exist” to Alan Weiss’ maxim “The only measure that matters is improved results of the client’s condition.” My corollary is, “Behavorial outcomes or performance outcomes can always be measured quantitatively (with numbers) or qualitatively (with descriptions).”
The other side of the ROI coin states that human behavior is inherently complex and unpredictable, therefore measuring that complexity is impossible. The notion of accurately measuring the impact of that change is impossible (even with artificial intelligence gathered from big data sets.) My corollary is, “The pace of change is slower today than it will ever be in the future, so respond to the challenges today.” What are you waiting to measure? Organizational psychologists distinguish between True Measures (T, an absolute from Aristotle), actual measure (t) and degree of error (%e). One formula to measure that complexity is T = t(%e). The main point is that complexity can be measured within ranges of acceptable error.
My experience is that ROI can be measured and must be measured. Here is the formula that I use, adapted from my good friend John Mattox’s (2016) book, Learning Analytics; Measurement innovations to support employee development. (Yes, my testimonial is on the back cover. I strongly encourage anyone interested in ROI to purchase and study this book.) Another great resource is the ROI Institute, founded by Jack and Patti Phillips.
Here is version 1 of the formula I use: ROI = (benefits-cost)/ cost. For instance, if the benefits of coaching investment for 12 months are $20,000 in new revenue, and the cost of coaching was $10,000, then the ROI of that investment was ($30,000-$10,000) or $20,000/ $10,000 or 200%. Pretty impressive ROI, right? But coaching was not the only reason for that new revenue of $30,000, therefore that 200% ROI number is not valid.
Version 2 of the formula I use is ROI = (benefits x % attributed to outcomes)/ cost. For instance, if the benefits of coaching investment for 12 months are $30,000 in new revenue, and the percent attributed to coaching was 40%, and the cost of coaching was $10,000, then the ROI of that investment was ($30,000 x .40 = $12,000-$10,000) or $2,000/ $10,000 or 20%. A more accurate assessment, perhaps, but 20% ROI is not as impressive. Version 2 is also called adjusted ROI.
Here is a real example from one of my clients that illustrates how to assess the ROI of business coaching:
2015
2016
2017 (expected)
Products
$200,000
$190,000
$250,000
Services
$20,000
$55,000
$70,000
$220,000
$245,000 (+10%)
$320,000 (+23%)
% attributed to coaching
20% ($44,000)
20% ($49,000)
20% ($64,000)
– Cost of coaching
$12,000
$12,000
$12,000
ROI of coaching
367 %
408 %
533 %
The bottom line?
The ROI of your business coaching investment can be measured based on behavioral outcomes and performance outcomes.
2. The ROI of your business coaching investment with Action Learning Associates is guaranteed to be positive. Since 1997, we have provided that guarantee, and it has been true 100% of the time.
Action Learning is a behavioral change process model that works 1) for groups and 2) for individuals.
For groups, Action Learning occurs when stakeholders use real problems to acquire learning and implement system-wide solutions.
For individuals, Action Learning is a behavioral coaching methodology that applies the same 4 steps.
The Action Learning change process model includes four steps:
1) decide what breakthrough requires you to invest resources,
2) act with a talented, cross-functional team and executive endorsement,
3) reflect on steps achieved, and
4) connect or expand the results across business or functional lines, to new markets or clients.
We have facilitated organizationalAction Learning change using both virtual and direct processes:
1. Technology processes: SharePoint, Action Item task lists, virtual teams, e-coaching and e-consulting, digital consulting and short implementation teams.
2: Direct meeting processes: assessments, facilitation in a series of workshops, coaching and consulting, project initiatives, leadership off-site retreats, strategic reorganization
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