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Leadership
6 Min Read

The ROI of Coaching: Building a Business Case for Leadership & Manager Coaching 

Nicole Klemp

With the rapid technological and cultural changes our society has experienced over the last few decades, the old leadership styles leftover from the industrial age are no longer effective. The role of managers and business leaders today is moving away from one of control and authority towards more of a position of support and empathy. 

Though most organizations today are on board with this modern approach to management, not every person put into a leadership position has the skills or emotional intelligence to pull it off. That’s where coaching comes in. 

What is leadership coaching?

Research shows that leaders who receive coaching are more effective and satisfied in their jobs. Coaching can help them become more self-aware and improve their interpersonal and critical thinking skills.

Although leadership training was once used to resolve conflicts or fix the behaviors of “problem” leaders, coaching is now a standard leadership development practice for executives at the world’s top companies.

During a TED Talk, Microsoft founder Bill Gates shared how coaching has helped improve his problem-solving ability. “Everyone needs a coach,” he said. 

Former Google CEO Eric Schmidt also believes in the importance of coaching in the workplace for leaders at all levels. “My friend and colleague John Doerr called to suggest that I get some coaching,” Schmidt wrote in Forbes. “What? I was far along in my career; I didn’t need a coach. I could be a coach. Of course, I was wrong about that. I actually needed the coach.” 

Coaching transforms management by sharpening the leadership skills of high-performers so they can, in turn, lead and develop high-performing teams. By investing in leadership development, a company can improve the success rate of its new managers and deliver positive business results.

Whether it’s executive coaching for individual leaders or a company-wide program for people across your organization, coaching can expand perspectives, inspire growth, and unlock the full potential of your current and future managers. 

Why is coaching important for new managers?

Coaching can be beneficial for any leader at any level or stage of their career. But coaching for new managers is especially useful for shaping effective leaders and building a sustainable company culture — a point that Victor Lipman, management trainer and author of The Type B Manager, makes in an article for the Harvard Business Review

“At the latter stages of their careers, most senior managers are pretty set in their ways. Their good habits and their bad habits. After several decades, I know I sure was. At the other end of the spectrum, however, the new managers (who, of course, are the organization’s future leaders) are a blank slate, just finding their own leadership styles. They’re sponges soaking up data, minds full of problems that need to be solved, and they’re eager for thoughtful guidance to help resolve them.” 

How does business coaching work?

While many HR professionals believe in the importance of coaching in the workplace, most teams don’t have people on staff with coaching expertise. Partnering with someone outside your organization can bring a fresh perspective and the tools and resources you need to execute coaching at scale.

While the methods and tools used for leadership and manager coaching will differ, the primary goal is essentially the same — to increase a leader’s confidence and ability to lead effectively.

15Five’s coaching solution, Transform, focuses on helping organizations drive business results and create lasting change. Managers learn through a blend of instructor-led learning and coaching-based practice. They apply their skills in the workplace before returning to their cohort to share what they’ve learned and continue advancing their skills.

Learn more about Transform >

Building a business case for manager coaching

While many strategic HR leaders understand the value of a formal professional development program and the importance of coaching in the workplace, some struggle to secure budget approval to make it happen.

Building a business case and showing the potential return on investment can help you convince executives that coaching is a worthwhile initiative. Leaders must see that investing in managers across the organization is a powerful strategy to improve employee experience and company performance. 

The proof is in the data

Research shows time and again that upskilling managers is a smart business decision. On the other side of that coin, doing nothing about ineffective managers can be extremely costly to an organization. 

Here are some data points on coaching impact to leverage as you build your business case:

  • According to 15Five’s 2022 Workplace Report, more than half (53.8%) of workers say an unsupportive manager would be a key factor behind their decision to leave their company. An even greater number of those folks felt that having a supportive manager would be an important reason to stay. 
  • Looking at things from the manager’s perspective, we found that 65% of managers struggle to perform. They’re feeling less prepared and more challenged than ever before, according to our 2020 Workplace Report.
  • According to the Institute of Coaching, 70% of people who receive coaching benefit from improved work performance, better relationships, and more effective communication skills. 
  • The same Institute of Coaching study also found that 86% of companies feel they more than recouped their investment in coaching.

How do you write a business case for professional development?

John Slater, Senior Director of Client Solutions for The Ken Blanchard Companies, recommends starting with this step-by-step approach when writing a business case for professional development and coaching: 

  1. Assess what resources need to be in place to instill a culture of coaching by anticipating potential barriers and obstacles.
  2. Specify investment costs, benefits, outcomes, and examples of success.
  3. Link coaching to key metrics, including strategic organizational goals, competencies, vision, and values.
  4. Compare the potential benefits of coaching to the risks of not moving forward.
  5. Identify executive allies and early adopters.

When building a case for your company to invest in manager coaching, you may experience pushback from decision-makers who are focused more on addressing immediate issues or short-term results. While coaching can undoubtedly provide some quick wins, remember to focus on the significant long-term business impact it can have, such as increased employee productivity, performance, and engagement.

Develop high-performing managers with 15Five

With 15Five, you can simultaneously upskill your managers, increase employee engagement, and drive business results. Managers can learn how to leverage their strengths, set objectives, motivate their teams, drive performance, and provide coaching and feedback that fosters growth.

Learn about manager training with 15Five >