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Why has coaching held up in recession as discretionary development activity has been cut?

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There is nothing more important in Britain's boardrooms than recession and recovery. Different companies and sectors have seen varying degrees of cost-cutting.

Anecdote suggests, however, that in general discretionary development activity has not been drastically cut this time round compared to the recessions of the 1980s and 1990s. Instead much has been ‘on hold' as managers focus on the balance sheet, wage costs and employee engagement.

Coaching activity levels have held up. There are some good reasons for employers attaching importance to coaching:

¦  During recession when things are tough, coaching is one of the positive measures that organisations can use in supporting line managers and employees in keeping motivation and engagement high.

¦  Where coaching objectives are linked with business critical needs, this enables employers to cope with reductions in headcount for as long as the economic outlook is uncertain (whether by natural wastage or redundancy). Coaching is suitable for supporting restructuring, maximising the contribution/turnover per remaining employee, balancing short and long term priorities and building change capability.

¦  Some established in-house coaching networks are excellent value for money. The BBC estimated that the cost of the coaching through its in-house network was only £50 per hour, which compares very favourably to other training investments in a company's human capital.

¦  During recovery, when the dark clouds have gone and speed of response to fresh business opportunities is essential, coaches can support existing staff in operating at maximum capacity and capability, and keeping focus on delivering a business strategy of growth and innovation. This will help existing staff to cover the time lag while new staff are recruited.

¦  Where team coaching is being used, this enables a company's teams to pull together with confidence and make ready for recovery in addressing different markets and business situations.

One of the growth areas for coaching in recent years has been in internal coaching schemes: whereby managers and HR specialists are trained and supervised as internal coaches. As these schemes become embedded, and subject to evaluation, it is apparent that some organisations cannot identify the business benefits apparently ‘promised' by others' coaching success stories. Internal coaching schemes that fail to deliver employee morale, business responsiveness and mitigate against headcount reduction may well be under threat. During 2010 schemes will increasingly have to identify and demonstrate business benefits and value for money. In order to take advantage of what coaching promises for recovery, some re-focussing may be needed by employers during 2010. These suggested adjustments and the issues that underpin them are the subject of this chapter.

Based on findings from eight coaching programme evaluation studies IES has identified a number of ways in which schemes need to refocus for recovery.

In the early pre-recession days of internal coaching schemes, most work-based coaching initiatives grappled with the question of what should be focused on: business benefits, or person-centred development (and assume that this feeds through to business benefit)? There is a place for person-centred development, but if the business is paying it should expect business benefits, be clear about success in business terms, and monitor what is happening. Adjustments to make in 2010 are:

¦  Be clear at the outset what business benefits are expected and how/when they will be measured.

¦  Brief everyone that at least one area to work on should explicitly designed to deliver business growth and innovation.

¦  Avoid giving coachees the sole responsibility for selecting areas to work on in their coaching. Make sure organisation needs are included.

Some schemes keep a low profile for fear of being swamped with potential coachees. As a consequence they end up with insufficient numbers to justify the initial investment, or only those who put themselves forward and who may be looking to jump ship. What can you adjust for 2010?

¦  Target and prioritise coachees from business critical roles or projects. These are more likely to make you a faster return for your money and deliver a measurable impact on the business.

¦  Target whole teams. This may mean additional coach training in the future or using external coaches and/or OD/HR Business partners in the short team. IES expects team coaching to be the biggest area of growth in coaching, and there's a reason: team coaching seems to work especially well in a business recovery scenario.

Often line managers or sponsors do not play an active enough role or any role. Uninvolved line managers can be a real weakness for internal coaching programmes. Managers are best placed to ensure that coaching has a relationship to business needs and can identify indicators of progress to which later performance can be compared. Coachees may not identify the same development areas that the organisation or line manager would select. Without knowledge of the coaching objectives, managers are not able to identify the opportunities for individual development, or provide support.

Even in schemes where managers, coach and coachee are meant to meet to agree objectives and outcomes (usually called three-way contracting), IES has observed that it is not always implemented well. Line managers may be disinterested or may turn up to the contracting or final review sessions but be confused about their role. Adjustments to make in 2010 are:

¦  Spend time to get and keep managers and sponsors involved. They should ensure the coaching has a real link with business needs.

¦  Explain to line managers how coaching works, how they can help and how they should assess whether they are getting the outcomes the business needs.

¦  Ensure you provide support and guidance for everyone involved and not just at the outset of a programme of coaching but throughout.

¦  Consider whether a more thorough contracting process is needed, perhaps three or even four-way contracting (where line managers and OD/HR specialists become involved) so that the organisational perspective is better reflected in the coaching relationship.

There are three different levels of evaluation of most relevance for coaching schemes. They are effectiveness (Did the coaching work?), impact on individuals (What did people do as a result of being coached?), and business results (What was the value of the coaching to the company?). Currently three-quarters of companies who use coaching do no meaningful evaluation of their coaching provision. If you have a good scheme getting good business results, an evaluation could prove a wonderful defence against being next in line for cost-cutting.

Adjustments to make in 2010 are:

¦  Keep your evaluation design simple. Evaluation is essentially about asking questions, being curious, making decisions and putting a value on things. You don't need a complicated process.

¦  A focus on a small handful of key indicators can be sufficient (eg sales figures, employee engagement) and ideally select indicators that are already being collected for staff whether or not they are receiving coaching.

¦  Avoid merely asking for satisfaction data from those you are coaching. Different types of measures at different times and from different stakeholders ensures a more complete picture.

¦  Modify your evaluation process over time to make it shorter and more focused on the key goals. You can eliminate items where there is little variability and no new information and where you already have what you need.

¦  Ensure you summarise results at regular intervals and communicate it to the relevant stakeholders to justify continued expenditure.

¦  For new schemes, coaches can be relatively under-utilised at the early stages, meaning there is scope to secure a faster return for the up-front monies invested in coach training.

¦  For well established schemes, business recovery (when your remaining staff are very busy) is the wrong time to ease off using your volunteer coaches' time. When coach utilisation is high then the payback on the investment in coach training is growing and the fixed costs of managing the scheme appear better value.

The current economic situation may focus organisations on ensuring that internal coaching schemes show real impact. Aligning coaching more clearly with business needs during recovery is essential to leverage the benefits on offer. As is the introduction of a planned evaluation process so that business benefits can be identified, reported and promoted.

With the recommended adjustments in the way coaching schemes are managed, the business benefits and value of coaching should allow it to flourish as a robust and transformative tool as we leave the noughties and move into the' teenies'.

Alison Carter, principal research fellow at the Institute for Employment Studies

This article is part of a new report, The HR Agenda for 2010: Ten top trends as we come out of recession. It was prepared by the Institute for Employment Studies, an independent centre for research and evidence-based consultancy.