ROI Case Study

NATIONS HOTELMEASURING ROI IN BUSINESS COACHINGJack J. Phillips, Ph.D.
This case was prepared as a basis for discussion rather than to illustrate either effective or ineffective administrative and management practices. All
names, dates, places, and organizations have been disguised at the request of the authors or organizations. This is an update of a case study
originally published in ROI at Work: Best Practice Case Studies from the Real World, (Jack J. Phillips and Patti P. Phillips, American Society for
Training and Development, Alexandria, VA, 2005).
Copyright © 2007.
No part of this may be reproduced, stored in a retrieval system, or transmitted in any form or by a means without written permission.

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ABSTRACT
The learning and development team at the Nations Hotel Corporation was challenged to identify learningneeds to help executives find ways to improve efficiency, customer satisfaction, and revenue growth in thecompany. A key component of the program was the development of a formal, structured coaching program,
Coaching for Business Impact. The corporate executives were interested in seeing the actual ROI for thecoaching project. This case study provides critical insights into how coaching creates value in an organization
including ROI.

BACKGROUND
Nations Hotel Corporation (NHC) is a large U.S.‐based hotel firm with operations in 15 countries. The firm has
maintained steady growth to include more than 300 hotels in cities all over the world. NHC enjoys one of themost recognized names in the global lodging industry, with 98% brand awareness worldwide and 72% overall
guest satisfaction.
The hospitality industry is very competitive, cyclical, and subject to swings with the economy. Room rentals
are price sensitive, and customer satisfaction is extremely important for NHC. Profits are squeezed if operating
costs get out of hand. NHC top executives constantly seek ways to improve operational efficiency, customer
satisfaction, revenue growth, and retention of high‐performing employees. Executives‐‐particularly those incharge of individual properties‐‐are under constant pressure to show improvement in these key measures.
The learning and development function, the Nations Hotel Learning Organization (NHLO), conducted a brief
survey of executives to identify learning needs to help them meet some of their particular goals. NHLO wasinterested in developing customized learning processes including the possibility of individual coachingsessions. Most of the executives surveyed indicated that they would like to work with a qualified coach toassist them through a variety of challenges and issues. The executives believed that this would be an efficient
way to learn, apply, and achieve results. Consequently, NHLO developed a formal, structured coaching
program—Coaching for Business Impact (CBI)—and offered it to the executives at the vice president level andabove.
As the project was conceived, the senior executive team became interested in showing the value of thecoaching project. Although they supported coaching as a method to improve executive performance, theywanted to see the actual ROI. The goal was to evaluate 25 executives, randomly selected (if possible) from theparticipants in CBI.
The Program
Figure 1 shows the steps in the new coaching program from the beginning to the ultimate outcomes.
This program involves 14 discrete elements and processes.

© 2007 ROI Institute, Inc. All rights reserved.

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COACHING FOR BUSINESS IMPACT STEPS

1. Voluntary participation
2. The need for coaching
3. Self assessment
4. Commitment for data
5. Roles and responsibility
6. The match
7. Orientation session
8. The engagement
9. Coaching sessions
10. Goal setting
11. Action planning
12. Active learning
13. Progress review
14. Reporting

Figure 1. Coaching for Business Impact Steps

1. Voluntary participation: Executives had to volunteer to be part of this project. Voluntary commitment
translates into a willing participant who is not only open to changing, improving, and applying what isbeing learned, but also is also willing to provide the necessary data for evaluating the coaching process.
The voluntary nature of the coaching program, however, meant that not all executives who needed
coaching would be involved. When compared to mandatory involvement, however, the volunteer effort
appeared to be an important ingredient for success. It was envisioned that as improvements wererealized and executives reflected on the positive perceptions of coaching that other executives would
follow suit.
2. The need for coaching: An important part of the process was a dialog with the executive to determine if
coaching was actually needed. In this step, NHLO staff used a checklist to review the issues, needs, andconcerns about the coaching agreement. Along with establishing a need, the checklist revealed key areas
where coaching could help. This step ensured that the assistance desired by the executive could actually
be provided by the coach.
3. Self‐assessment: As part of the process, a self‐assessment was taken from the individual being coached,his or her immediate manager, and direct reports. This was a typical 360‐degree assessment instrumentthat focused on areas of feedback, communication, openness, trust, and other competencies necessary
for success in the competitive hospitality environment.
© 2007 ROI Institute, Inc. All rights reserved.

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4. Commitment for data: As a precondition, executives had to agree to provide data during coaching and at
appropriate times following the engagement. This up‐front commitment ensured that data of sufficientquality and quantity could be obtained. The data made evaluation easier and helped executives see theirprogress and realize the value of coaching.
5. Roles and responsibility: For both the coach and the executive, roles and responsibilities were clearly
defined. It was important for the executive to understand that the coach was there to listen, provide
feedback, and evaluate. The coach was not there to make decisions for the executive. This clear
distinction was important for productive coaching sessions.
6. The match: Coaches were provided from a reputable business coaching firm where NHLO had developed
a productive relationship. Coach profiles were presented to executives and a tentative selection wasmade on a priority listing. The respective coach was provided background information on the executive
and a match was made. After this match, the coaching process began.
7. Orientation session: The executive and coach formally met during an orientation session. Here, the NHLO
staff explained the process, requirements, timetable, and other administrative issues. This was a very
brief session typically conducted in a group; however, it could also be conducted individually.
8. The engagement: One of the most important aspects of the process involved making sure that theengagement was connected to a business need. Typical coaching engagements focused on behavioral
issues (e.g., an executive’s inability to listen to employees). To connect to the business impact, thebehavior change must link to a business consequence. In the initial engagement, the coach uncovered thebusiness need by asking a series of questions to examine the consequences of behavior change. This
process involved asking “so what?” and “what if?” as the desired behavior changes were described. As
the business needs were identified, the measures must be in the categories of productivity, sales,
efficiency, direct cost savings, employee retention, and customer satisfaction. The engagement should beconnected to corresponding changes in at least three of those measures. Without elevating theengagement to a business need, it would have been difficult to evaluate coaching with this level ofanalysis.
9. Coaching sessions: Individual sessions were conducted at least once a month (usually more often) lastinga minimum of 1 hour (sometimes more), depending on the need and issues at hand. The coach andexecutive met face to face, if possible. If not, coaching was conducted in a telephone conversation.
Routine meetings were necessary to keep the process on track.
10. Goal setting: Although individuals could set goals in any area needing improvements, the senior
executives chose five priority areas for targeting: sales growth, productivity/operational efficiency, direct
cost reduction, retention of key staff members, and customer satisfaction. The executives selected one
measure in at least three of these areas. Essentially, they would have three specific goals that would
require three action plans, described next.
11. Action planning: To drive the desired improvement, the action planning process was utilized. Common incoaching engagements, this process provided an opportunity for the executive to detail specific action
steps planned with the team. These steps were designed to drive a particular consequence that was abusiness impact measure. Figure 2 shows a typical action planning document used in this process. The
executive was to complete the action plan during the first two to three coaching sessions, detailing step‐© 2007 ROI Institute, Inc. All rights reserved.

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by‐step what he or she would accomplish to drive a particular improvement. Under the analysis section,
Part A, B, and C are completed in the initial development of the plan. The coaches distributed action plan
packages that included instructions, blank forms, and completed examples. The coach explained theprocess in the second coaching session. The action plans could be revised as needed. At least three
improvement measures were required out of the five areas targeted with the program. Consequently, atleast three action plans had to be developed and implemented.
12. Active learning: After the executive developed the specific measures in question and the action plans,
several development strategies were discussed and implemented with the help of the coach. The coachactually facilitated the efforts, utilizing any number of typical learning processes, such as reading
assignments, self‐assessment tools, skill practices, video feedback, journaling, and other techniques.
Coaching is considered to be an active learning process where the executive experiments, applies, andreflects on the experience. The coach provides input, reaction, assessment, and evaluation.
13. Progress review: At monthly sessions, the coach and executive reviewed progress and revised the action
plan, if necessary. The important issue was to continue to make adjustments to sustain the process.
14. Reporting: After six months in the coaching engagement, the executive reported improvement bycompleting other parts of the action plan. This includes Part D, E, F, and G and intangible benefits andcomments. If the development efforts were quite involved and the measures driven were unlikely tochange in the interim, a longer period of time was utilized. For most executives, six months wasappropriate.
These elements reflected a results‐based project appropriate called “coaching for business impact.”© 2007 ROI Institute, Inc. All rights reserved.

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ROI ACTION PLAN
Action Plan: Coaching for Business Impact
Name:

Coach:

Date

Impact Objective:
Improvement Measure:

Evaluation Period:
Current Performance:

Action Steps
1. _________________________________________________________________________________________________
2. _________________________________________________________________________________________________
3. _________________________________________________________________________________________________
4. _________________________________________________________________________________________________
5. _________________________________________________________________________________________________
6. _________________________________________________________________________________________________
7. _________________________________________________________________________________________________
8. _________________________________________________________________________________________________

toTarget Performance:

Analysis
A. What is the unit of measure? __________________________
B. What is the value (cost) of one unit? $___________________
C. How did you arrive at this value?
________________________________________________________________________________________________________________________________________________________________________________________________________
D. How much did the measure change during the evaluation period?
(monthly value) _____________________________
E. What other factors could have contributed to this improvement?
F. What percent of this change was actually caused by this program?
______________%
G. What level of confidence do you place on the above information? (100% =Certainty and 0% = No Confidence)____________%

Intangible Benefits:
Comments: ____________________________________________________________________________________________________________________

Figure 2. Action Plan Form

© 2004 ROI Institute, Inc. All rights reserved.

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Objectives
An effective ROI study flows from the objectives of the particular project being evaluated. For
coaching, it is important to clearly indicate the objectives at different levels. Figure 3 shows the detailed
objectives associated with this project. The objectives reflect the four classic levels of evaluation plus a fifth
level for ROI. Some of the levels, however, have been adjusted for the coaching environment. With theseobjectives in mind, it becomes a relatively easy task to measure progress on these objectives.

OBJECTIVES OF BUSINESS IMPACT COACHING
Level 1. Reaction Objectives
After participating in this coaching program, theexecutive will
1. perceive coaching to be relevant to the job
2. perceive coaching to be important to job
performance at the present time
3. perceive coaching to be value added in termsof time and funds invested
4. rate the coach as effective
5. recommend this program to other executives.

Level 3. Application Objectives (continued)
3. Show improvements on the following items:
a. uncovering individual strengths andweaknessesb. translating feedback into action plansc. involving team members in projects
and goals
d. communicating effectively
e. collaborating with colleagues
f. improving personal effectivenessg. enhancing leadership skills.
4. Identify barriers and enablers

Level 2. Learning Objectives
After completing this coaching program, theexecutives should improve their understanding ofor skills for each of the following:
1. uncovering individual strengths andweaknesses
2. translating feedback into action plans
3. involving team members in projects and goals
4. communicating effectively
5. collaborating with colleagues
6. improving personal effectiveness7. enhancing leadership skills.

Level 4. Impact Objectives
After completing this coaching program,executives should improve at least three specificmeasures in the following areas:
1. sales growth
2. productivity/operational efficiency
3. direct cost reduction
4. retention of key staff members
5. customer satisfaction.
Level 5. ROI Objective

Level 3. Application Objectives
Six months after completing this coaching program,executives should
1. complete the action plan
2. adjust the plan accordingly as needed forchanges in the environment

The ROI value should be 25%.

Figure 3. Objectives of Business Impact Coaching

Planning for Evaluation
Figure 4 shows the completed data collection plan for this project. The plan captures the following techniquesand strategies used to collect data for this project:© 2004 ROI Institute, Inc. All rights reserved.

61. Objectives: The objectives are listed as defined in Figure 3 and are repeated only in general terms.
2. Measures: Additional definition is sometimes needed beyond the specific objectives. The measuresused to gauge progress on the objective are defined.
3. Methods: This column indicates the specific method used for collecting data at different levels. In thiscase, action plans and questionnaires are the primary methods.
4. Sources: For each data group, sources are identified. For coaches, sources are usually limited to the
executive, coach, manager of the executive, and the individual/team reporting to the executive.
Although the actual data provided by executives will usually come from the records of theorganization, the executive will include the data in the action plan document. Thus, the executive
becomes a source of the data to NHLO.
5. Timing: The timing refers to the time for collecting specific data items from the beginning of thecoaching engagement.
6. Responsibility: The responsibility refers to the individual(s) who will actually collect the data.

DATA INTEGRATION PLAN

SeniorExecutive
Questionnaire

Data Category

Executive
Questionnaire

Reaction

X

Learning

X

X

Application

X

X

Action Plan

Company
Records

X

Impact

X

Costs

X
X

Figure 4. Data Integration Plan for Evaluating the Program

The data collection plan (Figure 5) shows how the various types of data are collected and integrated to provide
an overall evaluation of the program.

© 2008 ROI Institute, Inc. All rights reserved.

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DATA COLLECTION PLAN
Program: Coaching for Business Impact Responsibility: Jack Phillips
Level

1
2

3
4

Objective(s)Reaction/Satisfaction• Relevance to job• Importance to job success• Value add• Coach’s effectiveness• Recommendation to others
Learning• Uncovering strengths/
weaknesses• Translating feedback into action• Involving team members• Communicating effectively• Collaborating with colleagues• Improving personal
effectiveness• Enhancing leadership skills
Application/Implementation• Complete and adjust action plan
• Identify barriers and enablers• Show improvements in skills
Business Impact (3 of 5)
1. Sales growth
2. Productivity/efficiency
3. Direct cost reduction
4. Retention of key staff members
5. Customer satisfaction

Date:____________

Measures/Data

Data Collection
MethodData Sources

TimingResponsibilities• 4 out of 5 on a 1 to 5

• Questionnaire• Executives• 6 months• NHLO Staff

rating scale• 4 out of 5 on a 1 to 5

after
engagement• Questionnaire• Executives• Coach• 6 months• Action Plan
• Questionnaire• Executive• Coach• 6 months• Action Plan

• Executive• 6 months

rating scale• Checklist for actionplan• 4 out of 5 on a 1 to 5
rating scale
1. Monthly revenue
2. Varies with location
3. Direct monetary• NHLO Staff

after
engagement• NHLO Staff

after
engagement• NHLO Staff

after
engagementsavings
4. Voluntary turnover
5. Customer satisfaction

index

5

ROI
• 25 percent

Comments: Executives are committed to providing data.They fully understand all the data collection issues prior to engaging
into the coaching assignment.

Figure 5. Completed Data Collection Plan
© 2004 ROI Institute, Inc. All rights reserved.

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Figure 6 shows the completed plan for data analysis. This document addresses the key issues needed for acredible analysis of the data and includes the following:
1. Data items: The plan shows when business measures will be collected from the one of the five priority
areas.
2. Isolating the effects of coaching: The method of isolating the effects of coaching on the data isestimation, where the executives actually allocate the proportion of the improvement to the coachingprocess (more on the consequences of this later). Although there are more credible methods, such as
control groups and trend analysis, they are not appropriate for this situation. Although the estimates
are subjective, they are developed by those individuals who should know them best (the executives),
and the results are adjusted for the error of the estimate.
3. Converting data to monetary values: Data is converted using a variety of methods. For most data items,
standard values are available. When standard values are not available, the input of an in‐house expert
is pursued. This expert is typically an individual who collects, assimilates, and reports the data. Ifneither of these approaches is feasible, the executive estimates the value.
4. Cost categories: The standard cost categories included are the typical costs for a coaching assignment.
5. Communication targets: Several audiences are included for coaching results, representing the key
stakeholder groups: the executive, the executive’s immediate manager, the sponsor of the program,and the NHLO staff. Other influences and issues are also detailed in this plan.
Evaluation Results
The careful data collection planning allowed the coaching program to be evaluated at all five levels.

© 2004 ROI Institute, Inc. All rights reserved.

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ROI ANALYSIS PLAN
Program: Coaching for Business Success

Data Items(Usually
Level 4)

• Sales growth• Productivity/
operational
efficiency

Methods for
Isolating theEffects of theProgramEstimates for
executive(Method is thesame for alldata items)• Direct cost
reduction• Retention of
key staff
members

Responsibility: Jack Phillips___

Methods ofConverting
Data toMonetary
Values• Standard
Value• Expert input• Executive
estimate(Method is thesame for alldata items)

Cost Categories• Needs
assessment• Coaching fees
• Travel costs• Executive time
• Administrative
support• Administrative
overhead• Communication
expenses• Facilities• Evaluation• Customer
satisfaction

Date:_____________

Intangible
Benefits• Increased
commitment• Reduced
stress• Increased
job
satisfaction• Improved
customer
service• Enhanced
recruitingimage• Improved
teamwork• Improved
communic
ation

Figure 6. The ROI Analysis Plan for Coaching for Business Impact© 2008 ROI Institute, Inc. All rights reserved.

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Communication
Targets for Final
Report• Executives• Senior
executives• Sponsors• NHLO staff• Learning &Development
Council• Prospective
participants for
CBI

Other
Influences/
Issues During
Application
Comments

A variety ofother initiatives
will influence
the impact
measureincluding our
Six Sigma
process, service
excellence
program, andour efforts tobecome a greatplace to work.

It is extremely
important to securecommitment fromexecutives to provide
accurate data in atimely manner.

Reaction
Reaction to the coaching program exceeded expectations of the NHLO staff. Comments
received for Level 1 evaluation included these:• “This program was very timely and practical.”• “My coach was very professional.”
On a scale of 1 to 5 (1 = unacceptable and 5 = exceptional), the average rating of five items
was 4.1, exceeding the objective of 4.0. Table 1 shows the items listed.

EXECUTIVE REACTION TO COACHING
Level 1 Evaluation
Rating*Relevance of Coaching
4.6
Importance of Coaching
4.1
Value of Coaching
3.9
Effectiveness of Coach
3.9
Recommendation to Others
4.2*Scale 1‐5, where: 1 = Unacceptable
5 = Exceptional

Table 1. Executive Reaction to Coaching

Learning
As with any process, the executives indicated enhancement of skills and knowledge in certain
areas:• “I gained much insight into my problems with my team.”• “This is exactly what I needed to get on track. My coach pointed out things I hadn’t
thought of and we came up with some terrific actions.”
Table 2 shows seven items with inputs from both the executives and their coaches. For thislevel, it was considered appropriate to collect the data from both groups, indicating the degreeof improvement. The most accurate, and probably most credible, is the input directly from theexecutive. The coach may not be fully aware of the extent of learning.

© 2008 ROI Institute, Inc. All rights reserved.

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Measures
Understanding strengths and weaknesses
Translating feedback into action plans
Involving team members in projects andgoals
Communicating effectively
Collaborating with colleagues
Improving personal effectiveness
Enhancing leadership skills*Program value scale 1‐5.

Executive
Rating*
3.9
3.7

Coach
Rating*
4.2
3.9

4.2

3.7

4.1
4.0
4.1
4.2

4.2
4.1
4.4
4.3

Table 2. Learning from Coaching

Application
For coaching to be successful, the executive had to implement the items on the action plans.
The most important measure of application was the completion of the action plan steps. Eighty‐
three percent of the executives reported completion of all three plans. Another 11 percent
completed one or two action plans.
Also, executives and the coach provided input on questions about changes in behavior from theuse of skills. Here are some comments they offered on the questionnaires:•••“It was so helpful to get a fresh, unique point of view of my action plan. The coachingexperience opened my eyes to significant things I was missing.”“After spending a great deal of time trying to get my coach to understand my dilemma, I
felt that more effort went into to this than I expected.”“We got stuck in a rut on one issue and I couldn’t get out. My coach was somewhat
distracted and I never felt we were on the same page.”

The response rates for questionnaires were 92 percent and 80 percent for executives andcoaches respectively. Table 3 shows a listing of the skills and the rating, using a scale of 1 to 5
where 1 was “no change in the skill” and 5 was “exceptional increase.”© 2008 ROI Institute, Inc. All rights reserved.

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Executive
Rating*
4.2
4.1

Coach
Rating*
3.9
4.2

Measures
Translating feedback into action plans
Involving team members in projects and goals
Communicating more effectively with the
4.3
4.1
team
Collaborating more with the group and others 4.2
4.2
Applying effective leadership skills
4.1
3.9*Program value scale 1‐5, where: 1 = No change in skills
5 = Exceptional increase.
Table 3. Application of Coaching

Barriers and Enablers
With any process, there are barriers and enablers to success. The executives were asked toindicate the specific barriers (obstacles) to the use of what was learned in the coachingsessions. Overall the barriers were weak, almost nonexistent. Also, they were asked to indicate
what supported (enablers) the process. The enablers were very strong. Table 4 shows a list of
the barriers and enablers.

Barriers• Not enough time
• Not relevant• Not effective when using
the skill• Manager didn’t support it

Enablers• Coach• Action plan
• Structure of CBI• Support ofmanagement

Table 4. Barriers and Enablers of the Coaching Process

ImpactSpecific business impact measures varied with the individual but, for the most part, were in the
categories representing the five priority areas. Table 5 shows the listing of the actual datareported in the action plans for the first measure only. The table identifies the executive andthe area of improvement, the monetary value, the basis of the improvement, the method of
converting the monetary value, the contribution from coaching, the confidence estimate of thecontribution, and the adjusted value. Since there are three measures, a total of all three tables
are developed. The total for the three is $1,861,158.
© 2008 ROI Institute, Inc. All rights reserved.

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ACTUAL DATA REPORTED – BUSINESS IMPACT FROM COACHING
Exec #
1
2
3
4
5
6
7
8
9
10

Measurement Area
Revenue growth
Retention
Retention
Direct cost savings
Direct cost savings
Direct cost savings
Retention
Cost savings
Direct cost savings
Efficiency

11
12
13
14
15
16
17
18
19
20
21
22

Retention
Productivity
Retention
Retention
Retention
Cost savings
Cost savings
Direct cost savings
Revenue growth
Revenue
Revenue
Revenue growth

Total Annual
Value$ 11,500
175,000
190,000
75,00021,00065,000150,000
70,0009,443
39,000215,000
13,59073,000120,000
182,000
25,90012,32018,950103,100
19,50021,230105,780
TOTAL $1,716,313

Basis
Profit margin
3 turnovers
2 turnovers
From cost statements
Contract services
Staffing costs
2 turnovers
Security
Supply costs
Information technology
costs
4 turnovers
Overtime
1 turnover
2 annual turnovers
4 turnovers
TravelAdministrative support
Labor savings
Profit margin
ProfitProfit %Profit margin

Table 5. Business Impact from Coaching

I ANALYSIS PLAN
© 2008 ROI Institute, Inc. All rights reserved.

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Method for Converting
Data
Standard valueStandard valueStandard value
Participant estimate
Standard valueStandard valueStandard valueStandard value
N/A
Participant estimate

Contribution
Factor
33%
40%
60%
100%
75%
70%
50%
60%
70%
70%

Confidence
Estimate
70%
70%
80%
100%
70%
60%
50%
90%
90%
80%

Standard valueStandard valueStandard valueStandard valueStandard valueStandard valueStandard value
Participant estimate
Participant estimate
Standard valueStandard valueStandard value

75%
75%
50%
60%
40%
30%
75%
55%
75%
85%
80%
70%

90%
80%
80%
75%
85%
90%
90%
60%
90%
75%
70%
50%

Adjusted Value$ 2,656
49,00091,20075,00011,02527,30037,50037,8005,949
21,840145,125
8,154
29,20054,00061,880
6,993
8,316
6,253
69,592
12,431
18,88937,023TOTAL $817,126
2nd Measure Total $649,320
3rd Measure Total $394,712
TOTAL Benefits $1,861,158

Figure 7 shows a completed action plan from one participant, Caroline Dobson (executive #11).
In this example, Caroline reduced annual turnover to 17% from 28% ‐ an improvement of 11%.
This represented four turnovers on an annual basis. Using a standard value of 1.3 times basesalaries for the cost of one turnover and adding the total base salaries yields a total cost savingsof $215,000.
As mentioned earlier, the estimates were used to isolate the benefits of coaching. After theestimates were obtained, the value was adjusted for the confidence of the estimate.
Essentially, the executives were asked to list other factors that could have contributed to theimprovement and allocate the amount (on a percentage basis) that was directly attributable tocoaching. Then, using a scale of 0% (no confidence) to 100% (total certainty), executives
provided the confidence levels for their estimates.
ROI
The costs were fully loaded and included both the direct and indirect costs of coaching.
Estimates were used in some cases. Table 6 shows the costs of coaching for all 25 executives inthe study.
Item
Needs Assessment/Development
Coaching Fees
Travel Costs
Executive Time
Administrative Support
Administrative Overhead
Telecommunication Expenses
Facilities (Conference Room)
Evaluation
Total

Cost
$ 10,000
480,000
53,0009,200
14,000
2,000
1,500
2,100
8,000
$ 579,800

Table 6. Costs of Coaching 25 Executives

Only a small amount of initial assessment cost was involved and the development cost wasminor, as well, because the coaching firm had developed a similar coaching arrangement
previously. The costs for sessions conducted on the phone were estimated, and sometimes a
conference room was used instead of the executive offices.

© 2008 ROI Institute, Inc. All rights reserved.

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COMPLETED ACTION PLAN
Name:
Caroline Dobson
Objective:
Improve retention for staff
Improvement Measure:
Voluntary turnover

Coach:

Pamela Mills
Evaluation Period:
January
Current Performance
28% Annual

Action Steps

Analysis

Meet with team to discuss reasons for turnover – using
problem‐solving skills.

31 Jan2.

Review exit interview data with HR – look for trends andpatterns.

15 Feb3.

Counsel with “at‐risk” employees to correct problems andexplore opportunities for improvement.

1 Mar

4.

Develop individual development plan for high‐potential
employees.

5 Mar

5.

Provide recognition to employees with long tenure.

Routinely

6.

Schedule appreciation dinner for entire team.

31 May7.

Encourage team leaders to delegate more responsibilities.

31 May8.

Follow‐up with each discussion and discuss improvement orlack of improvement and plan other action..

Routinely

9.

Monitor improvement and provide recognition whenappropriate.

11 May1.

Follow‐Up Date
1 September
toJulyTarget Performance
15% Annual

A. What is the unit of measure? One voluntary turnover
B. What is the value (cost) of one unit? Salary × 1.3
C. How did you arrive at this value?
Standard Value

D. How much did the measure change during the evaluation period? 11% (annual %)(4 turnovers annually)

E. What other factors could have contributed to this improvement?
Growth opportunities, changes in job market

F. What percent of this change was actually caused by this program?
75%

G. What level of confidence do you place on the above information?
(100% = Certainty and 0% = No Confidence) 90%

Intangible Benefits: Less stress on team, greater job satisfaction
Comments: Great Coach – He kept me on track with this issue.

Figure 7. An Example of an Executive’s Completed Action Plan

© 2008 ROI Institute, Inc. All rights reserved.

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Using the total monetary benefits and total cost of the program, two ROI calculations can be
developed. The first is the benefit‐cost ratio (BCR), which is the ratio of the monetary benefits
divided by the costs:
BCR =$1,861,158$579,800= 3.21This value suggests that for every dollar invested, $3.21 was returned. The ROI formula forinvestments in training, coaching, or any human performance intervention is calculated in thesame way as for other types of investments: earnings divided by investment. For this coachingsolution, the ROI was calculated thus:
ROI (%) =$1,861,158 – $579,800$579,800

× 100 = 221%In other words, for every dollar invested in the coaching program, the invested dollar was
returned and another $2.21 was generated. In this case, the ROI exceeded the 25% target.
Intangibles
As with any project, there were many intangibles revealed by this analysis. Intangibles werecollected on both the follow‐up questionnaire and the action plan. Two questions were
included on the questionnaire; one involved other benefits from this process and the otherasked for comments about the program. Some individuals indicated intangibles when theylisted the comments. Also, the action plan contained a place for comments and intangibles. The
intangible benefits identified through these data sources included:• increased commitment• improved teamwork• increased job satisfaction• improved customer service• improved communication.
Note that this list includes only measures that were identified as being an intangible benefit byat least four of the 25 executives. In keeping with the conservative nature of the ROI
Methodology, it was decided that intangibles identified by only a couple of executives would beconsidered extreme data items and not credible enough to list as an actual benefit of the
program.
Credibility of the ROI Analysis
The critical issue in this study is the credibility of the data. The data were perceived to be very
credible by the executives, their immediate managers, and the coaches. Credibility rests oneight major issues:© 2008 ROI Institute, Inc. All rights reserved.

171. The information for the analysis was provided directly by the executives. They had noreason to be biased in their input.
2. The data was taken directly from the records and could be audited.
3. The data collection process was conservative, with the assumption that an unresponsive
individual had realized no improvement. This concept‐‐no data, no improvement‐‐isultraconservative in regard to data collection. Three executives did not return thecompleted action plans.
4. The executives did not assign complete credit to this program. Executives isolated only aportion of the data that should be credited directly to this program.
5. The data was adjusted for the potential error of the above estimate.
6. Only the first year’s benefits were used in the analysis. Most of the improvements
should result in second and third‐year benefits.
7. The costs of the program were fully loaded. All direct and indirect costs were included,
including the time away from work for the executives.
8. The data revealed a balanced profile of success. Very favorable reaction, learning, andapplication data were presented along with business impact, ROI, and intangibles.
Collectively, these issues made a convincing case for the CBI program.

COMMUNICATION STRATEGY
To communicate appropriately with the target audiences outlined in the ROI analysis plan,
three specific documents were produced. The first report was a detailed impact study showing
the approach, assumptions, methodology, and results using all the data categories. In addition,
barriers and enablers were included, along with conclusions and recommendations. The second
report was an eight‐page executive summary of the key points, including a one‐page overview
of the methodology. The third report was a brief, five‐page summary of the process and results.
These documents were presented to the different groups according to the plan in Figure 8.
Audience
Executives
Managers of executive (senior
executives)
SponsorDocument
Brief summary
Brief summary
Complete study, executive
summary
Complete study
Complete study, executive
summary
Brief summary

NHLO staff
Learning and development council
Prospective participants

Figure 8. NHLO’s Plan for Communicating Evaluation Results

Because this was the first ROI study conducted in this organization, face‐to‐face meetings wereconducted with the sponsor and other interested senior executives. The purpose was to ensurethat executive sponsors had a clear understanding of the methodology, the conservative© 2008 ROI Institute, Inc. All rights reserved.

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assumptions, and each level of data. The barriers, enablers, conclusions, and recommendations
were an important part of the meeting. In the future, after two or three studies have been
conducted, this group will receive only a one‐page summary of key data items.
A similar meeting was conducted with the learning and development council. The council
consisted of advisors to NHLO—usually middle‐level executives and managers. Finally, a face‐to‐face meeting was held with the NHLO staff at which the complete impact study wasdescribed and used as a learning tool.
As a result of this communication, the senior executive decided to make only a few minor
adjustments in the program and continued to offer CBI to others on a volunteer basis. They
were very pleased with the progress and were delighted to have data connecting coaching to
the business impact.

QUESTIONS FOR DISCUSSION
1.
2.
3.
4.
5.
6.

How did the decision to conduct an ROI study influence the design of thecoaching program?
Critique the evaluation design and method of data collection.
Discuss the importance of getting participants committed to provide quality
data.
What other strategies for isolating the impact of the coaching program could
have been employed here?
Discuss the importance of credibility of data in an ROI study.
How can the outcomes of coaching be linked to your organization’s businessobjectives?

ABOUT THE AUTHOR
As a world‐renowned expert on measurement and evaluation, Jack J. Phillips is chairman of the ROI
Institute. Through the Institute, Phillips provides consulting services for Fortune 500 companies andworkshops for major conference providers throughout the world.
Phillips is also the author or editor of more than 30 books—at least 10 about measurement andevaluation—and more than 100 articles. Books most recently authored by Jack Phillips include Show Me
the Money: How to Determine ROI in People, Projects, and Programs (Berrett‐Koehler, 2007); Proving
the Value of Meetings & Events: How and Why to Measure ROI (ROI Institute, MPI, 2007); Building a
Successful Consulting Practice (McGraw‐Hill, 2006); Investing in Your Company’s Human Capital:
Strategies to Avoid Spending Too Much or Too Little (Amacom, 2005); Proving the Value of HR: How and
Why to Measure ROI (SHRM, 2005); The Leadership Scorecard (Elsevier Butterworth‐Heinemann, 2004);
Managing Employee Retention (Elsevier Butterworth‐Heinemann, 2003); Return on Investment inTraining and Performance Improvement Programs, 2nd ed. (Elsevier Butterworth‐Heinemann, 2003);
The Project Management Scorecard, (Elsevier Butterworth‐Heinemann, 2002); and How to Measure
Training Results (McGraw‐Hill, 2002). Dr. Phillips served as series editor for ASTD’s In Action casebook
series, an ambitious publishing project featuring 30 titles. He currently serves as series editor for Elsevier
Butterworth‐Heinemann’s Improving Human Performance series, and for Pfeiffer’s new series on
Measurement and Evaluation. He can be reached at jack@roiinstitute.net.
© 2008 ROI Institute, Inc. All rights reserved.

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