Quadrant 3: Mark Gains Retention Benefits

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In his interview, Mark talked with pride about how he was able to

save two talented people from the chopping block.He attributed the

The Value Nexus: Organization Value and Individual Values 265

retention of these two people to the coaching he received and

the increased effectiveness of his team. Monetary benefits were

determined as follows:

1. The first step was to determine the total annualized monetary

benefit:

_ HR determined the total value of retaining a person at this

level to be at least $165,000. This value included the costs

to recruit, bring onboard, and train a replacement as well

as a conservative estimate of opportunity costs. To be extra

conservative, the benefits from only one of the two retained

people were included in the analysis.

2. The next step was to isolate the effects of coaching to produce

this benefit:

_ Mark attributed 75 percent of the retention benefit to

coaching and was 100 percent confident in this estimate.

$165,000 Ґ 75% Ґ 100% = $123,750

_ A total of $123,750 was added to the benefits pool.

Quadrant 4: Clare Increases Revenue in an Emerging Market

Clare was enthusiastic in the interview about how she was able to

spearhead a new integrated technology solution for a strategically

important emerging market. The first-year revenue from this

solution was expected to be at least $10 million. At the time of the

interview, the accounts receivable was already more than $5.5

million. Clare and her company had hit a homerun at a time when

it was especially needed. The icing on the cake was that this solution

was coming in at a healthy margin of 35 percent.Monetary benefits

were determined as follows:

1. The first step was to determine the total annualized monetary

benefit:

_ $5.5 million was used because this revenue had already been

invoiced to clients.While revenue was clearly going over this

266 Coaching That Counts

amount, and likely to go way over the $10 million projected

for the year, the $5.5 million was used to be extra conservative.

This was also an issue of timing. Had the value interview

been conducted six months later, more of that $10

million could have been used in the value equation. Timing

is everything!

_ The margin of 35 percent was used because benefits are

based on net revenue, not total revenue. In other words, the

costs associated with producing the revenue are taken out

of the benefits calculation.

$5.5 million Ґ 35% = $1,925,000

2. The next step was to isolate the effects of coaching:

_ Clare attributed 25 percent of the revenue increase to the

coaching she received and was 50 percent confident in her

estimate.

$1,925,000 Ґ 25% Ґ 50% = $240,625

_ A total of $240,625 was added to the benefits pool.

These examples illustrate how monetary benefits were calculated.

There were, of course, significant intangible benefits as well. Some

final points to reinforce about how these benefits were determined

are as follows:

_ Every coaching client was personally interviewed about his or

her experiences and probed for examples of application.

_ For those who successfully applied what they learned—and this

represents the vast majority of coaching clients—we further

explored how these applications potentially impacted business

results.

_ We adopted conservative evaluation procedures and calculations,

fully isolated the impact of coaching, and included fully

loaded costs.

The Value Nexus: Organization Value and Individual Values 267

_ The end result was a chain of impact being drawn from the

coaching experience to the business impact.

_ Monetary benefits were determined consistently across all

respondents and adhered to a set of standards.

This research should be viewed as the beginning of a formal

exploration of the full value coaching offers. The findings that are

offered are not meant to be definitive, but rather the opening to an

exciting line of research.