Business coaching: a waste of money?

I should probably declare up front I’ve squandered a lot of cash on business coaching. The worst of the lot was $14,000 for a 12-month commitment – a mighty sum even by today’s standards let alone 15 years ago.

I forked out another $6000 in 2018 for a term that lasted half a year and was just as effective. That is to say, not effective. And I have a friend who still reminds me of the $30,000 he invested (and lost) in a business coach whose services he abandoned well before the end.

Millions are spent on "an array of obscure motivational consultancies."
Millions are spent on “an array of obscure motivational consultancies.” Credit:iStock

So it was with somewhat of a wry grin I read in the Australian Financial Review last week of APRA’s expenditure on “an array of obscure motivational consultancies”. The prudential regulator’s prudent recordkeeping revealed $1.5 million had been spent in the preceding two years on coaching-related contracts, attracting the scrutiny of finger-pointing critics.

Use of the term “finger-pointing” is intentional because it’s most commonly associated with apportioning blame, oftentimes unfairly when there might indeed be value for money in engaging a business coach. The crude retelling of my own experiences, dramatised with words like “squandered” and “abandoned”, may similarly be unfair characterisations of what many perceive as an indispensable feature of their professional development.


As with any question requiring a reliable and convincing answer with substance, I rely never on anecdotal feedback (like mine) and always on the latest peer-reviewed empirical research. Evidence of this striking contrast is apparent in the most recent of these studies published earlier this year in the Journal of Management Development.

The scholars set the context for their study by acknowledging the “quantitative evidence in support of coaching is inadequate”, leading many coaches to “make untestable declarations of success”. That in itself is a startling admission but fertile ground for further analysis.

The analysis scrutinised the influence of coaching based on the perceptions of 52 supervisors and leaders across numerous industries who had completed an extended engagement with a business coach and the outcomes that ensued. Their findings revealed, as a “direct result” of coaching, that:

  • 81 per cent of participants claimed to have experienced a “significant” or “radical” improvement to their leadership effectiveness.
  • 68 per cent used the same adjectives to describe the marked enhancement in their ability to make short-term decisions.
  • 67 per cent shared similar sentiments about their strengthened strategic clarity.
  • 58 per cent would recommend the coaching service to others.

At this point, a cynic would rightly object to the objectivity of those numbers. They are, after all, entirely subjective, dependent on little more than opinion, which is why it’s the measurable impacts that deserve the greatest attention. These are just as impressive:

  • 89 per cent saw their levels of employee engagement rise.
  • 82 per cent had increases in customer satisfaction.
  • 50 per cent reported an “extremely positive” return on investment. (An additional 32 per cent weren’t as emphatic but still attributed an unambiguously positive ROI.)

Again, those figures are impressions of the “direct result” generated by the coaching which of course doesn’t mean there’s a cause-and-effect relationship. What it does mean is that, when used in combination with many other tactics and strategies, a substantial majority of people who’ve undertaken business coaching praise the process as instrumental to their success.

The researchers conclude their case study by affirming coaching “can bring to the fore and strengthen personal attributes of managers giving rise to improved or new performance dimensions of companies in an ever more competitive marketplace”.

This isn’t a call for finger-pointing critics like me to suspend their cynicism. Neither is this meant to prompt any appointments with a business coach. It’s merely a little insight worthy of reflection. Or as countless coaches have no doubt counselled ad nauseum: whenever you point a finger at someone else, remember there are always three more pointing right back at you.

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