The ROI Myth: Why We Need to Stop Measuring Coaching Like a Marketing Campaign
Here’s a conversation I have at least once a quarter:
Procurement: “What’s the ROI on executive coaching?”
Me: “That’s the wrong question.” : [visible confusion]
Let me explain why this seemingly reasonable question reveals a fundamental misunderstanding about how executive coaching actually works.
The classical definition of Return on Investment is elegantly simple: take your gain from an investment, subtract the cost, divide by the cost, and multiply by 100. It’s a formula that works beautifully when you’re evaluating a new CRM system that reduces your sales cycle time by 15%, or a marketing campaign that generates 500 qualified leads, or equipment that cuts production costs by $200,000 annually. These interventions operate in relative isolation. You can track inputs and outputs, and you can attribute results with reasonable confidence.
Coaching doesn’t work that way. It never has, and it never will.
When a CEO works with a coach and then makes a bold strategic pivot that transforms the business, what actually caused the success?
- Was it the coaching conversations themselves?
- The CEO’s personal readiness to finally act on what they’d been avoiding? Market conditions that created new urgency?
- The executive team’s alignment around a shared vision?
- A triggering event like board pressure or a competitive threat?
The honest answer is all of the above, operating simultaneously in ways that are impossible to disaggregate.
This is where the classical ROI model breaks down entirely.
Coaching is not a transaction. It’s a strategic, relational, developmental intervention embedded in a complex human system. It influences decision quality, executive presence, strategic thinking, team dynamics, and organizational agility. These outcomes are multifactorial, interconnected, and often emerge over months or years.
There is no single inflammatory trigger you can monetize and attribute solely to the coaching engagement.
Consider a real scenario I encountered recently. A Chief Revenue Officer engaged in six months of executive coaching. During that same period, revenue increased by 22%, sales team retention improved significantly, a major partnership deal closed, and the CRO successfully navigated a difficult reorganization. Classical ROI logic would demand an answer to this question:
“How much of that 22% revenue lift came from coaching?”
The intellectually honest answer is that it’s impossible to say. But that doesn’t mean coaching had no impact. The coaching helped the CRO negotiate the partnership with greater confidence, make a critical hiring decision with unusual clarity, communicate the reorganization in a way that built trust rather than fear, and think more strategically about market positioning. Each of these contributions influenced the business outcomes. Each was essential. But none can be isolated and assigned a clean percentage.
This creates a dilemma for organizations that have been trained to evaluate every investment through a purely financial lens. If we can’t calculate a classical ROI, does that mean coaching has no measurable value? Absolutely not. It means we need better language and better questions.
What we actually need is what I call Strategic Impact Assessment. Instead of asking “what’s the ROI,” we should be asking:
- What changed in the leader’s behavior, decision quality, and strategic thinking?
- What measurable business outcomes occurred during and after the engagement
- What leadership capabilities were built that will continue to drive value long after the coaching relationship ends?
- And perhaps most importantly, what would have happened without this intervention?
That last question is the most revealing. When you ask senior leaders to consider the counterfactual—what would have occurred if they hadn’t invested in developing their leadership capability at a critical moment—the value becomes startlingly clear. The wrong hire that didn’t happen. The strategy misalignment that was caught early. The team conflict that was resolved before it metastasized. The market opportunity that was seized because the leader had the courage and clarity to act.
This isn’t weaker than classical ROI. It’s more intellectually honest.
Executive coaching is not a line-item expense you evaluate like software licensing. It’s a strategic investment in leadership capability, and leadership capability drives every outcome that matters in your organization.
If your organization is demanding classical ROI on coaching, you’re facing one of two situations. Either you’re working with stakeholders who don’t yet understand how strategic interventions actually work, or you’re failing to educate your buyers on the true nature of leadership development.
Neither is insurmountable, but both require a different conversation than the one most coaches are having.
The question was never
“What’s the ROI?” The question is: “Can we afford not to invest in the decision-making quality of our most critical leaders?”
QUESTIONS FOR YOU …
“If classical ROI doesn’t work for coaching, what metric has actually moved the needle with your toughest stakeholders?”
“Honest question: Do you push back when buyers demand ROI on coaching—or do you try to manufacture numbers to close the deal?”
“What will it take for our industry to stop defending coaching with made-up ROI calculations?”
“C-suite leaders: What would you need to see to approve a 6-figure coaching engagement without an ROI calculation?”
Want to learn how to position coaching as a strategic business imperative? Join the conversation at the Association of Corporate Executive Coaches (ACEC)—where coaches are enterprise-wide business coaches with their clients. Join us, for more information contact us at….. info@acec-association.org
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