In today’s global economy, human capital represents a potential value of $1,215 trillion, 2.33 times that of physical capital (technology, real estate, inventory). Human capital is the greatest value creator available to organizations. For every $1 invested in human capital, $11.39 is added to GDP1. Investing in people can generate value for organizations over time that significantly exceeds initial financial outlay.

Two principles about value generation, when applied to the people in an organization, are very important to examine: potential and appreciation. The way a leader behaves in daily interactions influences perceptions and choices for action. Adopt a mindset that focuses on how what you offer as a coach generates value, and you have a starting point for co-constructing a useful measurement approach. That means that your measurement approach starts from the very beginning of building the relationship and gets incorporated to the contracting process so you, the client or team receiving coaching, and the enterprise are all clear-eyed about the impact coaching intends to produce.

Here are three overarching questions that must be part of designing every contract conversation so that you receive the information, perspective and assumptions that are active in the system of the enterprise and the leader’s and their team’s role.

1. What curiosity supports a purchaser to disclose what they want so you and they can partner, engage, and experience satisfaction and success through coaching?

2. What listening supports you as a coach to match your unique and credible invitation every time you are in front of a prospective purchaser for your coaching services?

3. What facilitates a purchaser to sustain commitment and change once a coaching engagement is complete that is part of what you offer as a coach?

These three questions are about the influence and impact that drives value for your clients. Your choice as a professional coach is to focus attention upon both influence – which is about the relationship experience you co-create with a client, team and the enterprise – and impact, which is about a shift in individual and business results through and after the coaching process. Effective contracting interactions always invite the client to reveal what most matters and emboldens commitment to development available through coaching. What most matters, by definition, includes what to measure that can be directly experienced and observed.

This is an extraordinary time to be leading an organization. There are both direct and indirect (or invisible) opportunity costs from ignoring investment in development that will cause any CFO pause. Incivility, even occasionally experienced, produces a negative ripple that becomes a wave only measured occasionally through engagement surveys, and even then, often misdiagnosed as something to fix transactionally, by some new project or campaign.

Failing to rebalance the tension between investment in productivity and investment in development has many consequences that influence value creation for a company. Coaching is first and foremost development-focused, so that leaders, teams, and the enterprise have a higher probability to improve productivity and results. Making this connection explicit in contracting is the key to a successful co-construction of a measurement approach.

Leadership educator Simon Sinek recently said, “Human skills are the skills required to be a better human being. It is the human skills that make better leaders.”

Perceptions are created and reinforced by leaders through daily interactions. Leaders who make learning and coaching important consistently return higher engagement and job satisfaction ratings. These are well-researched facts you can share in the contracting process.

When combined with the process framework in the table on the previous page, you have an empowering way to co-construct measurement.

Engaging in dialogue that reveals what a purchaser perceives to be the positive influence and impact of working with you in a coaching relationship begins to construct a meaningful value proposition tailored to each specific client. Along with this process, your experience of success in the past, your story of positive influence and impact is an empowering tool for generating more success. Your success stories demonstrate your unique value proposition that directly matches what the purchaser seeks.

Your past success, shared as a story, demonstrates alignment with the client situation and affirms your fit and value. That generates credibility. The process framework for contracting and establishing an agreement makes the relevant, tailored, specific, action-oriented, and measurable experience for the client transparent from the start.

Accountability by the client is high by virtue of being a co-creator of the solution design and the implementation at every stage.

RESOURCES:
Korn Ferry Institute 2016 Research (Updated in 2021) on Human Capital: Korn Ferry commissioned the Centre for Economics and Business Research to develop a robust economic model.

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Published in, and reproduced with permission from, choice, the magazine of professional coaching www.choice-online.com