vPsychology for Business

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We are dedicated to bringing out the best in you and your employees
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Volume 3, Number 23                                                             November 15, 2002

http://www.psychologyforbusiness.com/

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Psychology for Business is a free e-mail newsletter written by  Dr. John Weaver, Dr. Lynda Dahlke, and Dr. Paul Glass, business psychologists and independent consultants. It is published bi-weekly. You’ve received this newsletter because you’ve subscribed to it or it was forwarded to you by a friend or colleague. To subscribe sign up at our website, http://www.psychologyforbusiness.com/. If you wish to cancel your subscription, please see the end of this e-mail for easy instructions

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EFFECTIVE EXECUTIVE LEADERSHIP

by Dr. John Weaver, Business Psychologist and Executive Coach

The value of executive leadership has been difficult to measure.  However, the recent studies examining the effectiveness of coaching suggest that leadership can be a prime factor in the success on an organization and that the one-on-one guidance and accountability provided by a coach can substantially increase effectiveness.

There have been few studies looking at the outcomes for executive coaching, but those that have been done have consistently shown dramatic results.  Most of the studies have measured the return on investment in excess of 500 percent!  Several of the studies have pushed those numbers even higher. 

Initially these results were very exciting for me.  It was verification of the benefits to the executive coaching I offered for my clients on the bottom line of their organizations.  I told everyone who would listen. 

What happened next was disconcerting for me.  When I shared the results of the executive coaching studies, I received little response.  I could see the disbelief in the eyes of my audience. 

Too Good to be True?

These results are too good to be true. 

We are used to hearing about the most recent scientific breakthrough, only to find that the studies were flawed or that some other researcher obtained contradictory results.  It is all very confusing, so after a while, we stop listening. 

How could the ROI be that good?  We are delighted if a stock offering yields a 20% return at the end of a year.  (Right now we might be grateful if we could at least break even.)  A return of 500% seems impossible.  And we assume that later studies will offer a necessary corrective to these numbers.  If there is a positive ROI, it must be more modest. 

After my excitement wore off, I wondered about the same questions.   

Statistical results often become more modest as more and more samples are gathered.  The technical term is “regression to the mean,” which describes the tendency for results to become “average” as the number of samples is increased.  There were several studies that all pointed in the same direction, but coaching is still a new profession that has received very little research. 

How robust were the measures in the studies that were done?  Some studies obtain dramatic results in one area, but those effects are mitigated by other factors that might be negatively affected.  Organizations are systems, and changes in one area might have unintended consequences in another.  I knew of no studies, so far, that suggested there might be mitigating factors, but those factors could occur. 

Of course, coaching services are a relatively small investment for an executive.  Let’s assume that your organization pays $800 per month for four hours of coaching.  In order to obtain a 500% return, the executive would need to generate only $4,000 per month more for the bottom line.  Over a year’s time the investment ($800 X 12 months) would be $9600.  The expected increase in the bottom line would be $48,000. These are modest numbers for a medium to large sized company.  (The impact, of course, grows exponentially as more members of the leadership team are involved.) 

And then it struck me.  This number is only too good to be true if we really do not believe that leadership has an impact on results. 

Too Important to be Missed!

The studies on coaching were demonstrating that leadership matters.  The effective coach is working, one-on-one, to improve the leadership of the organization by listening, advising and holding the executives accountable.  The ROI is not about coaches, it is demonstrating that good leadership makes a positive impact on the bottom line. 

Many organizations have under-invested in the leadership resources they have.  Individuals are promoted through the company because they have excellent performance in the technical skills of their profession.  That does not make them good leaders.  In other companies, the executives are drawn from those with business acumen or solid financial training, but without much background that prepares them to deal with the “people problems” of the organization. 

Seminars and training sessions are helpful and also show good (if more modest) return on investment for leadership training.  In the best of these seminars, training focuses on the skills necessary to lead people, not simply to manage events or control inventory. 

But the most effective leadership training takes place in the one-on-one relationship that characterizes executive coaching.  It is here that all of the knowledge and skill that an executive brings can be applied to the real life, day-to-day situations that this company faces.  It is here that the theories become reality.  It is here that good habits are formed.  It is here that "leadership potential" becomes leadership. 

I actually hope for the day that the ROI for executive coaching may become more modest because it will mean that executives are leading more effectively. But it will never become optional in an organization that believes that leaders are important.  

The ROI for executive coaching is not too good to be true, it is too important to be missed. 

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On Executive Coaching:  "I absolutely believe that people, unless coached, never reach their maximum capabilities." Bob Nardelli, CEO, Home Depot

Did you know that executive coaching is not geographically limited?  Coaching by telephone is effective.  It is also an efficient use of time and resources.  You never need to leave your office to travel, nor do you need to pay travel expenses for your coach. We offer coaching either onsite or by telephone. To find out if coaching is right for you, contact us to schedule a FREE 1/2 hour consultation.  Or request a price sheet to determine the best value for your organization.  Call us at: (262) 789-2728 or email us at mailto:jweaver@psychologyforbusiness.com. ============================================================================================================

About the Author

John Weaver, Psy.D. is a licensed psychologist with 22 years’ professional experience working with organizations, groups, and individuals. He has experience leading groups and creating teamwork in organizations. His areas of expertise include executive coaching, conflict resolution, coaching teams and individuals to improve performance under stress, assessing employees and potential employees to ensure the right person for the right job, and training in stress management and "The Vitamin C’s for an Emotionally Healthy Workplace."  He is an experienced professional speaker and published author.

Based in Waukesha, WI, Dr. John Weaver is available for consultation or executive coaching by phone, e-mail or in person. He may be reached at (262) 789-2728 (office) or (414) 491-8719 (cell), by e-mail: mailto:jweaver@psychologyforbusiness.com or: 

John Weaver, Psy.D. 
Psychology for Business
2717 North Grandview Boulevard, Suite 303
Waukesha, Wisconsin, 53188

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Archives:  All our previous newsletters are archived at http://www.psychologyforbusiness.com/eNewsletter.htm. Check out the series on The Vitamin C’s of an Emotionally Healthy Workplace, the series on Dealing with Difficult Employees, links to our Published Articles and our newest series, Triple "A" Leadership.
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10 Questions to Ask Before Hiring a Coach is now available AT NO CHARGE for download only to readers of PSYCHOLOGY FOR BUSINESS by clicking on the title or visiting http://www.psychologyforbusiness.com/questions.htm.

Also receive your copy of  9 Ways to Motivate Your Workforce, also AT NO CHARGE by clicking on the title or visiting http://www.psychologyforbusiness.com/motivate.htm. 

If you are interested in having Dr. Weaver speak for your organization, contact him at mailto:jweaver@psychologyforbusiness.com?subject=SPEAK .
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To order your copy of the book, MANAGING DIFFICULT PERSONALITIES IN THE WORKPLACE: A Manager’s Practical Guide, by Dr. Paul Kenneth Glass, send your name, address, number of copies desired and a check made out to Dr. Paul Kenneth Glass for $12 per book (plus $2 shipping per book).  Or order 10 or more copies for $10 per book and $6.95 for shipping (up to 50 copies).  No fluff, this book gets right to the point. Send orders to:

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If you would like to learn more about Dr. John Weaver (mailto:jweaver@psychologyforbusiness.com), Dr. Lynda Dahlke (mailto:ldahlke@psychologyforbusiness.com), and Dr. Paul Glass (mailto:pglass@psychologyforbusiness.com) please visit us at our website: http://www.psychologyforbusiness.com/.

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© Copyright 2002. All rights reserved. John Weaver. Distribution rights: The above material is copyrighted, but you may retransmit or distribute it to whomever you wish as long as not a single word is changed, added or deleted, including the contact information. If you would like to reprint part of this newsletter please contact me at mailto:jweaver@psychologyforbusiness.com to make arrangements.

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Sharing this newsletter with colleagues and friends, under these conditions, is encouraged.

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If you have a question or topic you would like to see covered, send your request to mailto:jweaver@psychologyforbusiness.com.

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Dr. John Weaver publishes another newsletter, co-authored by Darlene Weaver, THE CENTERED PENDULUM.  It is our firm belief that lifelong patterns of “being” (personality, attitudes, emotions) and “doing” (lifestyle, adaptability, coping skills) interact with our genes and environment to create conditions of a healthy or a diseased brain.  If you would like to read previous issues of the Centered Pendulum newsletter or to subscribe, please visit the archives at http://www.centeredpendulum.org/newsletters.htm.
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