Ever thought that coaching is soft and fluffy and not linked to the bottom line?
This is a case study any CFO or CEO sceptical about coaching delivering a tangible profit should read.
Case Study – Foster’s EMEA: A £200k Investment in coaching over 2 years was instrumental in delivering profit and cash initiatives of more than £10m.
As CFO at Foster’s EMEA, my key focus was how to find new and innovative ways to deliver substantial profit improvement. It seemed logical that performance coaching might have a role to play, but I was sceptical.
As a Leadership team we had recently completed an acquisition, and as often happens, we were experiencing chaos and under-performance. We were experiencing stress, friction and lack of focus. We each had different challenges, function by function, grappling with our organisational capability and our own different strengths and weaknesses – professional and personal. And as a team, we were not performing either. We were infighting on turf issues and we were fire fighting just to hit business targets month by month. We lacked a clear strategic agenda and our execution was variable.
We were coached individually and as a team over a 6-12 month period. It challenged each of us on how we were managing our own leadership effectiveness and our key stakeholder relationships. It was a like taking a cold, hard look in a mirror; these were some of the toughest conversations I have ever had. The team coaching sessions over several days really made us stand back and look at our longer term direction, our mission and our goals – and thrash through how to work more effectively together and get genuine alignment. We faced up to some elephants in the room and didn’t allowing anything to be swept under the carpet. The fact that we were being coached individually AND as a team meant that issues that were coming up in the group could be taken off line in the 1:1 sessions, and vice versa.
The leadership team moved up to a totally new level of teamwork effectiveness, collaborative working and conflict resolution. We were calmer, more energised and focused, and our discipline and patience with each other improved, as did the quality of our analysis and judgement. We created a new clarity of purpose and key strategic platforms, with clear linkage to financial outcomes that enabled us to commit to targets and double our profit in 3 years.
As we started working together at a different level, the silos suddenly started breaking down at the levels below, and people started really collaborating on key issues like basic synchronisation and alignment of Sales and Marketing programmes, key controls around customer investment analysis, resolving conflicts amongst our teams and addressing talent issues “head on”. Our new awareness of coaching caused us to start directing more of our attention to their needs and supporting them.
All this accelerated speed and effectiveness of decision making and implementation – holding the course on key commercial and strategic projects to deliver substantial profit outcomes eg. switching manufacturing sourcing and distribution models, major innovation and brand initiatives, and developing new customer and route to market models. These initiatives delivered in excess of £5m bottom line benefit, and would not have done so without the enabling impact of the leadership coaching programme. And our short term performance started tracking more closely towards our targets.
The Roll Out
As the bottom line benefits became clearer day by day, the next question was: how do we get this benefit rolled out to the wider business, to get individuals and teams performing at all levels across the organisation? Our decision was to invest in “in-house” coaching capability. I stepped up to volunteer to become qualified as a coach (15 days over 6 months) and I became coaching champion for the business, and we started running training workshops and developing a cadre of coaching champions. People asked, why is the CFO spending time on this? The answer was simple: it was about profit and cash.
The Bottom Line Impact
Coaching started to become a skill and a habit in every corner of the business, and the benefits multiplied and trickled down. Suddenly the finance team was collaborating with the Marketing and Sales teams at a new level to deliver higher ROI on sales and marketing promotions and cut out non-productive investments, as well as making dramatic improvements in invoicing and debt collection processes to drive cashflow. A step change in teamwork of Finance and Supply Chain teams were uncovering much bigger financial benefits than had previously been imagined or realised – finding ways to reduce stock write-offs and other inefficiencies. Again, another £5m+ benefit to the bottom line, profit and cash. The business achieved our 3 year profit and cash targets, and was a transformed business.
Our investment in coaching was approximately £200k over 2 years, and was instrumental in delivering profit and cash initiatives of more than £10m. And employee engagement increased to the highest levels in Foster’s globally, with knock on “softer” benefits to health and wellbeing as well as motivation and performance.
It is of course very difficult to isolate exactly how much coaching contributed to the profit outcomes – there were obviously a lot of other things going on over the same timeframe. But there is no doubt that coaching was absolutely at the heart of and was the trigger for a lot of the change that happened – initially for the key individuals at the top of the organisation, for a leadership team and its strategic growth agenda, and then across the wider business with many specific projects and initiatives that delivered profit results.
There are few businesses that have genuinely embraced this kind of comprehensive coaching culture change programme, but for most it’s getting harder than ever to find new ways to unlock profit and cash potential – if this is true in your business, take a closer look at coaching.
Stuart Pickles, ex-CFO of Foster’s EMEA, now consultant partner at LIW Leadership.