Often we think that taking a risk or making a change can be costly. But what about the cost of inaction?
The Cost of Inaction: 5 Steps to Decide to Coach or Not
Recently I was struck by a couple of potential clients who decided not to hire any coach, and chose to live a life they didn’t enjoy. Did you know that the cost of staying put can be up to 400% more than making a change? For an organization, it may cost up to $75,000 more to not coach an executive.
That may sound counterintuitive. Coaching looks like a huge expense. But the mistake is to perceive it that way—as an expense, not an investment—distorting your evaluation. The most common mistake is to avoid weighing the cost of the status quo in a decision. Excluding this factor biases your results, often in the wrong direction.
Poor decisions can be very expensive. Here is a simple exercise to evaluate a potential investment in coaching. We will use our proven Planting the Seeds of Change process. (Download the file I have created for you here.)
1. Preparing the Ground: Evaluate the Status Quo
To prepare the ground, awareness is key. It’s common to want to jump right into the process, and to skip researching when you want to make a change in your life, career, or organization. Making decisions based on what we think we know limits our outcomes.
So take a sheet of paper (or open a spreadsheet) and draw six columns, A–F. Begin in Column A by listing all the benefits of not making a change, of putting it off for good. Be exhaustive. Consider emotional, financial, spiritual and physical benefits of sticking with how things are.
In Column C (yes, skip B for the moment), write down all the risks and costs of postponing change. For instance, the financial loss from not applying for the next promotion. Or the cost of continuing to be bullied at work. Or the cost of stress on your family or relationship due to a toxic work environment, which could possibly lead to divorce or chronic health issues down the line.
As human beings, we have incredible strength to cope with the worst situations and to accept them because we think it is our only choice. But we must consider all the costs of doing so.
Think long-term. What will happen six months from now? A year? Ten years from now? Going through this exercise should bring to light issues you hadn’t noticed before.
2. Fertilize the Soil: Value the Pros and Cons
Now, in Column B, set a financial price for each benefit in Column A, as if you bought it in a store. Someone looking at a stagnant career for 15 years might have written “financial stability” as a benefit, yet she might have given up a $15,000 raise—that is the price.
In Column D, set a value for each risk or cost in Column C. For instance, the cost of your stress on your family may create $1,500 in additional medical or counseling expenses each year, or trigger a $20,000 divorce.
Total up both columns for greater insights into your priorities. Which is more, the benefits of the status quo or the costs? Do not beat yourself up if you find an expensive status quo. The good news is that you are here today with renewed awareness.
Price tags give us a sense of what we value in life. This exercise helps you see where your efforts to change could pay off. Discuss your results in open conversation with family and friends.
3. Planting the Seeds of Change: Understand Cost vs. Investment
Cost is commonly seen as an expense, where no value is created. By this definition, money, energy, work, and time are simply gone, down the drain, plain and simple.
A better way to look at change is as an investment, which implies you will create increased value later in the form of energy, opportunity, time, satisfaction, and financial gain. Investing allows you to move forward and become who you want to be.
A great example of investment for change is going back to school. It’s a big expense in terms of time, money and effort, but your future can significantly shift once you graduate. You are beginning to see the fuller picture now!
Awareness is a gift that cannot be returned. If the cost of coaching is totally offset in the value created for you and your loved ones, would you invest the necessary time, money and energy to make it happen? As of today, no person nor organization has answered me “no.” That is significant. Stretching to invest in change can often return a high yield.
4. Watering the Plants: Add Up the Benefits of Change
The next step is to support the growth of those awareness seeds. In Column E, write out the benefits of making a change. Again, be exhaustive. List the impact on finances, self-esteem, opportunities for future growth, your satisfaction, self-development, relationships, better vacations, and other results.
In Column F, set a value amount next to each item. A promotion might increase your salary 20%, yet create even more valuable opportunities for growth or networking. What other secondary benefits can you think of?
Now total up the benefits of change and compare it to the cost of hiring a coach.
For example, I worked with a manager who had been denied a director position three years earlier. Since she hadn’t applied for advancement since, her leader encouraged her to hire an executive coach. After this exercise, she realized that the status quo cost her $78,000 over the past three years, including a lack of confidence that hurt her personal relationship. That news did not sit well with her, and she jumped into coaching.
After this exercise, those who said coaching was too expensive usually realize that the cost of doing nothing (time, energy, money) can far exceed the changes they will make (with coaching).
5. Pruning the Leaves: Re-Evaluate Regularly
Re-evaluate your progress quarterly or semiannually and tweak. Keep investing in change wisely, with this full evaluation, instead of wasting energy and money maintaining an expensive status quo.
The only constant is change. No excuses anymore. Keep going, embracing change! My goal as a coach is to help you move through it more painlessly. How can I help you today?
Let us know what you find in the comments below. Rate our show on iTunes so we can continue to help you plant the seeds of change in your life, career, organization, community, and in the world.