Emotional Intelligence: the best predictor of leadership success?

15 Nov 2012

IQ, technical skills, strong management skills; these are all essential to successful leadership. But does emotional intelligence (EI) have a role to play? By Tara Rivkin (HGI Insight Nov 2012)

HGI’s editor of HGIinSight, Tara Rivkin, has written a series looking at EI and curiosity in the worlds of business and leadership. The article on curiosity and innovation will be published in the next edition.

Theories around the primary predictors of leadership success are varied and often disputed. Are IQ and certain personality traits like extraversion, openness and low neuroticism, as Antonakis¹ suggests, the primary predictors? Or is the correlation between IQ and job performance “underwhelming,” as Malcolm Gladwell has written?² Is the burgeoning inquiry area of emotional intelligence (EI) key?

Goleman’s seminal model of leadership performance positions EI ahead of traits customarily linked to leadership like assertiveness and toughness.³ He does not deny the efficacy of these qualities; he rather proposes that they do not constitute the entire picture. “It’s not that IQ and technical skills are irrelevant,” he writes. “They do matter, but mainly as ‘threshold capabilities’; that is, they are entry-level requirements for executive positions.”⁴ He cites studies such as David McClelland’s, whose research into a global food and beverage company revealed that EI qualities in senior managers lead to the outperformance in their divisions of yearly earning goals by 20%.⁵ Goleman’s own research found that successful performers in leadership positions differed from mediocre ones mainly (90%) by virtue of their emotional skills.6 The idea, in short, is as follows: senior executives arrive at their leadership positions because of their cognitive capabilities and certain advantageous personality traits, but they excel on account of their EI.

There are five elements that comprise EI in Goleman’s model:

How do these qualities translate into the real world? Chip Conley, Founder and Executive Chairman of Joie de Vivre Hospitality, the US’s second largest operator of boutique hotels, wrote an article for the Huffington Post outlining his research into Fortune 500 CEOs with good self-awareness, self-regulation, motivation, empathy, and social skills. His list includes Jamie Dimon, CEO of JP Morgan Chase, who himself extols the benefits of EI; Larry Fink of BlackRock, who holds EI seminars for his senior team and encourages self-reflection, teamwork, and healthy communication; Alan Mulally, CEO of Ford, who writes handwritten notes to his employees and has a “‘Clintonesque’ ability to make you feel like you’re the only one in the room when you’re in a conversation with him;”⁷ and, of course, Warren Buffett, whose empathy, motivation and insatiable curiosity has contributed to his immense success. Conley acknowledges others, all of whom possess the requisite IQ but who go that bit further by personalising the workplace and fostering culture-driven organisations that succeed and inspire employees.

Although these examples do not reveal a specific correlation between leadership style and company performance, they nevertheless reveal how EI, at the very least, enhances leadership and galvanises employees. Indeed, as Dasborough (2006) has empirically validated, “leaders evoke emotional responses in employees in workplace settings.”⁸ Thus, to be effective, it is imperative that leaders are adept at managing and tempering their own, and others’, emotions. As Jamie Dimon of JPMorgan Chase has said, “A lot of management skills are EQ, because management is all about how people function.”⁹

These individual and workplace attributes simply cannot be harnessed and maximised by leaders bereft of EI. For example, Bob Nardelli’s subpar leadership performance at Home Depot, according to Nohria, Groysberg and Lee, was partially caused by his myopic focus on “individual and store performance” ahead of “the spirit of camaraderie among employees (their drive to bond) and their dedication to technical expertise (a manifestation of the need to comprehend and do meaningful work).”¹⁰ Home Depot’s culture during his reign was hostile and employees felt they were not treated fairly. According to the authors, Nardelli barely improved Home Depot’s stock price during his six years there while the company’s primary contender, Lowe’s, improved by “taking a holistic approach to satisfying employees’ emotional needs through its reward system, culture, management systems, and design of jobs.”¹¹

So how can EI be retrieved practically from a deluge of theoretical research literature? How can leaders teach it, develop it within themselves, translate it into practice, measure it, and recognise it in prospective employees?

In Gladwell’s popular book of essays, What the Dog Saw, the endlessly curious writer refers to psychologists Robert Sternberg and Richard Wagner, who together designed test questions evaluating people’s ability to work productively and successfully with others. They developed this with a combined assessment that IQ is not enough; tacit, practical knowledge is also essential. “Tacit knowledge,” Gladwell writes, “involves things like knowing how to manage yourself and others and how to navigate complicated social situations.”¹² In short, a senior manager or employee may be a genius but they may have absolutely no capacity to work healthily and harmoniously alongside others.

Other ways of identifying and developing EI in the workplace are being practiced more and more in the field. Google, for example, has an initiative in place aimed at developing compassion, empathy and confidence in employees. Consulting Zen masters, psychologists, meditation experts and a CEO, Chade-Meng Tan, one of Google’s earliest engineers, created a widely lauded and wildly popular seven week ‘emotional intelligence curriculum’ entitled Search Inside Yourself (SIY) which cultivates EI through mindfulness programs addressing emotional mastery, attention training, self-knowledge, and cultivating positive mental habits. For further information and an explanation about why EI is important in the workplace read an interview with Meng, as he is known, here . To hear him speak about the program and about how you can learn EI, see here .

Another model comes from Zappos, an online shoe company with more than $1 billion in annual gross sales as of 2010.¹³ Before it moved from San Francisco to Las Vegas and rapidly grew, Tony Hsieh, the company’s CEO, Nick Swinmurn, its founder, and Fred Mossler attempted to interview every individual employee to ensure they fit the Zappos culture. This was no longer feasible after their move and as such, they found that there was some ambiguity within the hiring process as to what attributes adhered to their vision of a ‘culture fit.’ Because of this, they decided to develop a set of meaningful, applicable core values that managers could use when interviewing prospective employees. Consulting employees at all levels, they came up with a range of values from ‘Create fun and a little weirdness’ to ‘Build a positive team and family spirit’ to ‘Be Humble,’ finally tailoring specific interview questions for each and every value.

Zappos employees at all levels still refer to these regularly to this day.

¹Antonakis, J. ‘Why “emotional intelligence” does not predict leadership effectiveness: A comment on Prati, Douglas, Ferris, Ammeter, and Buckley,’ The International Journal of Organizational Analysis, 11 (4), 2003, pp. 355-361.
²Gladwell, M. What the Dog Saw: And Other Adventures. Hachette Book Group: New York, 2009, p. 350.
³Goleman, D. (2004). ‘What Makes a Leader?’ Harvard Business Review, http://hbr.org/2004/01/what-makes-a-leader/ar/1
⁴Goleman, ‘What Makes a Leader?’ Harvard Business Review
⁵Ibid.
⁶Ibid.
⁷Chip Conley (2011). ‘The Top 10 Emotionally Intelligent Fortune 500 CEOs,’ The Huffington Post, http://www.huffingtonpost.com/chip-conley/the-top-10-emotionallyint_b_911576.html
⁸Antonakis, J., Ashkanasy, N., Dasborough, M., ‘Does Leadership Need Emotional Intelligence?’ The Leadership Quarterly, 20 (2), 2009, pp. 247-261.
⁹Jamie Dimon quoted in Conley, ‘The Top 10 Emotionally Intelligent Fortune 500 CEOs,’ The Huffington Post
¹⁰Nitin Nohria, Boris Groysberg, Linda-Eling Lee (2008). ‘Employee Motivation: a powerful new model,’ Harvard Business Review, http://hbr.org/2008/07/employee-motivation-a-powerful-new-model/ar/1
¹¹Ibid.
¹²Gladwell, What the Dog Saw, p. 361.
¹³Tony Hsieh (2010). ‘How Zappos infuses culture using core values,’ Harvard Business Review, http://blogs.hbr.org/cs/2010/05/how_zappos_infuses_culture_using_core_values.html