Corporate Leadership 2.0: Is Emotional Intelligence The New IQ?
“I understand” is arguably the most powerful short sentence in the English lexicon. Understanding is a building block of empathy, which is the ability to identify and interpret other people’s feelings.
According to a recent Verizon report, “empathy will be an asset” in the future of work where emotional intelligence looks set to take center stage. Simply put, emotional intelligence, also known as ‘emotional quotient’ (or EQ), is the capacity to recognize, understand and manage our own emotions and recognize, understand and influence the emotions of others.
Verizon surveyed 1,700 senior business leaders and found that, before COVID-19, less than 20% of respondents said EQ would be an important skill for the future. But since the lockdown, EQ increased in significance for 69% of respondents. So, what does EQ look like in practice?
Emotional intelligence illustrated: A tale of two corporate leaders
Meet Todd, an electrical engineer. Since COVID-19, he’s been working from home. After attending back-to-back virtual meetings every weekday, Todd complained to his manager, Jack, about having sore eyes, lacking focus and being mentally exhausted – symptoms consistent with ‘Zoom fatigue.’ Jack represents the traditional leadership style, which bears the hallmarks of centralized power, top-down hierarchy and command-and-control.
Unsympathetic, he considered Todd’s discomfort as par for the course and told him to “suck it up” and “take one for the team.”
By contrast, EQ-focused managers lead with empathy.
Unlike transactional leadership, the ultimate expression of EQ leadership is to empower employees to self-lead and act like co-managers. An empathetic manager (let’s call her Jill) would create a ‘safe space’ for Todd where he felt comfortable communicating his stresses. Initially, Jill would work with Todd to minimize them by understanding how he works, what his strengths and challenges are and so on. She would then take steps to cultivate a supportive workspace by, for example, suggesting that:
- Todd limit his participation in video calls and virtual meetings to those he considers essential;
- Where possible, Todd has work conversations on the phone, via email, etc; and
- Todd consider attendance at ‘virtual happy hour’ optional.
On this basis, Jack’s old school perspective misses the mark altogether whereas Jill’s EQ-driven approach ticks all the boxes.
Relationship between emotional intelligence and business success
Two thought leaders have hotly debated the relationship between EQ and business success: Daniel Goleman and Adam Grant. Goleman is a psychologist and co-director of the Consortium for Research on Emotional Intelligence in Organizations at Rutgers. In 1995, he authored Emotional Intelligence: Why It Can Matter More Than IQ, in which he argued that, when it comes to workplace success, non-cognitive skills, such as EQ, can matter just as much as IQ. His research at circa 200 global companies revealed that, while the characteristics traditionally associated with leadership such as intelligence, vision, determination and resilience are necessary to achieve success, the most effective leaders also exhibit high EQ, which consists of five components:
- Self-awareness: knowing their emotions and their effect on other people;
- Self-regulation: managing their emotions;
- Motivation: defined as “a passion to work for reasons that go beyond money or status”;
- Empathy: recognizing and understanding other people’s emotions and treating people accordingly; and
- Social skill: proficiency in managing their relationships and building networks.
In his 1998 Harvard Business Review article, What Makes a Leader, Goleman summed up his earlier findings: “The most effective leaders are alike in one crucial way: They all have a high degree of...emotional intelligence. It’s not that IQ and technical skills are irrelevant. They do matter, but...they are the entry-level requirements for executive positions. Emotional intelligence is the sine qua non of leadership. Without it, a person can have the best training in the world, an incisive, analytical mind, and an endless supply of smart ideas, but he still won’t make a great leader.”
Justin Bariso, author of EQ Applied, agrees. “We’ve all seen teams full of ‘A-grade’ players who underachieve because they don’t work well together,” he says. “In contrast, those with high emotional intelligence can get the most out of those they work with – and help the team become more than the sum of its parts.”
Adam Grant is an organizational psychologist at Wharton. He holds a different view to Goleman and Bariso. Grant tested hundreds of salespeople for cognitive ability and EQ, tracking their sales revenue for months. He found that the average sales employee with high cognitive ability generated annual revenue exceeding $195,000 compared to $159,000 for moderate cognitive ability and $109,000 for low cognitive ability. After measuring cognitive ability, EQ “added nothing,” according to Grant.
Nevertheless, he doesn’t dismiss EQ outright. Grant believes it’s relevant to roles managing people’s emotions, such as in real estate. (It’s imperative for realtors to be able to read, understand and influence the emotions of potential buyers.)
Reimagining corporate leadership: Emotional intelligence and the future of work
Technology is accelerating at breakneck speed. But even with quantum leaps in artificial intelligence, machine learning and robotics, which automate logic-based activities such as managing investments, technology can’t easily replicate creativity, intuition, compassion and empathy.
According to McKinsey: “Accompanying the adoption of advanced technologies into the workplace will be an increase in the need for workers with finely tuned social and emotional skills – skills that machines are a long way from mastering. Between 2016 and 2030, demand for social and emotional skills will grow across all industries by 26% in the U.S. and by 22% in Europe.”
Ironically, the characteristics that make us human constitute the competitive edge that EQ-minded corporate leaders will have over their competitors in the future of work. This EQ advantage will be even more acute in the post-COVID era where work will assume more flexibility and the workforce will become more distributed.
“Emotions are the most powerful force inside a leader,” says Marc Brackett, director of the Yale Center for Emotional Intelligence and author of Permission to Feel. “They influence everything from leadership effectiveness to building and maintaining complex relationships, from innovation to board relations. With an emotionally intelligent leader, most challenges are manageable. But with an emotionally unintelligent leader, everything is a struggle. In today’s workplace, top employees will gravitate towards firms that acknowledge the power of emotion to foster positive, productive environments.”
So, the message to corporate leadership is clear: embrace your inner human.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.