Good mood, good work, the case for emotionally intelligent leaders

I just finished reading “Primal Leadership: unleashing the power of emotional intelligence” by Daniel  Goleman, Richard Boyatzis and Annie McKee. I was pleasantly surprised how candid and realistic a portrait it paints of the pitfalls and failures of most leadership development programs to foster sustained change in individual behavior or organizational norms.  When I think about most of the leadership development programs I’ve had to go through, both at work and at Wharton, I know I struggled with 1) how the content was fluffy at best, 2) there was a lack of useful guidelines on how to actually develop leadership competencies and 3) the disconnect that the teachers/trainers for the most part did not embody leadership to me.

This book is different. The authors adopted a scientific and analytical approach providing real insight in a field that has mostly been made of fluff by presenting concrete actionable ideas and measurable competencies. Leadership boils down to having social emotional intelligence competencies that enable a person to ascertain and regulate their own emotions and help instill emotional calm and clarity in the people they interact with. Basically leaders who create resonance with the group can bring out the best in people and themselves by being authentic to their values and embodying their ideals. In contrast, people in authority who create dissonance, can drive “the group into a downward spiral from frustration to resentment, rancor to rage.” When people feel off-balance, they perform poorly.

Over the last couple decades, research has demonstrated that when people feel good, they work at their best. Positive emotions activate parts of the brain to be open, curious, collaborative, creative, more willing to take risks and be optimistic about their ability to achieve goals.  Feeling good also predisposes people to be altruistic, compassionate and empathetic towards others. A positive mood and work environment correlates to improved client service. In the book, it states, “for every 1 percent increase in the service climate, there’s a 2 percent increase in revenue.” (p.15)  “In a study of thirty-two stores in a U.S. retail chain, outlets with positive sales people showed the best sales results…In all of those retail outlets, it was the store manager who created the emotional climate that drove salespeople’s moods–and ultimately, sales–in the right direction. When the managers themselves were peppy, confident, and optimistic, their moods rubbed off on the staff.” (p. 16)

The book cites a number of studies that find that company performance is related to the EQ of the top team. A study of 62 CEOs and their top management teams found “that the more positive the overall moods of people in the top management team, the more cooperatively they worked together–and the better the company’s business results. Put differently, the longer a company was run by a management team that did not get along, the poorer that company’s market return.” (p. 15) It concludes: ” The ‘group IQ,’ then–the sum total of every person’s best talents contributed at full force–depends on the group’s emotional intelligence, as shown in its harmony.” Leaders are critical in creating “a friendly but effective climate that lifts everyone’s spirits.”

In another study of nineteen insurance companies, “the climate created by the CEOs among their direct reports predicted the business performance of the entire organization: in 75 percent of cases, climate alone accurately sorted companies into high versus low profits and growth.” (p.17)

The authors write that their analyses suggest that “overall, the climate–how people feel about working at a company–can account for 20 to 30 percent of business performance. Getting the best out of people pays off in hard results… Roughly 50 to 70 percent of how employees perceive their organization’s climate can be traced to the actions of one person: the leader.” (pp.17-18)

IQvsEQ

They also present the analysis of the partners’ contributions to the profits of a large accounting firm: “If the partner had significant strengths in the self-management competencies, he or she added 78 percent more incremental profit that did partners without those strengths. Likewise, the added profits for partners with strengths in social skills were 110 percent greater, and those with strengths in [both social skills and self-management] added a whopping 390 percent incremental profit–in this case $1,465,000 more per year.  By contrast, significant strengths in analytic reasoning abilities added just 50 percent more profit.  Thus, purely cognitive abilities help–but the EI competencies help far more.” (p. 251)

Written by duecalmclarity

Due Quach (pronounced “Zway Kwok”) is the founder of Calm Clarity, a social enterprise that uses science to help people across the socioeconomic spectrum master their minds and be their best self. Calm Clarity creates social impact by using revenues from corporate training services to deliver the same high quality training to disadvantaged groups such as low-income first-generation college students and inner city teenagers. A refugee from Vietnam and graduate of Harvard College and the Wharton MBA Program, Due overcame the long-term effects of poverty and trauma by turning to neuroscience and meditation. After building a successful career in management consulting and private equity investments, she created Calm Clarity to help more people overcome adversity and unlock their potential.

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