Heart smart management: Emotional intelligence in the corporate world

Emotional intelligence (EI) is a measure of how well individuals can manage their own moods, and how well they can read the moods of others. Though some critics question the scientific validity of EI, real-world results have been promising. According to multiple studies, companies that emphasize EI have reported increased productivity, higher sales, happier employees and lower staff turnover.

When Jack Welch was turning General Electric into a global powerhouse, his top managers were expected, above all, to deliver results. Those that didn't weren't destined for longevity. But while Welch's high standards weren't necessarily unique — CEOs have long demanded performance from their top managers — his methods certainly were.

Because even though Welch sought profits, he also instructed managers to treat their staff with respect — and not necessarily because he cared a great deal about manners. "Companies can say to their managers, 'I want you to deliver results,' and managers will follow, particularly when they are incentivized to do so," says Angelo Kinicki, a professor of management at the W. P. Carey School of Business.

"But managers can either deliver those results by beating on people, or they can do it by effectively using interpersonal skills and positive motivational techniques. There are organizations that prefer option 1, and there are others that prefer option 2. But when Welch was at GE, he said, 'We want results, and we also want a culture that treats people well.' And treating people well is where the idea of "emotional intelligence" comes in."

Emotional intelligence — the extent to which individuals are self-aware, capable of managing their moods, and attuned to the feelings of others — isn't necessarily a new idea. Psychologists have long proposed that humans have multiple intelligences, emotional intelligence (EI) among them. Only in the past decade, however, have businesses become seriously interested in how EI can help them operate better.

American Express and Roadway are among the companies that have put EI to work, and though some critics question the scientific validity of EI, real-world results have been promising. According to multiple studies, companies that emphasize EI have reported increased productivity, higher sales, happier employees and lower staff turnover.

Executives and high-level managers who undergo EI training or have naturally high EI skills are more successful, influential and likable. EI has even been shown to keep careers on track. "I can give you study after study where performance has increased, where employees report managing their moods more effectively, where they report being more persistent," says Mary Gendron, a W. P. Carey clinical professor of management and an expert in EI.

"They can hang in there through frustrating periods and develop effective ways to let off steam." "EI has been correlated with a number of positive outcomes such as job satisfaction and performance," Kinicki says. "There is evidence that EI is related to outcomes valued by organizations."

EI in the workplace

Psychologists have been discussing the ideas behind EI since the 1960s. It wasn't until Daniel Goleman's 1995 book, "Emotional Intelligence," however, that EI was popularized as a single, easily digestible idea. The book resonated with a broad audience and kicked off a flurry of research about EI, which, Gendron says, has two principle facets: Being aware of one's own feelings, and being aware of the feelings of others.

"The main components of EI are self-awareness, relationship management, social awareness and self-management," explains Gendron, who now teaches a class in EI in the W. P. Carey MBA Program. "It's also about being attuned to what's going on with other people, and being cued in to people around you. So it's both about being self-aware and being aware of others."

Not only did Goleman's take on EI land his book on the bestseller list, it also caught the attention of business leaders, who quickly saw possible applications for EI in the corporate world. In the decade since, companies of all kinds have launched EI initiatives — some well designed, some not — to help employees become more effective workers and executives become more compassionate, empathetic leaders.

EI, it seems, is applicable just about anywhere in the office. "Virtually every job in this day and age has a social component," says Blake Ashforth, a W. P. Carey professor of management.

"Whether it's working with customers or with fellow team members, that requires a certain amount of EI. Leadership and sales are the obvious applications, but just about anything these days is interpersonally based." EI is of particular interest in the field of leadership. Studies have linked EI competence to high on-the-job performance — and poor EI to failure.

Indeed, recent research from the Center for Creative Leadership has found that low EI skills are a primary cause of career derailment among executives. "I think the broadest way to use EI is to look at it as an important component of a person's interpersonal skills, because those skills will affect an individual s career development," Kinicki says.

"On the leadership level, some would argue that EI is even more important, because leaders must be able to influence groups of people, and those people will observe a leader's interpersonal skills. Those EI skills will ultimately affect job satisfaction and any number of other things. Organizations are trying to inform their leaders about these traits." Gendron contends that EI is "one of the core competencies of leadership."

"How can you possibly influence people without awareness of yourself, others and your environment?" she says. "If you can cue into others' signals, you can adjust your style as you read emotions. If you can manage your own moods, you'll be more consistent and more predictable, and so you'll have greater integrity. People will know they can count on you."

Countering critics

EI is not without its critics. Some express concern about the lack of a universally accepted means of measuring EI — "That is a stumbling block," Kinicki says — and, possibly because EI has received so much attention in the mainstream press, it has earned a less-than-desirable reputation as a "fad." It has a certain faddish quality, which is a bad thing," Ashforth says.

"It is well known, but poorly understood, and so it's been applied inappropriately, which leads to disillusionment. But there is value to it if it's done right." Certainly, proponents of EI can counter criticisms with hard data that indicates EI does make a difference — in dollars and cents. Numerous studies have now shown that an emphasis on EI can deliver bottom-line returns. Among them:

• When the U.S. Air Force began selecting recruiters based specifically on their EI skills, it reported that recruiting successes increased threefold. In total, the Air Force EI initiative produced annual savings of $3 million and it was later recommended that all branches of the military launch similar initiatives.
• Financial advisors at American Express who were trained in EI proved their worth in a study that compared them to other advisors who did not receive the training. After the training was completed, the advisors in the EI group grew their businesses by 18.1 percent. The untrained group saw growth of 16.2 percent.
• Egon Zehnder, an executive search firm, analyzed the successes or failures of executives with varying leadership skills. Wile some of the executives scored highest in cognitive ability or relevant previous experience, others boasted high EI competence. The results? Executives who were strongest in EI were successful 74 percent of the time, leading Egon Zehnder to conclude EI was a better predictor of executive success than either previous experience or IQ.

"People studying leadership agree: Social judgment is important, ergo EI is important," Kinicki says. "There is evidence that when leaders have it, people around them perform better." Maybe more importantly, Gendron says, there is also evidence that those of us lacking in EI can change for the better.

"But like any change," Gendron notes, "it takes commitment and practice to develop these skills. I'm very optimistic that people can change. People are born with certain personality patterns, of course, but our environment and families are powerful forces in our lives. The more you're exposed to good EI role models and observe how they handle challenging situations, the more you'll have an edge."

EI, says Gendron, has helped her become more reflective and flexible, carry on through tough times and overcome life challenges. She's convinced it can do the same for others. "I've improved management of my moods," she says.

"I realized that time spent being anxious or feeling like a victim is just wasted time, that it's never been a pattern of behavior that's gotten me anywhere. I've found that [EI] has helped me be more optimistic, resilient and focused, and it's really helped me put my energy where there are results to be had. When I teach, I tell stories quite openly about where I've been and how I've applied EI to my own life. I've made major changes, and that's why I'm so excited about it."

For proof, Gendron could cite any number of examples, ranging from successful EI experiments conducted in American executive suites to the progress she's seen among students in her MBA EI class. Gendron s former students tell her that the course has made a significant impact on their development as leaders.

They say the skills that they developed during the course have enabled them to improve personal and team management. According to Gendron, one student credits his newly developed emotional intelligence with helping to advance his career; "His manager gave him a very favorable performance review, specifically mentioning the new image of confidence, maturity and balance that he projects."

Bottom line:

• Emotional intelligence is a measure of how well individuals can manage their own moods, and how well they can read the moods of others.
• The ideas that underpin EI gained popular attention in 1995 with the publication of Daniel Goleman's "Emotional Intelligence." The book spurred a flurry of academic research and led many companies to launch EI initiatives.
• Though some question the scientific basis for EI, proponents say EI has produced real-world results — and they have the studies to prove it.
• Successful EI initiatives have been linked to greater productivity increased sales, employee happiness and customer satisfaction. Strong EI skills have also been shown to be a prime factor in effective leadership.