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THE BUSINESS CASE FOR DEVELOPING EMOTIONAL INTELLIGENCE
The emotions that leaders, employees, and customers feel impact the bottom line of companies and the effectiveness of government and non-profit organizations. The emotions that leaders experience impact the climate and culture of an organization as a whole. More specifically, leaders' emotions impact:
- What employees feel
- How satisfied employees are with their work and the company
- How loyal they are and their willingness to give extra effort
- How productive and efficient they are.
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How employees feel and perform their work impact how customers feel, how satisfied they are with both products and services, and ultimately how loyal a customer is to the company or organization. And how loyal customers are has a direct impact on the bottom line and profitability of an organization.
Notice that the foundation element in this set of relationships is leadership. It does not say CEO or Executive Vice President or Director. It says leaders. The in-charge person in every work team, every manager, and every individual in the organization is a leader. Self-leadership is one of the most important factors we focus on in skill development. Self-leadership is the internal ability to lead yourself to make the best choices and decisions moment-to-moment throughout the day, whether at work or at home.
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Both positive and negative emotions impact everyone in organizations and the customers they serve. The figure below depicts the impact of negative emotions on all of the people and the bottom line.
Impact
If we ask ourselves a few questions surrounding these problems, we discover the significant impact they have on the organization:
- Which of these problems have you experienced in your organization?
- What is the impact on performance, business objectives, and key initiatives?
- What could your organization achieve if these problems were minimized?
Value of Developing Emotional Competence
Additional research supports the critical value of developing the Emotional Competence of leaders. Daniel Goleman, author of Emotional Intelligence, examined competency studies of 200 large global companies and reported the following results in the Nov./Dec., 1998 Harvard Business Review:
"When I calculated the ratio of technical skills, IQ, and emotional intelligence as ingredients of excellent performance, emotional intelligence proved to be twice as important as the others for jobs at all levels."
His conclusions about senior leaders were even more telling...
"When I compared star performers with average ones in senior leadership positions, nearly 90% of the difference in their profiles was attributable to emotional intelligence factors rather than cognitive abilities."
Impact on the Bottom Line
In several studies, Goleman shows a direct impact of the organization's leadership on its bottom line. In the same HBR article (see above), Goleman shares the following findings:
"David McClelland found that when senior managers had a critical mass of emotional intelligence capabilities, their divisions outperformed yearly earnings goals by 20%. Division leaders without that critical mass under performed by almost the same amount."
In the best-selling book Primal Leadership, Goleman, et. al. provide further evidence of the impact of emotional intelligence on the organization's profitability:
"A study 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."
"In a 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% of the cases, climate alone accurately sorted companies into high versus low profits and growth."
(Cited in Primal Leadership - research by David McClelland, "Identifying Competencies with Behavior-Event Interviews," Psychological Science 9, 1998 and David Williams, "Leadership for the 21st Century," Life Insurance Leadership Study, 1995.)
Our Programs
Our programs provide applied Emotional Intelligence skill-building techniques that enhance and
complement other values-based and principle-centered programs by providing practical "how-to's."
Emotional Intelligence skills are foundation skills enabling people to improve the "how" of
achieving results.
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