16 April 2006

HBR- What Makes a Leader?

What Makes a Leader?
by Daniel Goleman


Abstract:
When asked to define the ideal leader, many would emphasize traits such as intelligence, toughness, determination, and vision--the qualities traditionally associated with leadership. Often left off the list are softer, more personal qualities--but they are also essential. Although a certain degree of analytical and technical skill is a minimum requirement for success, studies indicate that emotional intelligence may be the key attribute that distinguishes outstanding performers from those who are merely adequate. Psychologist and author Daniel Goleman first brought the term "emotional intelligence" to a wide audience with his 1995 book of the same name, and Goleman first applied the concept to business with this 1998 classic HBR article. In his research at nearly 200 large, global companies, Goleman found that truly effective leaders are distinguished by a high degree of emotional intelligence. Without it, a person can have first-class training, an incisive mind, and an endless supply of good ideas, but he or she still won't be a great leader. The chief components of emotional intelligence--self-awareness, self-regulation, motivation, empathy, and social skill--can sound unbusinesslike, but Goleman, cochair of the Consortium for Research on Emotional Intelligence in Organizations, based at Rutgers University, found direct ties between emotional intelligence and measurable business results.

What Makes a Leader?
by Daniel Goleman


What distinguishes the outstanding leader from the merely adequate?

Emotional intelligence— a powerful combination of self-management skill and the ability to work with others.

The Idea in Brief
Asked to define the ideal leader, many would emphasize traits such as intelligence, toughness, determination, and vision. Often left off the list are softer, more personal quali¬ties—but recent studies indicate that they are also essential. Although a certain degree of analytical and technical skill is a minimum requirement for success, what is called "emotional intelligence" may be the key attribute that distinguishes outstanding per¬formers from those who are merely adequate. For example, in a 1996 study of a global food and beverage company, where senior managers had a certain critical mass of emotional intelli¬gence, their divisions outperformed yearly earnings goals by 20%. Division leaders without that critical mass underperformed by almost the same amount.

The Idea at Work
There are five components to emotional intelligence: self-awareness, self-regulation, motivation, empathy, and social skill. All five traits sound desirable to just about everyone. But organizations too often implicitly discour¬age their people from developing them.

Self-management skills
1. Self-awareness. Emotional intelligence begins with this trait. People with a high degree of self-awareness know their weak¬nesses and aren't afraid to talk about them. Someone who understands that he works poorly under tight deadlines, for example, will work hard to plan his time carefully, and will let his colleagues know why. Many executives looking for potential leaders mistake such candor for "wimpiness."
2. Self-regulation. This attribute flows from self-awareness, but runs in a different direc¬tion. People with this trait are able to con¬trol their impulses or even channel them for good purposes.
3. Motivation. A passion for achievement for its own sake—not simply the ability to respond to whatever incentives a company offers—is the kind of motivation that is essential for leadership.

The ability to relate to others
4. Empathy. In addition to self-management skills, emotional intelligence requires a facility for dealing with others. And that starts with empathy—taking into account the feelings of others when making deci¬sions—as opposed to taking on everyone's troubles.
EXAMPLE:
Consider two division chiefs at a company forced to make layoffs. One manager gave a hard¬hitting speech emphasizing the number of people who would be fired.The other manager, while not hiding the bad news, took into account his people's anxieties. He promised to keep them informed and to treat everyone fairly. Many exec¬utives would have refrained from such a show of consideration, lest they appear to lack tough¬ness. But the tough manager demoralized his talented people—most of whom ended up leaving his division voluntarily.
5. Social skill. All the preceding traits culmi¬nate in this fifth one: the ability to build rapport with others, to get them to cooper¬ate, to move them in a direction you desire. Managers who simply try to be sociable— while lacking the other components of emotional intelligence—are likely to fail. Social skill, by contrast, is friendliness with a purpose.

Can you boost your emotional intelligence?
Absolutely—but not with traditional training programs that target the rational part of the brain. Extended practice, feedback from col¬leagues, and your own enthusiasm for making the change are essential to becoming an effective leader.

IQ and technical skills are important, but emotional intelligence is the sine qua non of leadership.

What Makes a Leader?

by Daniel Goleman
Daniel Goleman is the author of Emotional Intelligence (Ban¬tam, 1995) and Working with Emotional Intelligence (Bantam, 1998). He is cochairman of the Consortium for Research on Emotional Intelligence in Organizations, which is based at Rut¬gers University's Graduate School of Applied and Professional Psychology in Piscataway, New Jersey. He can be reached at Goleman@j avanet. com.

EVERY BUSINESS PERSON knows a story about a highly intelligent, highly skilled executive who was promoted into a leader¬ship position only to fail at the job. And they also know a story about someone with solid-but not extraordinary - intellectual abilities and technical skills who was promoted into a similar position and then soared.

Such anecdotes support the widespread belief that identifying individuals with the "right stuff" to be leaders is more art than science. After all, the personal styles of superb leaders vary: some lead¬ers are subdued and analytical; others shout their manifestos from the mountaintops. And just as important, different situations call for different types of leadership. Most mergers need a sensitive negotiator at the helm, whereas many turnarounds require a more forceful authority.

I have found, however, that the most effective leaders are alike in one crucial way: they all have a high degree of what has come to be known as emo¬tional intelligence. It's not that IQ and technical skills are irrelevant. They do matter, but mainly as "threshold capabilities"; that is, they are the entry-level requirements for executive positions. But my research, along with other recent studies, clearly shows that emotional intelligence is the sine qua non of leadership. Without it, a person can have the best training in the world, an incisive, analyti¬cal mind, and an endless supply of smart ideas, but he still won't make a great leader.

Effective leaders are alike in one crucial way: they all have a high degree of emotional intelligence.

In the course of the past year, my colleagues and I have focused on how emotional intelligence operates at work. We have exam¬ined the relationship between emotional intelligence and effec¬tive performance, especially in leaders. And we have observed how emotional intelligence shows itself on the job. How can you tell if someone has high emotional intelligence, for exam¬ple, and how can you recognize it in yourself? In the following pages, we'll explore these questions, taking each of the components of emotional intelligence - self-awareness, self-regulation, motivation, empathy, and social skill - in turn.

Evaluating Emotional Intelligence

Most large companies today have employed trained psychologists to develop what are known as "com¬petency models" to aid them in identifying, train¬ing, and promoting likely stars in the leadership firmament. The psychologists have also developed such models for lower-level positions. And in re¬cent years, I have analyzed competency models from 188 companies, most of which were large and global and included the likes of Lucent Technolo¬gies, British Airways, and Credit Suisse.

In carrying out this work, my objective was to determine which personal capabilities drove out¬standing performance within these organizations, and to what degree they did so. I grouped capabili¬ties into three categories: purely technical skills like accounting and business planning; cognitive abilities like analytical reasoning; and competen¬cies demonstrating emotional intelligence such as the ability to work with others and effectiveness in leading change.

To create some of the competency models, psy¬chologists asked senior managers at the companies to identify the capabilities that typified the organi¬zation's most outstanding leaders. To create other models, the psychologists used objective criteria such as a division's profitability to differentiate the star performers at senior levels within their organi¬zations from the average ones. Those individuals were then extensively interviewed and tested, and their capabilities were compared. This process re¬sulted in the creation of lists of ingredients for highly effective leaders. The lists ranged in length from 7 to 15 items and included such ingredients as initiative and strategic vision.

When I analyzed all this data, I found dramatic results. To be sure, intellect was a driver of out¬standing performance. Cognitive skills such as big-picture think¬ing and long-term vision were particularly important. But when I calculated the ratio of technical skills, IQ, and emotional intelli¬gence as ingredients of excellent performance, emotional intelli¬gence proved to be twice as important as the others for jobs at all levels.

Moreover, my analysis showed that emotional intelligence played an increasingly important role at the highest levels of the company, where differ¬ences in technical skills are of negligible impor¬tance. In other words, the higher the rank of a per¬son considered to be a star performer, the more emotional intelligence capabilities showed up as the reason for his or her effectiveness. When I com¬pared star performers with average ones in senior leadership positions, nearly 90% of the difference in their profiles was attributable to emotional intel¬ligence factors rather than cognitive abilities.

Other researchers have confirmed that emotional intelligence not only distinguishes outstanding leaders but can also be linked to strong perfor¬mance. The findings of the late David McClelland, the renowned researcher in human and organiza¬tional behavior, are a good example. In a 1996 study of a global food and beverage company, McClelland found that when senior managers had a critical mass of emotional intelligence capabilities, their divisions outperformed yearly earnings goals by 20%. Meanwhile, division leaders without that critical mass underperformed by almost the same amount. McClelland's findings, interestingly, held as true in the company's U.S. divisions as in its divi¬sions in Asia and Europe.

In short, the numbers are beginning to tell us a persuasive story about the link between a compa¬ny's success and the emotional intelligence of its leaders. And just as important, research is also demonstrating that people can, if they take the right approach, develop their emotional intelligence. (See the insert "Can Emotional Intelligence Be Learned?")

Self-Awareness
Self-awareness is the first component of emotional intelligence - which makes sense when one con¬siders that the Delphic oracle gave the advice to "know thyself" thousands of years ago. Self-aware¬ness means having a deep understanding of one's emotions, strengths, weaknesses, needs, and drives. People with strong self-awareness are neither overly critical nor unrealistically hopeful. Rather, they are honest-with themselves and with others.

People who have a high degree of self-awareness recognize how their feelings affect them, other peo¬ple, and their job performance. Thus a self-aware person who knows that tight deadlines bring out the worst in him plans his time carefully and gets his work done well in advance. Another person with high self-awareness will be able to work with a demanding client. She will understand the client's impact on her moods and the deeper rea¬sons for her frustration. "Their trivial demands take us away from the real work that needs to be done," she might explain. And she will go one step further and turn her anger into something constructive.

Self-aware job candidates will be frank in admitting to failure-and will often tell their tales with a smile.

Self-awareness extends to a person's understanding of his or her values and goals. Someone who is highly self-aware knows where he is headed and why; so, for example, he will be able to be firm in turning down a job offer that is tempting financially but does not fit with his principles or long-term goals. A person who lacks self-awareness is apt to make decisions that bring on in¬ner turmoil by treading on buried values. "The money looked good so I signed on," someone might say two years into a job, "but the work means so lit¬tle to me that I'm constantly bored." The decisions of self-aware people mesh with their values; conse¬quently, they often find work to be energizing.

How can one recognize self-awareness? First and foremost, it shows itself as candor and an ability to assess oneself realistically. People with high self-awareness are able to speak accurately and openly -although not necessarily effusively or confession-ally-about their emotions and the impact they have on their work. For instance, one manager I know of was skeptical about a new personal-shopper service that her company, a major department-store chain, was about to introduce. Without prompting from her team or her boss, she offered them an ex¬planation: "It's hard for me to get behind the rollout of this service," she admitted, "because I really wanted to run the project, but I wasn't selected. Bear with me while I deal with that." The manager did indeed examine her feelings; a week later, she was supporting the project fully.

Such self-knowledge often shows itself in the hiring process. Ask a candidate to describe a time he got carried away by his feelings and did some¬thing he later regretted. Self-aware candidates will be frank in admitting to failure-and will often tell their tales with a smile. One of the hallmarks of self-awareness is a self-deprecating sense of humor. Self-awareness can also be identified during per¬formance reviews. Self-aware people know-and are comfortable talking about-their limitations and strengths, and they often demonstrate a thirst for constructive criticism. By contrast, people with low self-awareness interpret the message that they need to improve as a threat or a sign of failure.

Self-aware people can also be recognized by their self-confi¬dence. They have a firm grasp of their capabilities and are less likely to set themselves up to fail by, for example, overstretching on assignments. They know, too, when to ask for help. And the risks they take on the job are cal¬culated. They won't ask for a challenge that they know they can't handle alone. They'll play to their strengths.

Consider the actions of a mid-level employee who was invited to sit in on a strategy meeting with her company's top execu¬tives. Although she was the most junior person in the room, she did not sit there quietly, listening in awestruck or fearful silence. She knew she had a head for clear logic and the skill to present ideas persuasively, and she offered cogent suggestions about the company's strategy. At the same time, her self-awareness stopped her from wandering into territory where she knew she was weak.

Despite the value of having self-aware people in the workplace, my research indicates that senior executives don't often give self-awareness the credit it deserves when they look for potential leaders. Many executives mistake candor about feelings for "wimpiness" and fail to give due respect to employ¬ees who openly acknowledge their shortcomings. Such people are too readily dismissed as "not tough enough" to lead others.

In fact, the opposite is true. In the first place, peo¬ple generally admire and respect candor. Further, leaders are constantly required to make judgment calls that require a candid assessment of capa¬bilities-their own and those of others. Do we have the management expertise to acquire a competitor?
Can we launch a new product within six months? People who assess themselves honestly - that is, self-aware people-are well suited to do the same for the organizations they run.

Can Emotional Intelligence Be Learned?
For ages, people have debated if leaders are born or made. So too goes the debate about emotional intel¬ligence. Are people born with certain levels of em¬pathy, for example, or do they acquire empathy as a result of life's experiences? The answer is both. Scien¬tific inquiry strongly suggests that there is a genetic component to emotional intelligence. Psychological and developmental research indicates that nurture plays a role as well. How much of each perhaps will never be known, but research and practice clearly demonstrate that emotional intelligence can be learned.

One thing is certain: emotional intelligence in¬creases with age. There is an old-fashioned word for the phenomenon: maturity. Yet even with maturity, some people still need training to enhance their emo¬tional intelligence. Unfortunately, far too many train¬ing programs that intend to build leadership skills-including emotional intelligence-are a waste of time and money. The problem is simple: they focus on the wrong part of the brain.

Emotional intelligence is born largely in the neuro-transmitters of the brain's limbic system, which gov¬erns feelings, impulses, and drives. Research indi¬cates that the limbic system learns best through motivation, extended practice, and feedback. Com¬pare this with the kind of learning that goes on in the neocortex, which governs analytical and technical ability. The neocortex grasps concepts and logic. It is the part of the brain that figures out how to use a com¬puter or make a sales call by reading a book. Not sur¬prisingly - but mistakenly-it is also the part of the brain targeted by most training programs aimed at en¬hancing emotional intelligence. When such programs take, in effect, a neocortical approach, my research with the Consortium for Research on Emotional In¬telligence in Organizations has shown they can even have a negative impact on people's job performance.

To enhance emotional intelligence, organizations must refocus their training to include the limbic sys¬tem. They must help people break old behavioral habits and establish new ones. That not only takes much more time than conventional training pro¬grams, it also requires an individualized approach.

Imagine an executive who is thought to be low on empathy by her colleagues. Part of that deficit shows itself as an inability to listen; she interrupts people and doesn't pay close attention to what they're say¬ing. To fix the problem, the executive needs to be mo¬tivated to change, and then she needs practice and feedback from others in the company. A colleague or coach could be tapped to let the executive know when she has been observed failing to listen. She would then have to replay the incident and give a better re¬sponse; that is, demonstrate her ability to absorb what others are saying. And the executive could be directed to observe certain executives who listen well and to mimic their behavior.

With persistence and practice, such a process can lead to lasting results. I know one Wall Street execu¬tive who sought to improve his empathy - specifically his ability to read people's reactions and see their per¬spectives. Before beginning his quest, the executive's subordinates were terrified of working with him. Peo¬ple even went so far as to hide bad news from him. Naturally, he was shocked when finally confronted with these facts. He went home and told his family-but they only confirmed what he had heard at work. When their opinions on any given subject did not mesh with his, they, too, were frightened of him.

Enlisting the help of a coach, the executive went to work to heighten his empathy through practice and feedback. His first step was to take a vacation to a for¬eign country where he did not speak the language. While there, he monitored his reactions to the unfa¬miliar and his openness to people who were different from him. When he returned home, humbled by his week abroad, the executive asked his coach to shadow him for parts of the day, several times a week, in order to critique how he treated people with new or differ¬ent perspectives. At the same time, he consciously used on-the-job interactions as opportunities to prac¬tice "hearing" ideas that differed from his. Finally, the executive had himself videotaped in meetings and asked those who worked for and with him to critique his ability to acknowledge and understand the feel¬ings of others. It took several months, but the execu¬tive's emotional intelligence did ultimately rise, and the improvement was reflected in his overall perfor¬mance on the job.

It's important to emphasize that building one's emotional intelligence cannot-will not-happen without sincere desire and concerted effort. A brief seminar won't help; nor can one buy a how-to manual. It is much harder to learn to empathize-to internal¬ize empathy as a natural response to people-than it is to become adept at regression analysis. But it can be done. "Nothing great was ever achieved without en¬thusiasm," wrote Ralph Waldo Emerson. If your goal is to become a real leader, these words can serve as a guidepost in your efforts to develop high emotional intelligence.

Self-Regulation

People who have mastered their emotions are able to roll with the changes. They don't panic.

Biological impulses drive our emotions. We cannot do away with them - but we can do much to man¬age them. Self-regulation, which is like an ongoing inner conversation, is the component of emotional intelligence that frees us from being prisoners of our feelings. People engaged in such a conversation feel bad moods and emotional impulses just as everyone else does, but they find ways to control them and even to channel them in useful ways.

Imagine an executive who has just watched a team of his em¬ployees present a botched analy¬sis to the company's board of directors. In the gloom that fol¬lows, the executive might find himself tempted to pound on the table in anger or kick over a chair. He could leap up and scream at the group. Or he might maintain a grim silence, glaring at every¬one before stalking off.

But if he had a gift for self-regu¬lation, he would choose a differ¬ent approach. He would pick his words carefully, acknowledging the team's poor performance without rushing to any hasty judgment. He would then step back to consider the reasons for the fail¬ure. Are they personal-a lack of effort? Are there any mitigating factors? What was his role in the de¬bacle? After considering these questions, he would call the team together, lay out the incident's conse¬quences, and offer his feelings about it. He would then present his analysis of the problem and a well-considered solution.

Why does self-regulation matter so much for leaders? First of all, people who are in control of their feelings and impulses - that is, people who are reasonable-are able to create an environment of trust and fairness. In such an environment, politics and infighting are sharply reduced and productivity is high. Talented people flock to the organization and aren't tempted to leave. And self-regulation has a trickle-down effect. No one wants to be known as a hothead when the boss is known for her calm ap¬proach. Fewer bad moods at the top mean fewer throughout the organization.

Second, self-regulation is important for competi¬tive reasons. Everyone knows that business today is rife with ambiguity and change. Companies merge and break apart regularly. Technology transforms work at a dizzying pace. People who have mastered their emotions are able to roll with the changes. When a new change program is announced, they don't panic; instead, they are able to suspend judg¬ment, seek out information, and listen to execu¬tives explain the new program. As the initiative moves forward, they are able to move with it.
Sometimes they even lead the way. Consider the case of a manager at a large manufacturing com¬pany. Like her colleagues, she had used a certain software program for five years. The program drove how she col¬lected and reported data and how she thought about the company's strategy. One day, senior execu¬tives announced that a new pro¬gram was to be installed that would radically change how in¬formation was gathered and as¬sessed within the organization. While many people in the com¬pany complained bitterly about how disruptive the change would be, the manager mulled over the reasons for the new program and was convinced of its potential to improve performance. She eagerly attended training sessions - some of her colleagues refused to do so-and was eventually promoted to run several divisions, in part because she used the new technology so effectively.

I want to push the importance of self-regulation to leadership even further and make the case that it enhances integrity, which is not only a personal virtue but also an organizational strength. Many of the bad things that happen in companies are a func¬tion of impulsive behavior. People rarely plan to ex¬aggerate profits, pad expense accounts, dip into the till, or abuse power for selfish ends. Instead, an op¬portunity presents itself, and people with low im¬pulse control just say yes.

By contrast, consider the behavior of the senior executive at a large food company. The executive was scrupulously honest in his negotiations with local distributors. He would routinely lay out his cost structure in detail, thereby giving the distribu¬tors a realistic understanding of the company's pric¬ing. This approach meant the executive couldn't al¬ways drive a hard bargain. Now, on occasion, he felt the urge to increase profits by withholding information about the company's costs. But he challenged that impulse-he saw that it made more sense in the long run to counteract it. His emotional self-regulation paid off in strong, lasting relationships with distributors that benefited the company more than any short-term financial gains would have.

The signs of emotional self-regulation, therefore, are not hard to miss: a propensity for reflection and thought-fulness; comfort with ambiguity and change; and integrity-an ability to say no to impulsive urges.

Like self-awareness, self-regulation often does not get its due. People who can master their emotions are some¬times seen as cold fish-their consid¬ered responses are taken as a lack of passion. People with fiery tempera¬ments are frequently thought of as "classic" leaders - their outbursts are considered hallmarks of charisma and power. But when such people make it to the top, their impulsiveness often works against them. In my research, extreme displays of negative emotion have never emerged as a driver of good leadership.

Motivation

If there is one trait that virtually all ef¬fective leaders have, it is motivation. They are driven to achieve beyond ex¬pectations-their own and everyone else's. The key word here is achieve. Plenty of people are motivated by exter¬nal factors such as a big salary or the status that comes from having an im¬pressive title or being part of a presti¬gious company. By contrast, those with leadership potential are motivated by a deeply embedded desire to achieve for the achievement.

If you are looking for leaders, how can yotify people who are motivated by the dachieve rather than by external rewards? Tsign is a passion for the work itself-suchseek out creative challenges, love to leartake great pride in a job well done. They aplay an unflagging energy to do things bettple with such energy often seem restless wstatus quo. They are persistent with theitions about why things are done one waythan another; they are eager to explore nproaches to their work.

A cosmetics company manager, for example, was frustrated that he had to wait two weeks to get sales results from people in the field. He finally tracked down an automated phone system that would beep each of his salespeople at 5 P.M. every day. An automated message then prompted them to punch in their numbers-how many calls and sales they had made that day. The system short¬ened the feedback time on sales results from weeks to hours.

That story illustrates two other common traits of people who are driven to achieve. They are forever raising the performance bar, and they like to keep score. Take the performance bar first. During per¬formance reviews, people with high levels of motiva¬tion might ask to be "stretched" by their superiors. Of course, an employee who combines self-aware¬ness with internal motivation will recognize her limits-but she won't settle for objectives that seem too easy to fulfill.

And it follows naturally that people who are driven to do better also want a way of tracking progress - their own, their team's, and their com¬pany's. Whereas people with low achievement mo¬tivation are often fuzzy about results, those with high achievement motivation often keep score by tracking such hard measures as profitability or mar¬ket share. I know of a money manager who starts and ends his day on the Internet, gauging the perfor¬mance of his stock fund against four industry-set benchmarks.

Interestingly, people with high motivation re¬main optimistic even when the score is against them. In such cases, self-regulation combines with achievement motivation to overcome the frustration and depression that come after a set¬back or failure. Take the case of an another portfo¬lio manager at a large invest¬ ment company. After several successful years, her fund tum¬bled for three consecutive quar¬ters, leading three large insti¬tutional clients to shift their business elsewhere.

Some executives would have blamed the nosedive on cir¬cumstances outside their con¬trol; others might have seen the setback as evidence of personal failure. This portfolio manager, however, saw an opportunity to prove she could lead a turn¬around. Two years later, when she was promoted to a very senior level in the com¬pany, she described the experience as "the best thing that ever happened to me; I learned so much from it."

Executives trying to recognize high levels of achievement motivation in their people can look for one last piece of evidence: commitment to the organization. When people love their job for the work itself, they often feel committed to the orga¬nizations that make that work possible. Commit¬ted employees are likely to stay with an organiza¬tion even when they are pursued by headhunters waving money.

It's not difficult to understand how and why a motivation to achieve translates into strong leader¬ship. If you set the performance bar high for your¬self, you will do the same for the organization when you are in a position to do so. Likewise, a drive to surpass goals and an interest in keeping score can be contagious. Leaders with these traits can often build a team of managers around them with the same traits. And of course, optimism and organizational commitment are fundamental to leader¬ship-just try to imagine running a company with¬out them.

Empathy

The very word empathy seems unbusinesslike, out of place amid the tough realities of the marketplace.

Of all the dimensions of emotional intelligence, empathy is the most easily recognized. We have all felt the empathy of a sensitive teacher or friend; we have all been struck by its absence in an unfeeling coach or boss. But when it comes to business, we rarely hear people praised, let alone rewarded, for their empathy. The very word seems unbusi¬nesslike, out of place amid the tough realities of the marketplace.

But empathy doesn't mean a kind of "I'm okay, you're okay" mushiness. For a leader, that is, it doesn't mean adopting other people's emotions as one's own and trying to please everybody. That would be a nightmare-it would make action impossi¬ble. Rather, empathy means thoughtfully considering em¬ployees' feelings-along with other factors - in the process of making intelligent decisions. For an example of empathy in action, consider what hap¬pened when two giant broker¬age companies merged, creat¬ing redundant jobs in all their divisions. One division man¬ager called his people together and gave a gloomy speech that emphasized the number of people who would soon be fired. The manager of another divi¬sion gave his people a different kind of speech. He was upfront about his own worry and confusion, and he promised to keep people informed and to treat everyone fairly.

The difference between these two managers was empathy. The first manager was too worried about his own fate to consider the feelings of his anxiety-stricken colleagues. The second knew intuitively what his people were feeling, and he acknowledged their fears with his words. Is it any surprise that the first manager saw his division sink as many demor¬alized people, especially the most talented, departed? By contrast, the second manager continued to be a strong leader, his best people stayed, and his divi¬sion remained as productive as ever.

Empathy is particularly important today as a component of leadership for at least three reasons: the increasing use of teams; the rapid pace of global¬ization; and the growing need to retain talent.

Consider the challenge of leading a team. As any¬one who has ever been a part of one can attest, teams are cauldrons of bubbling emotions. They are often charged with reaching a consensus-hard enough with two people and much more difficult as the numbers increase. Even in groups with as few as four or five members, alliances form and clash¬ing agendas get set. A team's leader must be able to sense and understand the viewpoints of everyone around the table.

That's exactly what a marketing manager at a large information technology company was able to do when she was appointed to lead a troubled team. The group was in turmoil, overloaded by work and missing deadlines. Tensions were high among the members. Tinkering with procedures was not enough to bring the group together and make it an effective part of the company.

So the manager took several steps. In a series of one-on-one sessions, she took the time to lis¬ten to everyone in the group-what was frustrating them, how they rated their colleagues, whether they felt they had been ignored. And then she directed the team in a way that brought it together: she encouraged people to speak more openly about their frustrations, and she helped peo¬ple raise constructive complaints during meetings. In short, her empathy allowed her to under¬stand her team's emotional makeup. The result was not just heightened collaboration among members but also added business, as the team was called on for help by a wider range of internal clients.

Globalization is another reason for the rising im¬portance of empathy for business leaders. Cross-cultural dialogue can easily lead to miscues and misunderstandings. Empathy is an antidote. Peo¬ple who have it are attuned to subtleties in body language; they can hear the message beneath the words being spoken. Beyond that, they have a deep understanding of the existence and importance of cultural and ethnic differences.

Consider the case of an American consultant whose team had just pitched a project to a potential Japanese client. In its dealings with Americans, the team was accustomed to being bombarded with questions after such a proposal, but this time it was greeted with a long silence. Other members of the team, taking the silence as disapproval, were ready to pack and leave. The lead consultant gestured them to stop. Although he was not particularly familiar with Japanese culture, he read the client's face and posture and sensed not rejection but inter¬est-even deep consideration. He was right: when the client finally spoke, it was to give the consult¬ing firm the job.

Finally, empathy plays a key role in the retention of talent, particularly in today's information econ¬omy. Leaders have always needed empathy to de¬velop and keep good people, but today the stakes are higher. When good people leave, they take the company's knowledge with them.

That's where coaching and mentoring come in. It has repeatedly been shown that coaching and men¬toring pay off not just in better performance but also in increased job satisfaction and decreased turnover. But what makes coaching and mentoring work best is the nature of the relationship. Out¬standing coaches and mentors get inside the heads of the people they are helping. They sense how to give effective feedback. They know when to push for better performance and when to hold back. In the way they motivate their protégés, they demonstrate empathy in action.

In what is probably sounding like a refrain, let me repeat that empathy doesn't get much re¬spect in business. People wonder how leaders can make hard deci¬sions if they are "feeling" for all the people who will be affected. But leaders with empathy do more than sympa¬thize with people around them: they use their knowledge to improve their companies in subtle but important ways.

Social Skill

Social skill is Friendliness with a purpose: moving people in the direction you desire.

The first three components of emotional intelli¬gence are all self-management skills. The last two, empathy and social skill, concern a person's ability to manage relationships with others. As a compo¬nent of emotional intelligence, social skill is not as simple as it sounds. It's not just a matter of friendli¬ness, although people with high levels of social skill are rarely mean-spirited. Social skill, rather, is friendliness with a purpose: moving people in the direction you desire, whether that's agreement on a new marketing strategy or enthusiasm about a new product.

Socially skilled people tend to have a wide circle of acquaintances, and they have a knack for finding common ground with people of all kinds - a knack for building rapport. That doesn't mean they social¬ize continually; it means they work according to the assumption that nothing important gets done alone. Such people have a network in place when the time for action comes.

Social skill is the culmination of the other di¬mensions of emotional intelligence. People tend to be very effective at managing relationships when they can understand and control their own emo¬tions and can empathize with the feelings of others. Even motivation contributes to social skill. Re¬member that people who are driven to achieve tend to be optimistic, even in the face of setbacks or fail¬ure. When people are upbeat, their "glow" is cast upon conversations and other so¬cial encounters. They are popular, and for good reason.

Because it is the outcome of the other dimensions of emotional intelligence, social skill is recog¬nizable on the job in many ways that will by now sound familiar. Socially skilled people, for in¬stance, are adept at managing teams-that's their empathy at work. Likewise, they are expert persuaders-a manifestation of self-awareness, self-regulation, and empathy combined. Given those skills, good persuaders know when to make an emotional plea, for instance, and when an appeal to reason will work better. And motivation, when publicly visible, makes such people excellent collaborators; their passion for the work spreads to others, and they are driven to find solutions.

But sometimes social skill shows itself in ways the other emotional intelligence components do not. For instance, socially skilled people may at times appear not to be working while at work. They seem to be idly schmoozing-chatting in the hall¬ways with colleagues or joking around with people who are not even connected to their "real" jobs. So¬cially skilled people, however, don't think it makes sense to arbitrarily limit the scope of their relation¬ships. They build bonds widely because they know that in these fluid times, they may need help some¬day from people they are just getting to know today.

For example, consider the case of an executive in the strategy department of a global computer man¬ufacturer. By 1993, he was convinced that the com¬pany's future lay with the Internet. Over the course of the next year, he found kindred spirits and used his social skill to stitch together a virtual community that cut across levels, divisions, and nations. He then used this de facto team to put up a corpo¬rate Web site, among the first by a major company. And, on his own initiative, with no budget or for¬mal status, he signed up the company to participate in an annual Internet industry convention. Calling on his allies and persuading various divisions to donate funds, he recruited more than 50 people from a dozen different units to represent the com¬pany at the convention.

Emotional intelligence can be learned. The process is not easy. It takes time and commitment.

Management took notice: within a year of the conference, the executive's team formed the basis for the company's first Internet division, and he was formally put in charge of it. To get there, the executive had ignored conven¬tional boundaries, forging and maintaining connections with people in every corner of the or¬ganization.

Is social skill considered a key leadership capability in most companies? The answer is yes, especially when compared with the other components of emo¬tional intelligence. People seem to know intuitively that leaders need to manage relationships effectively; no leader is an island. After all, the leader's task is to get work done through other people, and social skill makes that possi¬ble. A leader who cannot express her empathy may as well not have it at all. And a leader's moti¬vation will be useless if he cannot communicate his passion to the organization. Social skill allows lead¬ers to put their emotional intelligence to work.

It would be foolish to assert that good-old-fash¬ioned IQ and technical ability are not important ingredients in strong leadership. But the recipe would not be complete without emotional intelli¬gence. It was once thought that the components of emotional intelligence were "nice to have" in busi¬ness leaders. But now we know that, for the sake of performance, these are ingredients that leaders "need to have."

It is fortunate, then, that emotional intelligence can be learned. The process is not easy. It takes time and, most of all, commitment. But the bene¬fits that come from having a well-developed emo¬tional intelligence, both for the individual and for the organization, make it worth the effort.

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