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::: Business Case
for Emotional Intelligence :::
The single most determining factor which distinguishes star performers in
every field, from entry level to top executive positions is not IQ,
qualification or technical expertise, but it is a quality Daniel Goleman
calls Emotional Intelligence
Self awareness,
self confidence,
self control,
commitment, integrity,
ability to communicate and influence,
to initiate and accept change
These competencies are at a premium in today's job market
The higher up the leadership ladder you go, the more vital these skills
become.
Corporate training must therefore change to incorporate EI if it is to be
effective
Unlike IQ, Emotional Competence can be cultivated and strengthened at any
stage of life
::: Research :::
Competency research in over 200 companies and organizations worldwide
suggests that about one third of the difference between average and top
performers is due to technical skill and cognitive ability while
two-thirds is due to emotional competence (Goleman, 1998).
A study of 130 executives found that how well people handled their own
emotions determined how much people around them preferred to deal with
them (Walter V. Clarke Associates, 1997).
For 515 senior executives analyzed by the search firm Egon Zehnder
International, those who were primarily strong in emotional intelligence
were more likely to succeed than those who were strongest in either
relevant previous experience or IQ. The study included executives in Latin
America, Germany, and Japan, and the results were almost identical in all
three cultures.
The level of Self-Confidence was in fact a stronger predictor of
performance than the level of skill or previous training (Saks, 1995). In
a sixty-year study of more than one thousand high-IQ men and women tracked
from early childhood to retirement, those who possessed Self-Confidence
during their early years were most successful in their careers (Holahan &
Sears, 1995).
Outstanding leaders integrate emotional realities into what they see and
so instill strategy with meaning and resonance. Emotions are contagious,
particularly when exhibited by those at the top ...Goleman
The emotional tone set by a leader tends to
ripple outward with remarkable power (Bachman, 1988).
Team members tend to share moods, both good and bad-with better moods
improving performance (Totterdell, Kellett, Teuchmann, & Briner, 1998).
The evidence suggests that emotionally
intelligent leadership is key to creating a working climate that nurtures
employees and encourages them to give their best. That enthusiasm, in
turn, pays off in improved business performance. (Williams, 1994).
The data showing the crucial role EI skills
play in career success make a compelling case for re-envisioning higher
education in order to give these capabilities their place in a
well-rounded curriculum.
In top leadership positions, over four-fifths
of the difference is due to emotional competence.
::: Increased Sales,
Reduced Turnover at L’Oreal :::
At L’Oreal, sales agents selected on the basis of certain emotional
competencies significantly out sold salespeople selected using the
company’s old selection procedure.
In the most complex jobs (insurance
salespeople, account managers), a top performer is 127 percent more
productive than an average performer (Hunter, Schmidt, & Judiesch, 1990).
On an annual basis, salespeople selected on
the basis of emotional competence sold $91,370 more than other salespeople
did, for a net revenue increase of $2,558,360.
Salespeople selected on the basis of
emotional competence also had 63% less turnover during the first year than
those selected in the typical way (Spencer & Spencer, 1993; Spencer,
McClelland, & Kelner, 1997).
::: Increased Sales
at Life Insurance Company :::
In a national insurance company, insurance sales agents who were weak in
emotional competencies such as self-confidence, initiative, and empathy
sold policies with an average premium of $54,000.
Those who were very strong in at least 5 of 8 key emotional competencies
sold policies worth $114,000 (Hay/McBer Research and Innovation Group,
1997).
::: Attrition :::
In a large beverage firm, using standard methods to hire division
presidents, 50% left within two years, mostly because of poor performance.
When they started selecting based on emotional competencies such as
initiative, self-confidence, and leadership, only 6% left in two years.
The executives selected based on emotional competence were far more likely
to perform in the top third based on salary bonuses for performance of the
divisions they led: 87% were in the top third. In addition, division
leaders with these competencies outperformed their targets by 15 to 20
percent. Those who lacked them under-performed by almost 20% (McClelland,
1999).
::: Preventing Executive Derailment :::
Research by the Center for Creative Leadership has found that the primary
causes of derailment in executives involve deficits in emotional
competence. The three primary ones are difficulty in handling change, not
being able to work well in a team, and poor interpersonal relations.
Social Skills Training for Supervisors Leads to Productivity Gains in
Manufacturing
After supervisors in a manufacturing plant received training in emotional
competencies such as how to listen better and help employees resolve
problems on their own. After training: lost-time accidents were reduced by
50 percent formal grievances were reduced from an average of 15 per year
to 3 per year the plant exceeded productivity goals by $250,000 (Pesuric &
Byham, 1996).
In another manufacturing plant where
supervisors received similar training: production increased 17 percent.
There was no such increase in production for a group of matched
supervisors who were not trained (Porras & Anderson, 1981).
::: Accurate Self-Assessment Leads to Superior
Performance in Managers :::
One of the foundations of emotional competence -- accurate self-assessment
-- was associated with superior performance among several hundred managers
from 12 different organizations (Boyatzis, 1982).
::: Self-Regulation Produces Success in Store
Managers :::
Another emotional competence, the ability to handle stress, was linked to
success as a store manager in a retail chain. The most successful store
managers were those best able to handle stress.
Success was based on net profits, sales per square foot, sales per
employee, and per dollar inventory investment (Lusch & Serpkeuci, 1990).
::: Learned Optimism Generates Greater Sales in
Life Insurance :::
Optimism is another emotional competence that leads to increased
productivity. New salesmen at Met Life who scored high on a test of
"learned optimism" sold 37 percent more life insurance in their first two
years than pessimists (Seligman, 1990).
A study of 130 executives found that how well people handled their own
emotions determined how much people around them preferred to deal with
them (Walter V. Clarke Associates, 1997).
Emotional Competence Helps Computer Sales Reps to Finish Training
Successfully
For sales reps at a computer company, those hired based on their emotional
competence were 90% more likely to finish their training than those hired
on other criteria (Hay/McBer Research and Innovation Group, 1997).
Emotional Competence Reduces the Drop-out Rate in Sales
At a national furniture retailer, sales people hired based on emotional
competence had half the dropout rate during their first year (Hay/McBer
Research and Innovation Group, 1997).
::: Emotional Intelligence Leads to Success in
Top Executives Around the World :::
For 515 senior executives analyzed by the search firm Egon Zehnder
International, those who were primarily strong in emotional intelligence
were more likely to succeed than those who were strongest in either
relevant previous experience or IQ.
In other words, emotional intelligence was a better predictor of success
than either relevant previous experience or high IQ. More specifically,
the executive was high in emotional intelligence in 74 percent of the
successes and only in 24 percent of the failures. The study included
executives in Latin America, Germany, and Japan, and the results were
almost identical in all three cultures.
::: References :::
Boyatzis, R. (1982). The competent
manager: A model for effective performance. New York: John Wiley and Sons.
Goleman, D. (1998). Working with emotional intelligence. New York: Bantam.
Hay/McBer Research and Innovation Group (1997). This research was provided
to Daniel Goleman and is reported in his book (Goleman, 1998).
Hunter, J. E., Schmidt, F. L., & Judiesch, M. K. (1990). Individual
Differences in Output Variability as a Function of Job Complexity. Journal
of Applied Psychology, 75, 28-42.
Lusch, R. F., & Serpkeuci, R. (1990). Personal differences, job tension,
job outcomes, and store performance: A study of retail managers. Journal
of Marketing.
McClelland, D. C. (1999). Identifying competencies with behavioral-event
interviews. Psychological Science, 9(5), 331-339.
Pesuric, A., & Byham, W. (1996, July). The new look in behavior modeling.
Training and Development, 25-33.
Porras, J. I., & Anderson, B. (1981). Improving managerial effectiveness
through modeling-based training. Organizational Dynamics, 9, 60-77.
Richman, L. S. (1994, May 16). How to get ahead in America. Fortune,
46-54.
Seligman, M. E. P. (1990). Learned optimism. New York: Knopf.
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