Research shows that people with strong emotional intelligence are more likely to succeed than those with high IQs or relevant experience.
We’ve learned that emotional intelligence (EQ) is a crucial skill for both leaders and employees. But several studies point to just how important EQ can be to success, even trumping IQ and experience.
Research by the respected Center for Creative Leadership (CCL) in the U.S. found that the primary causes of executive derailment involve deficiencies in emotional competence. Each year, CCL serves more than 20,000 individuals and 2,000 organizations, including more than 80 of the Fortune 100 companies. It says the three main reasons for failure are difficulty in handling change, inability to work well in a team, and poor interpersonal relations.
International search firm Egon Zehnder International analyzed 515 senior executives and discovered that those who were strongest in emotional intelligence were more likely to succeed than those strongest in either IQ or relevant previous experience. Research that has been done on the relationship between emotional intelligence (EQ) and IQ has shown only a weak correlation between the two.
The Carnegie Institute of Technology carried out research that showed that 85% of our financial success was due to skills in «human engineering», personality, and ability to communicate, negotiate, and lead. They found that only 15% was due to technical ability. In other words people skills or skills highly related to emotional intelligence were crucial skills. Nobel Prize winning Israeli-American psychologist Daniel Kahneman found that people would rather do business with a person they like and trust rather than someone they don’t, even if that that person is offering a better product at a lower Price.
To test out his findings, think of the last time you purchased a major item, a home, automobile, or large appliance where you had to dealings with a salesperson. Was the person someone who you liked and trusted? In my talks, I have found that whenever I asked that question, inevitably the entire audience answered that, yes, the person they bought a large item from was someone they liked and trusted. This theory about why salespeople with the right people skills do better than those who lack them is borne out by a study carried out by the Hay/McBer Research and Innovation Group in 1997. In a study carried out in a large national insurance company in 1997, they found that sales agents weak in emotional areas such as self-confidence, initiative, and empathy sold policies with an average premium of $54,000, while those strong in 5 of 8 emotional competencies sold policies on the average worth $114,000.
Much of the research that has been done on emotional intelligence has been at the executive leadership level. The higher up the organization, the more crucial emotional intelligence abilities are as the impacts are greater and felt throughout the entire organization. There have been some studies, however, that show impacts at all levels.
For example, a study by McClelland in 1999 showed that after supervisors in a manufacturing plant received training in emotional competencies such as how to listen better, lost-time accidents decreased by 50% and grievances went down from 15 per year to three. The plant itself exceeded productivity goals by $250,000.
The same principles apply in all areas of life, whether at work or in relationships. Everyone wants to work with people who are easy to get along with, supportive, likeable, and can be trusted. We want to be beside people that do not get upset easily and can keep their composure when things do not work out according to plan.
How Do You Hire Emotionally Intelligent People?
Self-awareness. The first thing that is essential for any degree of emotional intelligence is self-awareness. People with a high degree of self-awareness have a solid understanding of their own emotions, their strengths, weaknesses, and what drives them. Neither overly critical nor unrealistically hopeful, these people are honest with themselves and others. These people recognize how their feelings impact them, other people around them, and their performance at work. They have a good understanding of their values and goals and where they are going in life. They are confident as well as aware of their limitations and less likely to set themselves up for failure.
We can recognize self-aware people by their willingness to talk about themselves in a frank, non-defensive manner. A good interview question is to ask about a time that the interviewee got carried away by their emotions and did something they later regretted. The self-aware person will be open and frank with their answers. Self-deprecating humor is a good indicator of someone who has good self-awareness. Red flags are people who stall or try to avoid the question, seem irritated, or frustrated by the question.
Ability To Self-Regulate Emotions. We all have emotions which drive us and there is nothing we can do to avoid them. People who are good at self-regulation, however, are able to manage their emotions so that they do not control their words and actions. While they feel bad moods and impulses as much as anyone else, they do not act upon them. People who act upon their negative feelings create havoc, disruptions, and lasting bad feelings all around them. We feel before we think and people who constantly react from an emotional state never wait long enough to allow their thoughts to override their emotions.
People who self-regulate have the ability to wait until their emotions pass, allowing them to respond from a place of reason, rather than simply reacting to feelings. The signs of someone who is good at self-regulation are reflection, thoughtfulness, comfort with ambiguity, change, and not having all the answers. In an interview, look for people who take a little time to reflect and think before they answer.
Empathy. Empathy is another important aspect to look for when hiring. Someone who has empathy will have an awareness of the feelings of others and consider those feelings in their words and actions. This does not mean that they will tiptoe around or be unwilling to make tough decisions for fear of hurting someone’s feelings. It simply means that they are aware of, and take into consideration the impact on others. They are willing to share their own worries and concerns and openly acknowledge other’s emotions. A good way to look for empathy in an interview is to ask a candidate about a situation where a co-worker was angry with them and how they dealt with it. Look for a willingness to understand the source of the co-workers anger, even though they may not agree with the reasons for it.
Social skills. Social skill is another area of emotional intelligence that is highly important in the workplace. To have good social skills requires a high level of the other skills aforementioned as well as the ability to relate and find common ground with a wide range of people. It goes beyond just friendliness and the ability to get along with others.
People with social skills are excellent team players as they have the ability to move an agenda along and keep focus while at the same time remaining aware of the emotional climate of the group and possess the ability to respond to it. These people are excellent at making connections, networking, and bringing people together to work on projects. They are able to bring their emotional intelligence skills into play in a larger arena. To look for social skills in an interview, ask questions related to projects and difficulties encountered around varying agendas, temperaments, and getting people to buy in.
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As we all know, young workers are a contemptible bunch. They’re “lazy,” and lack the admirable work ethic of their elders. They have an overblown sense of entitlement, believing they have some kind of right to walk right into a plum job in their early twenties rather than working their way up. They might even be a generation of narcissists, a consequence of their over-indulgent helicopter parents and a culture that favors giving every kid on the soccer team a trophy just for showing up.
Actually, like many things “we all know,” these nasty stereotypes disintegrate quickly when exposed to the harsh light of research evidence. For the past 20 years I have been studying 18- to 29-year-olds, a stage of life I call “emerging adulthood.” I coined this term to help people recognize that young people grow up later than they did in the past, in terms of entering adult commitments such as stable work, marriage, and parenthood. The rise of emerging adulthood does not mean that young people today are defective, only that it takes longer to prepare for the workplace than it did before and that they (wisely) want to enjoy a brief period of freedom before settling into adult responsibilities. My research, involving many hundreds of in-depth interviews and several national surveys involving thousands of young people, has shown that the negative stereotypes are mostly false and today’s emerging adults are a remarkably idealistic and hard-striving generation.
Our recent 2015 Clark University Poll of Emerging Adults, asked a national sample of 1,000 21- to 29-year-olds a wide range of questions related to education and the entry to work. We focused on ages 21 to 29 because the goal was to examine the transition to work during the twenties. The results were illuminating, and provide important information for anyone who works with or employs emerging adults. Here are some of the highlights:
Not lazy, but often not fully committed to the job. Most see themselves as diligent workers; 89% agreed that “No matter what job I am doing, I try to do it as well as possible.” However, 40% also admitted that “On a normal work day, I try to get by with doing as little work as possible.” This blasé attitude may be due to the fact that many of them are currently in transition jobs, while they finish school or try to decide what field they really want to pursue; 46% agreed that “My job with my current employer is temporary.”
Willing to work their way up, but not to be exploited. They recognize that it takes time to gain expertise in a job, which often means doing the lower-level work for a while; 78% agreed that “If I were in a boring job, I would be patient and try to move up within the company.” On the other hand, they believe that good faith should go both ways; 54% agreed that “If employers do not pay me well, they do not deserve my best work effort.”
Many are distracted by social media while on the job. Today’s emerging adults have been called a generation of “digital natives” who grew up with social media as second nature, in contrast to their mostly “digital immigrant” employers, who came to social media later and often grudgingly. This generation gap is evident in the 2015 Clark Poll results, in which 54% agreed that “I do not see anything wrong with checking my Facebook page, tweeting, or texting with friends now and then in the course of a normal work day.” One suspects their employers would beg to differ.
In addition to these recent findings, previous research has shown emerging adults to be not the narcissists of legend but strikingly idealistic and generous-hearted about work. In the 2012 Clark University Poll of Emerging Adults, which was also a national survey, 79% of 18- to 29-year-olds agreed that “It is more important to enjoy my job than to make a lot of money,” and 86% agreed that “It is important to me to have a career that does some good in the world.” These expectations may be unrealistically high; in the 2015 poll, 76% stated that “I am still looking for my ideal job.” Also, 71% admitted that “I have not made as much progress in my career as I would have hoped by now.” They remain restless and searching as emerging adults; 66% agreed that “My current job is not in the field I hope to be in 10 years from now.”
So what is the bottom line here for their older colleagues who are puzzled by these young workers? I’d recommend giving them a chance to show who they are and what they can do, as individuals. That is, don’t assume they are going to fulfill your worst expectations for their generation. They may not be as diligent as you would like them to be, or as focused on work that is more important to you than it is to them at this transitional time of their lives. They may be more distractible by social media than you would wish, and less committed to staying with your company for the long run. But they are eager to find engaging work that they can enjoy, and to do something important that can make some kind of positive contribution to the world around them. If you can find ways to direct their energy and idealism in productive ways, they may surprise you.
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The Study: Henrik Cronqvist of the University of Miami and Frank Yu of China Europe International Business School compared the corporate social responsibility ratings of S&P 500 companies with information about the offspring of their chief executive officers. The researchers found that when a firm was led by a CEO with at least one daughter, it scored an average of 11.9% higher on CSR metrics and spent 13.4% more of its net income on CSR than the median.
The Challenge: Do daughters make us better corporate citizens? Could the gender of your child really affect the way you run a business?
Professor Cronqvist, defend your research.
Cronqvist: There is definitely a correlation. Controlling for other factors, companies run by executives with female children rated higher on the measures of diversity, employee relations, and environmental stewardship tracked by the CSR research and analytics group KLD from 1992 to 2012. We also saw a smaller but still meaningful link with the provision of products and services that are more socially responsible. And having daughters coincided with spending significantly more net income on CSR than the median. That female influence does appear to affect the decisions these executives make, which translates into shifted priorities for their organizations.
HBR: So daughters—not sons—support CSR, and their parents follow that lead?
That’s the theory. The literature in economics, psychology, and sociology suggests that women tend to care more about the well-being of other people and of society than men do, and that female children can increase those sympathies in their parents. For example, research from Eboyna Washington at Yale has shown that U.S. congressmen who have daughters tend to vote more liberally, particularly on legislation involving reproductive rights. Adam Glynn of Emory and Maya Sen of Harvard found a similar pattern among U.S. Court of Appeals judges in cases involving gender issues.
We’ve always known that parents influence their children. It’s clear now that the reverse is also true. Children can change the way their parents think and act—not just at home but also at work. It’s a different spin on nurture versus nature.
Just one daughter does the trick?
When we looked at family size, we found that CEOs had 2.5 children, on average—a bit higher than the U.S. standard—and that 48.5% of all those kids were girls, which corresponds to the gender ratio in the general population. Ratings for and spending on CSR at companies did increase the more daughters a CEO had, but the effect wasn’t linear. Just having the treatment (a daughter) mattered much more than the dosage (the number of daughters).
Does the age of the daughter matter?
What matters is probably not the birth per se but the accumulation of experiences over time. The median age of S&P 500 CEOs in our sample was 57, so most of them have grown children. Those with girls may, for example, have seen their daughters discriminated against in the labor market, which could have an impact on their attitudes about equality.
What about female CEOs? Do they need this “treatment” to prioritize CSR, or does nature take care of that?
Unfortunately, our sample of female CEOs—14 out of the 379 executives for which we could collect data—was too small to draw any firm conclusions. But the companies they led did have much stronger CSR ratings in every KLD-tracked category—not only diversity, employee relations, environment, and product, but also human rights and community. We suspect that a CEO’s own gender matters even more than the gender of his or her children. By our calculation, having a male CEO with a daughter produces slightly less than a third of the effect of having a female CEO. Comparisons of the data on congressmen and judges yielded similar numbers. So you could hypothesize that, on average, any man behaves one-third more “female” when he parents a girl.
Do sons do anything for you?
All we know is that they show no effect on CSR ratings or spending at their parents’ companies. It would be interesting to see if they matter for other economic behaviors—risk taking, for example.
What about wives or sisters? Could they influence executives too?
We originally intended to study the broad structure of the CEOs’ families. But even the data on children was difficult to collect. Out of 1,224 S&P 500 CEOs who served and whose companies were ranked by KLD during the period we studied, we could find information on the number and gender of offspring for only 379. Finding out whether they had a sister or not might have been impossible, though it would be interesting to test that one out. As for spouses, we didn’t look at that factor specifically, but given that most of the male CEOs with sons had wives and that sons had no effect on CSR ratings, we would guess that wives don’t matter as much for this issue.
Going back to daughters: Should the shareholders of S&P 500 companies be concerned about the undue influence they’re having on how CEOs spend company money?
It wasn’t our goal to determine whether the economic outcome here was good or bad. We just wanted to know why some companies invest more time and money in socially responsible endeavors than others do. Some of it may have to do with the company itself—the industry or sector in which it operates, or its culture, mission, or location. But the specific executives in charge probably play a role too. Alberta Di Giuli at ESCP Europe and Leonard Kostovetsky at the University of Rochester looked at the impact of the political affiliations of founders, CEOs, and directors and found that U.S. firms led by those who leaned Democratic had higher CSR ratings and spending than the firms run by Republicans did. Of course, whom you vote for is a choice, which could be correlated to many other factors. The gender of your child typically isn’t: The odds of having a boy or a girl is roughly 50/50 every time. That’s why we thought it was a less obvious and more interesting characteristic to study. You might say it’s surprising that these very powerful people can be influenced by their children. But there are lots of studies showing that professional investors succumb to the same biases as the rest of us.
Would you expect to see the same relationship between CEOs’ daughters and social responsibility at non-U.S. companies?
It’s possible, though cultural attitudes about gender equality would certainly have to be factored in. Maybe having a daughter would matter less in patriarchal societies; maybe it would matter more. You could certainly get the CSR ratings for firms in other parts of the world, but collecting the information about executives’ children would be more of a challenge.
Why are you and your coauthor so interested in CSR? Let me guess: You have daughters.
Actually, I don’t have any children. Frank just had his first—a son. Either way, we’re going to keep studying this topic. Researchers should do more work to understand the impact of the family on corporate decision making.
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