The Affect of Emotional Intelligence on a Modern Organizational Leader’s Ability to Make Effective Decisions
By Samuel E. Bliss
Introduction
Effective management of organizations and human resources is facing enormous challenges. Organizations are downsizing, reengineering themselves to compete in the global market and facing an explosion of available information (Luthans, 1998). Max Messmer (1999), CEO of Robert Half, said in a recent survey of 150 executives from some of the nation’s largest companies, that leadership skills were identified as the most important assets of managers. James E. Perrella (1999), Chairman, President and CEO, Ingersoll Company, stated
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These two examples indicate the growing importance of finding, hiring, training, and retaining leaders with high emotional intelligence.
Emotional intelligence is defined as a person’s self-awareness, self-confidence, self-control, commitment and integrity, and a person’s ability to communicate, influence, initiate change and accept change (Goleman, 1998). Studies have shown that emotional intelligence impacts a leader’s ability to be effective (Goleman, 1998). Three of the most important aspects of emotional intelligence for a leader’s ability to make effective decisions are self-awareness, communication and influence, and commitment and integrity. Managers who do not develop their emotional intelligence have difficulty in building good relationships with peers, subordinates, superiors and clients (Goleman, 1998).
The following paper is an examination of how emotional intelligence affects a leader’s ability to make effective decisions. The first part of the essay defines the parameters of emotional intelligence, leadership and effective decision-making. This is followed by a discussion of how the aspects of emotional intelligence affect a leader’s ability to make good decisions and how emotional intelligence is integral to Stephen Covey’s seven habits of highly successful people and
Definition and Motive
"When it comes to improving organizational effectiveness, management scholars and practitioners are beginning to emphasize the importance of a manager’s emotional intelligence" (Sosik, Megerian, 1999, p. 367). What influence does emotional intelligence have on the effectiveness of decisions made by a modern organizational leader? To answer this question, three concepts need to be defined: emotional intelligence, qualities of a leader, and effective decision-making.
Emotional intelligence
Emotional intelligence is a combination of competencies. These skills contribute to a person’s ability to manage and monitor his or her own emotions, to correctly gauge the emotional state of others and to influence opinions (Caudron, 1999; Goleman, 1998). Goleman describes a model of five dimensions. Each area has its own set of behavioral attributes as follows.
- Self-awareness is the ability to recognize a feeling as it happens, to accurately perform self-assessments and have self-confidence. It is the keystone of emotional intelligence (Goleman, 1995).
- Self-management or self-regulation is the ability to keep disruptive emotions and impulses in check (self-control), maintain standards of honesty and integrity (trustworthiness), take responsibility for one’s performance (conscientiousness), handle change (adaptability), and be comfortable with novel ideas and approaches (innovation).
- Motivation is the emotional tendency guiding or facilitating the attainment of goals. It consists of achievement drive (meeting a standard of excellence), commitment (alignment of goals with the group or organization), initiative (acting on opportunities), and optimism (persistence reaching goals despite set backs).
- Empathy is the understanding of others by being aware of their needs, perspectives, feelings, concerns, sensing the developmental needs of others.
- Social skills are fundamental to emotional intelligence. They include the ability to induce desirable responses in others by using effective diplomacy to persuade (influence); listen openly and send convincing messages (communicate); inspire and guide groups and individuals (leadership); nurture instrumental relationships (building bonds); work with others toward a shared goal (collaboration, cooperation); and create group synergy in pursuing collective goals.
These five characteristics will be shown to apply to a leader’s ability to make effective decisions. Next, the qualities of a leader are defined.
Leadership
What makes a person a leader is still debated, but according to
Effective Leadership
The term effective in this essay can be defined as (1) "getting the job done through high quantity and quality standards of performance, and (2) getting the job done through people, requiring their satisfaction and commitment" (Luthans, 1998, p 427).
Major Findings
What then is the link between emotional intelligence and effective leaders? A study done by John J. Sosik and Lara E. Megerian (1999) looked at the self-awareness component of emotional intelligence and transformational leadership. The results of the study provided empirical support for emotional intelligence being the foundation of other aspects of leadership. The data for the study were collected from 63 managers, 192 subordinates, and 63 management superiors. Managers reported their assessment of their emotional intelligence and leadership behavior; the subordinates reported their view of their manager’s transformational leadership behavior and performance outcomes; and each manager’s superior rated managerial performance. The study tried to answer two questions. The first question tried to find "what aspects of [emotional intelligence] differentiate those leaders who are in agreement with others concerning their transformational leadership qualities from those who are not in agreement" (p. 368). The second question asked "how do non-military leaders who are in agreement with others regarding their transformational leadership qualities differ in terms of performance from those who are not in agreement" (p. 368).
Leaders who underestimated their leadership were positively linked to social self-confidence while leaders who overestimated their abilities were negatively related to sensitivity. The results also suggested "self-awareness may provide individuals with greater perceived control over interpersonal events and consequences in their life…transformational leaders who are self-aware possess high levels of self-confidence and self-efficacy and provide orientation for followers" (p. 384). The authors suggest that self-awareness may enable leaders to understand the emotional implications of their own feelings and thoughts. For example, before a manager uses a 360-degree feedback assessment, they must "understand what depositional attributes and leadership behaviors are associated with managerial effectiveness" (p. 386). Managers who maintain accurate self-awareness have more attributes of emotional intelligence and appear to be more effective to their superiors and subordinates. Interviews of three senior executives revealed that "managers ‘who played the game’ according to established norms were looked upon favorably by superiors in performance evaluations and promotion considerations. However, those interviews also revealed that ‘fast-track’ candidates and the ‘darlings’ of senior management are often seen as self-serving, duplicitous and uncaring by their subordinates" (p. 386). The high public self-consciousness aspect of emotional intelligence may be useful for managers who are interested in success (to maximize performance appraisal ratings), but "this does not guarantee high ratings of transformational leadership and effectiveness by one’s subordinates" (p. 386).
A Leader With Emotional Intelligence
These findings are consistent with Patricia Pitcher’s (1999) description of a company led by one CEO with high emotional intelligence who was succeeded by a CEO without emotional intelligence. She began with a description of the high emotional intelligence CEO (the artist) who took over a medium-sized company. He had a vision to build the company into a global corporation "operating in general and life insurance, banking, trust and investments services" (p. 32) spanning the world. This dream of his was during the time when most people believed banking and insurance would never meet. After 15 years, the company was worth $20 billion dollars and was an integrated service company in Europe, Asia and
Patricia Pitcher explains the generous, people-oriented attributes helped him attract and keep great colleagues and investors. His emotional and inspiring traits allowed his enthusiasm to spread. The visionary, daring, intuitive and unpredictable qualities helped him to keep focused on the goal, avoid short-term gratifications and achieve his goal. His open-mindedness helped the company and himself to develop and retain different kinds of people. This ensured new ideas and fresh approaches to problem solving. The CEO surrounded himself with the best talent he could find. He decentralized the power structure allowing his talented staff to express themselves in their own way. He sat on the independent boards and asked questions, but did not interfere with his staff. The other executives included artists and six craftsmen.
The craftsmen were described as being well-balanced, trustworthy, reasonable, sensible and realistic. They were complementary to the artists. These craftsmen knew what worked and what did not. They understood that people made mistakes, but they learned from them, and if you drove out error, you drove out innovation. These people dealt with the day-to-day operations.
There were six other people in the company whom Pitcher calls the technocrats. These people were described as being "intense, determined, uncompromising, hardheaded, cerebral and analytical." They were often called "brilliant, stiff and distant." (p. 32) Their interpersonal relationships lacked depth, and they misread the people around them. She described the technocrats as people who thought they were "realistic and sensible, even imaginative, but no one else did" (p. 32). Technocrats erred in their judgments of others, markets and situations. They did not learn from the mistakes because they thought others were at fault. Those who made errors would be fired. The article goes on to describe what happened when the CEO felt it was time for him to leave and let ‘fresh air’ into the company.
A Leader Without Emotional Intelligence
In 1980 the company leadership was given to the second-in-command, a technocrat. This leader was analytical, uncompromising and brilliant. Patricia Pitcher believes such a person would find decentralization a sloppy way of doing business. So, the new CEO started to centralize the decision-making processes. He created a new head office that replaced the subsidiaries’ authority. All of the craftsmen and artists running the subsidiaries were gradually fired and replaced by ‘competent professionals’ or technocrats by 1992. Within three years the "organization was dead." If the ‘professionals’ where so brilliant, what caused the company to fail?
Pitcher suggests that the company failed because "If you [do not have] respect for the emotional qualities that come in the imaginative package, you drive out the peculiar vision of an Artist. If you equate experienced with outmoded or old-fashioned, you drive out the Craftsman, who inspires the loyalty and the dedication, and who knows what making widgets is all about. If you fire people for making one mistake, nobody’s going to go out on a limb to make any. Innovation stops. An organization without loyalty, dedication, skill, and dreams can go downhill very fast" (p. 33). She points out that running a modern company requires "all kinds of perspectives – even the cerebral, analytical and uncompromising. The Artists and Craftsmen can live with those different perspectives, but the Technocrat cannot" (p. 33). What does this perspective reveal about the relationship between emotional intelligence and leadership effectiveness?
To answer the question, an examination of the influence of emotional intelligence on the two leaders is required. The first chief executive officer demonstrated most of the attributes associated with emotional intelligence. Accurate self-assessment (self-awareness) was demonstrated by his ability to know his limits and his strengths. He surrounded himself with people who had abilities he did not, e.g. the craftsmen, other artists and technocrats. Daring to follow his dream demonstrated self-confidence (self-awareness) and innovation (self-regulation), aspects of emotional intelligence (Goleman, 1998). His openness to new ideas, decentralization of power and his constant learning (shown by asking questions at board meetings and listening to the responses), demonstrated empathy.
Empathy is being aware of the feelings of others, their concerns and needs. It can be broken down into seeking understanding, development of others’ abilities, leveraging diversity to allow new ideas and opportunities to be heard, and being politically aware of a team’s needs and power structure (Goleman, 1998). The CEO’s social skill, another aspect of emotional intelligence, was demonstrated by cultivating relationships with investors, colleagues, and his employees. These aspects lead to trust which is the second most important characteristic of emotional intelligence (Cooper, 1997).
Trustworthiness is an important element in a leader’s makeup as shown in the previously described study. Without trust, much time and effort is spent on non-productive activities because leaders feel compelled to draw up procedures in great detail, even for simple transactions (Copper, 1997). Innovation will stop when subordinates do not trust the leaders. Creativity will vanish if the sense of trust in an organization is lost and if people are preoccupied with protecting their backs. (Cooper, 1997). The second CEO probably lost the trust of his employees as a result of his lack of emotional intelligence.
Because the new CEO was not aware of how his actions and emotions were affecting others, he could be considered to be lacking in emotional intelligence (Ryback, 1998). Pitcher said that he blamed others for problems and did not look at the situational forces people were reacting to. In order for the technocratic leader to be able to see the situation realistically he must be aware of his own influence on the situation and the motives of others involved. According to Manfred F R Kets de Vries "to be able to decipher these deeper motives-to tease out the emotional, cognitive, and experiential components…requires the capacity to "listen with the third ear… an awareness about our own feelings, the knowledge and skill to handle those feelings, and an appreciation of emotions in other people (empathy)" (1999, p. 752). Mike Miller’s (1999) opinion is that many managers fail because they are too rigid and have poor relationships. As a consequence they are unable to adapt to changes in the business environment, organization, culture, work processes, and technology. Managers unable to receive or respond to feedback are unable to determine how they need to change their approach to leading others.
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