How great leaders are using emotional intelligence (EQ) to build business capital

Interview with Dr Martyn Newman, consultant psychologist and Visiting Fellow at Sheffield Business School








“Today every leader is dancing naked on the table.”

Senior leaders today are expected to be more visible than ever before. Trends such as the gradual shift towards flatter organisational structures and the rise of social media mean that leaders can no longer direct their companies from ivory towers. Workforce demographics are changing, and the younger generation of workers expect to really know and understand their leaders. So how do leaders meet these expectations, whilst motivating and inspiring their teams to achieve business success and fulfil their potential?

Dr Martyn Newman believes that the answer lies in a leadership style that embraces emotional intelligence (EQ) and builds emotional capital.

What is the role of leaders in today’s business environment?

As a psychologist, one of my primary roles is to help people think about the future and find resources inside themselves to realise their potential. I’m convinced that there are similarities with this and the role leaders play. Leadership is about helping people to imagine the future and understand why the future can be better than the present. Leaders should be able to describe a vision of what that future looks like and inspire employees to create it.

Sheffield Business School is conducting research into the learning and development gap in large organisations. From your experience with corporates, is there a mismatch between organisational vision and execution by employees?

Yes I think so. Some people can be good at knowing what they want to achieve but be less clear about the strategy to achieve it. There are only two ways to influence behaviour: you can either manipulate it or you can inspire it. Now, whey I say manipulate I not suggesting anything negative. All of us use various sticks and carrots to encourage people to get things done – it works. But if you really want to engage people and extract long-term commitment to achieving your objectives then you’ve really got to know how to inspire this behaviour in your people. The challenge of leadership is first and foremost the challenge of engagement and I think that leadership strategies that only focus on rewards and consequences are fundamentally misplaced.

What’s often missing is that leaders know what they want, but they are missing the ability to tell the right story in order to create clear and compelling visions.

Good leaders know how to inspire people.

How can they do this better?

Recently we’ve come to understand that emotional intelligence can be a backstage pass to the kinds of behaviours that leaders should demonstrate. I believe some of the most important include:

(1)    Self-knowledge and Self-confidence – for leaders to be authentic they need to know themselves and their values and display confidence and conviction in order to inspire others to share their vision.

(2)    A belief in the talents of others – leaders need to treat colleagues and employees as competent people with talent, so they believe they can realise their chosen outcome. Your positive expectations of other people will do more to determine their performance than just about anything else. People will work well for you in direct proportion to how much they like you and they will like you in direct proportion to how you make them feel. Leaders need to become a resource to others and create a climate in which people feel secure. They do this by taking responsibility and by being transparent about their actions.

(3)    Optimism – A good leader needs to be an optimistic person. This does not imply that they are naive. Optimism as a business strategy involves being able to see what’s over the horizon and a deep resilience in the face of setback. Leaders who demonstrate this make it clear to people what opportunities there are in the face of adversity. They also demonstrate a mental toughness and are able to celebrate the achievements of the group and are the bearer of good news. This is how they maintain morale.

Fundamentally, these are all emotional intelligence skills that bring the strategy to life.

Can you give a good example of this in practice in business?

Singtel is a large telecommunications company in Asia Pacific and we recently worked with their Australian subdivision, Optus. They run a large number of different training and (talent) development programmes for staff.

Three out of seven of these leadership programmes embraced emotional intelligence training for senior executives. Once these very technically competent people recognised the power of tapping into social and emotional skills, they negotiated some very successful outcomes. There was a 19% improvement in leadership engagement, a 6% increase in employee engagement and a 6% increase in customer focus amongst staff (independently measured by engagement metrics such as the Gallup tools). These represent remarkable changes in such a short period of time.

Did this also translate into increased sales?

There are always a large variety of variables influencing financial indicators and the economic value add of a particular program is always challenging to measure in detail. It’s a little more straightforward when it comes to sales though. For example, not that long ago we worked with the insurance firm Friends First in Ireland. Their top sales executives were able to demonstrate a significant increase in their sales revenue once they had undergone training to develop their emotional intelligence skills. In this instance there was a more direct relationship to EI skills and revenue generation.

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However, it’s not as straightforward when measuring leadership development. A good example came from my work with the large US aerospace company, Boeing Australia. Having committed to building a culture of engaged workers, Boeing undertook a leadership development programme based on the Emotional Capital model and found a direct correlation between the quality of leadership skills and the staff attrition rate.

For more information on this, see the Sunday Times article co-featuring Sandra James, Boeing HR Director at the time, and myself

What kinds/sort of leadership problems can EQ principles solve, and what challenges can there be in implementing them?

In our 12 years of running leadership programmes at RocheMartin, I’ve yet to see an organisation who has fully committed to building emotional capital fail to achieve a very significant improvement in leadership performance. This is true even of engineering or technology companies with highly skilled and technically competent people, who may not initially see the value in emotional intelligence. However, just as technical knowledge and skills can be used to solve a technical problem, so emotional skills can also be used to solve people problems and improve staff retention.

Imagine, you are tasked with implementing a new way of working and getting everyone on board. You propose the idea to your project team – one person loves it, one isn’t sure and one strongly disagrees then begins to persuade the second person to disagree too. This problem cannot be solved with intellect alone. Intelligence gives us sophisticated skills to engage all parties and reach an agreement that everyone commits to.

Is emotional intelligence training an effective way of dealing with conflict?

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While we don’t seek out companies looking for conflict resolution, they often come to us. Problems can include business relationships not working, low morale, low productivity or high staff turnover. Hostility seriously affects productivity levels.

In terms of the techniques we use – rather than addressing conflict directly, we find it more helpful to provide people with a new language that helps them name and explain their behaviour as well as a new set of skills for managing it. Using the emotional capital model provides people with a new way of understanding the value of each relationship and how best to work with the difficult aspects of maintaining it. It also provides a mirror through which to see and understand their own emotional reactions and needs. The philosopher Plato once said, ‘when you meet another human being treat them kindly, remember they’re fighting a battle.’ This is very insightful I think. Once people understand the conflict that fuels their own behaviours and generates conflictual behaviour in others they’re in a much stronger position to know how to respond creatively to achieve constructive outcomes. This is essential emotional intelligence at work.

What is the biggest challenge for leaders today?

The big challenge for senior business leaders today is that the new generation of workers expect to know their leaders much more personally. I’ve just done work with 90 senior leaders at Ernst & Young. Senior accountants can be introverted and low key by nature, but young workers today expect their leaders to be more visible. They want to know about their beliefs, interests and values. Today every leader is dancing naked on the table, so managing your leadership brand is more critical than ever.

A recent Junior Achievement survey asked 1000 young people to rank entrepreneurs in terms of who they respected most or had most influence. Steve Jobs topped the vote. When asked why: the young people said it was because he made a difference; because he changed the world for the better and improved people’s lives.

Senior leaders today need to recognise that in order to lead great organisations that are profitable and have huge impact, they need to become more intimately involved. They need to know how to motivate and inspire people. People want to believe in something bigger than themselves. To attract and retain the most talented people is the most important strategic issue for every company today and tomorrow. The most competitive market of the future is the labour market. To attract the most talented people, organisations must focus on building exceptional workplace cultures where passionate people can innovate and drive change. This is the fundamental challenge leaders face. It’s the challenge of building emotional capital.

Dr Martyn Newman’s talk at Sheffield Hallam University

Dr Martyn Newman will be coming to Sheffield to on 27th June to give a talk exploring the science of Emotional Intelligence (EQ) and the compelling business case for leadership success.  This event is now fully booked but you can follow us on twitter at the #leadershipeq.  For people that can’t attend the event we will be producing a blog of the event and a ten minute animated sketchvideo.  Watch this space.

Emotional Capitalists – The New Leaders
27 June 2013
5.30pm refreshments for 6pm start
Stoddart 7140, City Campus, Sheffield

More information here


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