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To answer the question of what makes someone a better business leader; it is useful to establish what the primary purpose of a business leader is. It has been observed by Kotter (2001), Drucker (2005) and others that the primary purpose of a business leader is to create, set, and execute change within an organisation in line with a strategic goal or objective, while at the same time inspiring others to follow. Keeping this purpose in mind, it is not how intellectually intelligent (IQ) a business leader is that determines their ultimate success but rather their level of insight and emotional intelligence (EI) in relation to managing themselves and dealing with others (through self awareness and other key competencies). This is the kind of person that makes a better business leader.
The Relationship between Intelligence and Leadership
A business leader needs to be intelligent enough to gather, synthesise and interpret large amounts of information; and to be able to create visions, solve problems and make correct decisions based on this information. Business leaders need to know how to explain the essentials of what matters in regards to the mechanics of the business. But this requirement does not necessarily translate in to the need for superior intellectual intelligence. Earlier beliefs on leadership assumed that leaders were born which would imply a strong link with intelligence. However more recent research suggests that leaders can be made. According to Kouzes and Posner (2002), "leadership is not the private reserve of a few charismatic men and women. It is a process ordinary people use when they are bringing forth the best from themselves and others". Goleman et al (2003) suggests that we need to strip away conventional notions of what it means to be intelligent by examining how key personality traits can lead to measurable success.
Predicting leadership success involves something more complex and subjective than isolating a person's level of intellectual intelligence. Trait theory takes the view that there is a set of personal traits that differentiate leaders from non-leaders. An early trait mentioned for effective leaders includes intelligence, however more recently contributors such as Jim Collins in his book Good to Great as well as Daniel Goleman point to the importance of emotional intelligence, self awareness and integrity, as well as an emphasis on drawing out the best from your people as opposed to always having to have the answers as a leader. Trait theory is somewhat limiting because leadership effectiveness varies greatly depending on situational factors and the types of people being led. As a result intellectual intelligence is not a universally accepted requirement for effective leadership. Instead it is more useful to isolate the critical situational factors and key competencies that affect leadership effectiveness.
In my own career I have seen and worked with some very intelligent and gifted managers, technicians and even so called leaders. They excel in getting a technical or procedural task done proficiently and beyond expectations. However, when it comes to interacting, leading and communicating with others, both within and outside of their team, they fall well short. This in turn impacts on their overall ability to be effective in a team environment and seriously affects the overall team's effectiveness. Based on this experience as a leader and a manager, in addition to my studies in Leadership and Management, I have learnt to recruit and build my team based on character traits, attitudes and where possible emotional intelligence as opposed to technical competencies. In his book "The Emotionally Intelligent Workplace" Goleman states that organisations need to hire for emotional intelligence along with whatever other technical skill or business expertise they are seeking. When recruiting I have found that it is most useful to ask candidates to provide examples of a time when they have displayed emotional intelligence in the workplace. The very way in which the candidate responds to this question provides an insight to their level of emotional intelligence and their capacity to operate in this way. I can train for technical skills relatively easily however it is much harder and time consuming to try and change a person's internal makeup and attitude. Indeed, with many people this is an impossible task unless they decide to make the conscious choice to change.
At this point it is important to note as outlined by Mayer & Salovey (1997) that emotional intelligence is different to other types of intelligence (such as intellectual intelligence) as it deals with the management of emotions and is concerned with the complex process that links emotion with our cognitive abilities. While intellectual intelligence is important, in its own right it possibly isn't the overall determining factor of a business leader's success. Goleman (1998) says "it's not that IQ and technical skills are irrelevant. They do matter, but mainly as a threshold capability; that is they are entry level requirements for executive positions. My research, along with other studies, clearly shows that emotional intelligence is an essential element of leadership".
Emotional Intelligence Makes a Better Business Leader
While we have established that intellectual intelligence (IQ) is important in a business leader, it could be argued that more than this is required for true leadership success. A possible suggestion based on some of the evidence is that emotional intelligence (EI) and self awareness are examples of key competencies that could also further determine a leaders overall effectiveness. In today's business environment these competencies are often referred to as the "soft issues". Daniel Goleman has argued persuasively that emotionally intelligent managers become the best and most profitable business leaders in the world. In his book "The Emotionally Intelligent Workplace", Goleman puts forward several studies's to support this argument. One example is in a study of CEO's in U.S insurance companies. Given comparable size, companies whose CEO's displayed more EI competencies, showed better financial results in both profit and growth (Williams 1994). A second example found in Goleman's book with a similar relationship between emotional intelligence strengths in a leader and business results was by McClelland (1998) in studying the division heads of a global food and beverage company. The divisions of the leaders with a critical mass of strengths in emotional intelligence competencies outperformed yearly revenue targets by a margin of 15 to 20 percent. The divisions of the leaders weak in emotional intelligence competencies underperformed by about the same margin (Goleman, 1998). While some business leaders do argue that a focus on the "soft issues" such as emotional intelligence is nothing more than a distracting, time wasting, feel good exercise, the evidence from these studies (and many others) would suggest otherwise. This is especially the case when it comes to investigating the link between emotional intelligence strengths in a leader and the performance of an organisation as a direct result of the climate that the EI capable leader creates. Have these sceptical business leaders weak in the area of EI compared their organisations results to that of their peers who are competent in the practice of EI? Is it possible that business leaders who are weak in EI are afraid of what they would reveal if they became more emotionally intelligent and gave due consideration to the so called "soft issues"?
To gain an understanding of what key leadership competencies bring about the type of results seen in the studies above, it is useful to turn to work done by Goleman et al that isolates eighteen key competencies that define emotional intelligence. These competencies can be found in Table 1.0 below. Each competence is part of one of four categories that help define a leaders understanding of himself and those around him (e.g. followers). In his book entitled "Emotional Intelligence: Why it Can Matter More Than IQ", Goleman makes note that the ability to be self-aware increases personal knowledge and the ability to influence the world around us. He calls this ability "emotional competency". Emotionally competent leaders realise that there is a bigger picture than just themselves, and they are then in a position to shake off the limited perspectives that we all traditionally confine ourselves to.
Table 1.0 Emotional Competence
Transparency & Integrity
Ability to develop others
Ability to act as catalyst for change
Teamwork and collaboration
Source: "Primal Leadership" by Goleman et al.
The first two of these categories (Self awareness and Self management) are personal in nature. Self awareness is a deep understanding of your emotions, strengths and weaknesses and provides an ability to accurately and honestly provide self assessment. Self management is a deep control and regulation of your emotions, the ability to stay calm and be clear and focused when things do not go to plan. Self management also provides self motivation and initiative. The second two categories are social in nature. These primarily concern a person's ability to manage relationships with others. This includes communications, influence, collaboration and working with others. All of these competencies both personal and social are necessary ingredients for being able to lead others.
From the discussion above we can see that emotional intelligence begins with self awareness. This can only happen through a process of honest self-reflection and therefore can be very confronting. This is predominately why some choose to take the EI path, while others refuse out of fear of what they might uncover and how they might have to change. Goleman puts forward a theory that ten percent of the population is born with a highly developed ability to naturally utilise emotional intelligence. However, he also suggests that through a commitment to self-discovery and personal growth that the four categories of emotional competencies can be automatically increased, meaning that anyone can become emotionally intelligent.
What is the link between an EI capable leader and enhanced organisational performance? A Hay/McBer analysis of data on 3,781 executives, along with climate surveys filled out by those who worked for them, suggests that 50 to 70 percent of employees perception of the organisational climate is linked to the EI characteristics of the leader and the leadership styles that they use (Goleman, 2000). These leadership styles then creates the climate within the organisation that produces the enhanced organisational performance. A summary of the different leadership styles can be found in Table 2.0 below. Goleman suggests that there are four of these leadership styles that affect the organisational climate in a positive way and produce enhanced performance. The four styles include authoritative, affiliative, democratic and coaching. The most effective leaders move between four or more of the six leadership styles depending on the most appropriate one given the leadership situation.
Table 2.0 Leadership Styles, Emotional Intelligence, and Organisational Effectiveness
In a crisis, to kick-start a turnaround, or with problem employees
When change requires a new vision, or when a clear direction is needed
To heal rifts in a team or to motivate during stressful times
To build buy-in or consensus, or to get valuable input from employees
To get quick results from a highly motive and competent team
To help an employee improve performance or develop long term strengths
Mobilise others to follow a vision
Build commitment through participation
Perform tasks to a high standard
Build strengths for the future
Impact on Climate
Most strongly positive
Drive to achieve; initiative; emotional; self-control
Self-confidence; empathy; change catalyst
Empathy; building bonds; conflict management
Collaboration; team leadership; communication
Conscientiousness; drive to achieve; initiative
Developing others; empathy; emotional self-awareness
Source: Adapted from "The Emotionally Intelligent Workplace" by Goleman & Cherniss.
From Goleman's work it can be seen that one of a leader's greatest assets is emotional intelligence. It is the heart of where truly effective leadership lies. One of the reasons for this is because the key thing that followers look for in a leader is authenticity. Authenticity means that as a leader you are seen as genuine, true to your beliefs, values and principles. These things make up your true self. Unless a leader's true self is displayed to their followers through a process of self awareness, they are unlikely to succeed in their quest to lead. Therefore, self-awareness is required in order to know your true self and in turn to display the necessary authenticity to your followers.
As can be seen in Table 2.0 above, emotional self awareness is central to Daniel Goleman's work on emotional intelligence. It is a key EI leadership competency, particularly within the coaching leadership style. Many business leaders maintain that the coaching leadership style is the most effective. Goleman speaks of emotional self awareness and he explains that this allows a leader to be attuned to their guiding values, and enables them to speak openly about their emotions and show conviction regarding their vision to their followers. Whether we acknowledge it or not, our emotions are a strong driver of our ambitions and to whom we give our allegiance in achieving these ambitions. As leaders it is important for us to be attuned to our emotions. This makes emotional self awareness and intelligence an even further necessary ingredient of effective leadership.
If we do not know who we are and what we stand for as a leader, through being self aware and therefore utilising emotional intelligence, how can we possibly lead an organisation and expect others to follow us? As Peter Drucker has pointed out; "Leadership is not a magnetic personality; that can just as well be a glib tongue. It is not making friends and influencing a person; that is flattery. Leadership is lifting a person's vision to higher sights, the raising of a person's performance to a higher standard, the building of a personality beyond its normal limitations. The best and most dedicated people (followers) are ultimately volunteers, for they have the opportunity to do something else with their lives".
In order for us as leaders to inspire this type of contribution from our followers to the organisation that we lead, we must be self aware and authentic. Truly great leadership, the type that transforms others, does not occur until the leader experiences rapid personal growth through being moved outside of their comfort zone and made to tackle the complexities and emotional minefields that business leaders can face on a daily basis. The application of pure intellectual intelligence (IQ) cannot bring about the level of personal growth and transformation required in others for achieving the type of personal contribution to an organisation that Drucker outlines and indeed that every organisation today strives to achieve.
In my experience, often during the most troubling times, I've found I must look inward to find the answers to problems I am facing. This is especially true when dealing with other people. Why should the corporate world and our role as a leader within it be any different? The answers are always there, but the caveat is, we must be willing to listen to them. Listening requires a great deal of selflessness. It means that one's ego must be put aside for the greater good. Is that possible in the business world? In my optimistic mindset I would like to say yes, but alas, not all people are altruistic. More often than not, the issue then becomes that many of today's business leaders are self-serving and have little to no regard for anything unrelated to improving their own personal wealth and power position or indeed that of the shareholders.
Business leaders with low emotional intelligence (EI) often lack self-awareness and self-compassion, which can lead to a lack of self-regulation. This also makes it very difficult for them to feel compassion and empathy for others. Thus, they struggle to establish sustainable, authentic relationships. Business leaders who do not take time for introspection and reflection may be vulnerable to being seduced by external rewards, such as power, money, and recognition. Or they may feel a need to appear so perfect to others that they cannot admit vulnerabilities and acknowledge mistakes. Some of the recent difficulties of Hewlett-Packard, British Petroleum, CEOs of failed Wall Street firms, and dozens of leaders who failed in the post-Enron era are examples of this. They left it too late before recognising the need to change. As leaders we must be willing to learn from these mistakes. We must look inward through a display of emotional intelligence and be willing to rise to the challenge of personal transformation and change. Only then can we better lead those who choose to follow us within the organisations in which we operate, and only then can we ensure that these mistakes will never be repeated again.
Leadership is not scientific requiring a high degree of intellectual intelligence; rather it is relational, requiring a high degree of emotional intelligence built upon an awareness of oneself and a personal commitment to change. How our actions influence those around us is vital to being a better business leader. How well we handle ourselves and other people will eventually determine our ultimate success. Being a better business leader is about the transformation of ourselves as well as others, not necessarily our IQ score. In turn this leads to the transformation of the organisation in which we lead, which ultimately leads to the organisation achieving its stated strategic goals and objectives. This is all achieved through the process of change. Change within ourselves, change within others, and change within the organisation. However this change begins with the leader. Kotter (2001) observes that leadership is very much related to change. He goes on to say that as the pace of change accelerates, there is naturally a greater need for effective leadership to navigate this change. There is no denying that as we move further in to the 21st century the need to deal with change, both internally and externally will remain both within ourselves and within the organisations that we lead. Therefore the leaders of the future will be ordinary people with an extraordinary commitment to becoming masters of their own emotional intelligence. Having this commitment is what will make someone a better business leader in the 21st century.