Could Emotional Intelligence Be More Valuable Than An MBA?

It is very clear to me that organisations wanting to compete effectively in today’s marketplace need to attract, train and retain the most emotionally intelligent workforce possible.

Research among Fortune 500 companies, conducted by Stanford University, showed that 90% of those who failed as leaders did so because they lacked the interpersonal skills that are a critical component of emotional intelligence (EQ).

To go to the next level in business it is imperative that we create a cultural blend of technical intellect and the invaluable competencies of social and emotional intelligence. It is primarily EQ that will solve our talent retention and engagement problems, improve our mental health issues by reducing stress and conflict. Emotionally Intelligent workplaces are more creative and solve problems faster. They take better care of their customers and inspire people to bring their best game every day.

Countless studies across a wide range of industries show those who had a high EQ outperformed those who did not. Here are a few examples:

• Partners in a multi-national consulting firm were assessed on their EQ competencies. Those who scored above the median on 9 or more of the 20 competencies delivered $1.2 million more profit from their accounts than their other partners, a 139 % incremental gain.
• In a large national insurance company, agents who were weak in emotional intelligence competencies such as self-confidence, initiative and empathy sold policies with an average premium of $54,000. Those who were strong in at least 5 of 8 key emotional competencies sold policies worth $114,000.
• A large beverage firm started assessing EQ when selecting new executives and their attrition dropped 44%. They also found that division leaders with a high EQ outperformed their targets by 15 to 20% while those who lacked EQ missed the mark by almost 20%.

How long employees choose to stay at a company and how much they produce while they are there is usually determined by the relationship they have with their immediate supervisor. People with “good” bosses (defined as having high EQ) are four times less likely to leave than those with “poor” bosses.

In a survey conducted by Career One in Australia, 38% rated their boss as “horrible” and over 50% claimed to have been bullied by their manager.

So what is this magic elixir known as emotional intelligence?

It is the ability to be aware of your own emotions, and the emotions of others, in the moment and to use that information to manage yourself and manage your relationships.

There are 4 main areas we need to develop in ourselves and our organisations.

1. Self Awareness
2. Self Management
3. Social Awareness
4. Relationship Management

Within these areas we find 26 competencies that can be learned and developed such as Behavioural Self Control, Empathy, Situational Awareness, Stress Management, Communication, Building Trust and Resilience.

Warren Bennis in his book “On Becoming a Leader” says “Emotional Intelligence is much more powerful than IQ in determining who emerges as a leader. IQ is a threshold competence. You need it but it doesn’t make you a star. Emotional Intelligence can”.

Now I am in no way devaluing an MBA. It teaches the essential skills required to manage and grow a business. I do believe however that EQ is far more valuable.

What are your thoughts?

Cheers Grant