Research has identified that all effective and successful leaders share certain common characteristics: They all have a high degree of emotional awareness. And, while it is true that intellect and technical skills are important elements as well, research has confirmed that emotional stability and emotional awareness, known as "emotional intelligence" are most effective to create successful and long-lived organizations where a culture of trust and honest strategic communication thrive. The opposite is true as well. A person with amazing training and extensive experience may fail as a leader if they are not able to build trust with employees through establishing authentic relationships, which rely on the leader's ability to actively listen to employees.
There are five components of emotional intelligence include:
Self-Awareness - the ability to recognize and understand your moods, emotions, and drives, as well as their effect on others
Self-Regulation - the ability to control or redirect disruptive impulses and moods: the propensity to suspend judgment - to think before acting
Motivation - a passion to work for reasons that go beyond money or status: a propensity to pursue goals with energy and persistence
Empathy - the ability to understand the emotional makeup of other people: skill in treating people according to their emotional reactions
Social Skill - proficiency in managing relationships and building networks: an ability to find common ground and build rapport
Emotional intelligence not only distinguishes outstanding leaders but can also be linked to strong performance. A well-known research study in 1996 by David McClelland made several significant observations about a leader's emotional awareness. His team discovered that divisions of a multi-national company where the leader had a high degree of emotional awareness significantly outperformed other divisions. They also identified that divisions with leaders who possessed a low degree of emotional awareness performed significantly less well than divisions led by leaders with simply nominal emotional intelligence. The spread in divisional performance between leaders with high and low emotional stability was staggering.
This raises the question, how is emotional intelligence developed and why do some managers possess it and others don't? And while the debate rages about if leaders are born or created, it is true that some people innately possess a high degree of empathy, yet, it is possible to learn empathy and develop the skill to actively listen and authentically engage with others. These last two points are some of the essential ingredients that lead to effective leadership through emotional intelligence: active listening and authentic engagement.
Research also concluded that these components of emotional intelligence, active listening, and authentic engagement increase over time as maturity surfaces. This is why federal judges are over 40 years old and frequently older. It's not just knowledge of the law, his life experiences to identify balance in decision making. In some cases, despite reaching maturity, emotional intelligence may still be elusive as a lack of empathy percolates from the core DNA.
The last point is related to neuroscience. A leader's ability to express empathy must be developed by re-training the brain's limbic system to break the old communication habits. Learning not to yell at the staff or interrupt the staff while they are speaking is not easily transitioned. In fact, individuals with a high degree of sales-related fortitude tend to have a low degree of empathy and struggle to make the transition to become an effective leader or CEO. It is helpful to have a low degree of empathy when faced with repeated rejection during the sales cycle, yet, developing empathy as part of emotional intelligence is an essential component of effective leadership to create an authentic and trusted relationship with employees.
Some of the information above was sourced from Daniel Goleman's 1998 article What Makes a Leader published in the Harvard Business Review.
Dr. Schell and the MBS Financial Services team help firms implement an authentic leadership style.
MBS Financial Services supports the following areas:
Growth Strategy – We can help you plan and execute a growth strategy.
Hedging & Pipeline Risk Management - Dr. Schell can help explain how hedging functions, the benefits of hedging, and the risks associated with the activity. See blog posts.
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About Dr. Schell:
Dr. Andy Schell, Ph.D., DBA, MSML, MBA, CPA/CFF, CMB
Dr. Schell is CEO, Managing Partner, and Co-Founder of Mortgage Banking Solutions and the Founder of MBS Financial Services ("MBS"), based in Austin, Texas. Dr. Schell is known for his ability to turn "vision into reality" and "chaos into order" as he finds creative solutions to the challenges his clients face addressing Revenue Stability, Technology Enhancement, Financial Management, and Workflow Efficiency.
He has 4 decades of experience as a strategist where he has directed the activity of both small and large groups of employees including mortgage lending activity at Bank of America. His leadership knowledge extends from his hands-on experience and his professional designations as a CPA and a CMB, and from his doctoral examination of employee dynamics given leader stimulus and strategic communication.
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