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Low EQ = High Business Acumen?

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Well I’m sure that this post will get me flamed but here’s going anyhow. Emotional intelligence is hot. It’s supposed to make you a better leader. How so? By making you more sensitive to your fellow man, it’s supposed to make your followers more engaged, more loyal to you and so on. The same with customers. In this model high engagement and high loyalty follows inexorably to higher sales and profits.

I’m thinking of several people. Steve Jobs, Leona Helmsley, Martha Stewart, Frank Sinatra. Common denominator is that they were all regarded as unpleasant people to deal with. But all of them were ultra-successful in business terms, as well as rich. Is this just a coincidence?

Let’s look at this a bit more. Try Steve Jobs for starters. Even his biographer Walter Isaacson acknowledges freely he wasn't a nice person. Not to mention the legions of people who have written about his abusive ways at work with his employees and colleagues, his business partners and competitors.

OK I guess that in one of a zillion universes you could be a tough, unfeeling abusive jerk and still have a high EQ. I don’t think we’re in that one though. So I think we could justly say that Steve Jobs wouldn’t have topped anyone’s list for high EQ.

And all of the Hall of Fame people I just mentioned above were similar, or even worse. Read Kitty Kelly’s biography of Frank Sinatra if you want to get the flavor. And I’m not even close to covering this pantheon of antiheroes. Bill Gates when younger, Elon Musk now, the list goes on.

Why would it be that someone who is this nasty can be so rich? Pretty obvious right? Utra-focused, drives through any obstacles including wussies amongst his own employees, visionary above all else, takes no prisoners.

So that’s the flip side of these people. Each of them immensely successful and of course, rich to boot. But none of them made it by being nice, or having anything remotely close to a high EQ. Each of them would appear to be the living embodiment of a rule that says that if you want to be really rich, don’t have a high EQ.

Now I’m not here to argue that if you have a low EQ you will get to be rich, or that if you have a high EQ you can’t be rich. Not that there’s not some powerful evidence of the latter. Try Ben and Jerry of their eponymous firm to look at people who were nice and messed up the business acumen part. Bill Norris of Control Data, Ken Olsen of Digital Equipment.

In fact in our own research into behavioral finance we see lots of evidence that altruistic people tend not to make money. There are powerful reasons for that. And yes I know about Mitt Romney and tithing; the argument there is that once it’s institutionalized and essentially compulsory it doesn’t count, albeit it is nice and social.

And no I’m not arguing that you shouldn’t try to have a high EQ or do things to improve it if you want to make money. Nor am I arguing that you should be nasty in order to get rich off others’ peoples’ backs. All I’m pointing out is that the fashionable EQ hypothesis doesn’t hold up in multiple really famous and important cases.

So that one of the landmark leadership theories of our time, that having higher emotional intelligence makes you a better leader, doesn’t necessarily hold up when you examine it more closely.

If that’s right, there are an awful lot of leadership books and writing that have got it wrong or at least don’t have it right. If that’s correct I’m not saying that they should suddenly recant their thesis. What I would advocate is that they still push for higher EQ but acknowledge it won’t necessarily make you a better or more successful leader at least not if you measure it by raw financial outcomes.

I would think it would make more sense to acknowledge the holes in the theory and state that getting a higher EQ is good for mankind and your colleagues albeit it might have some drawbacks that you have to guard against. Wouldn’t that make the framework more honest?

I suspect that deep down the debate about EQ has some ideological baggage that no-one wants to own up too. EQ is particularly something that you might want in your employees if you are a public company with plenty of moolah and a fairly relaxed lifestyle, corporately speaking. As a stakeholder you probably don’t care.

In fact, as a shareholder you might be deeply worried if the employees in that company you invested in care too much about anyone except your own investment. Otherwise they might help others, including your competitors and that might not be bullish for your position.

If that’s the case then, EQ is for public company officers, for employees and for the people who train them including from the HR and the EQ industries. Business acumen is for owners and stockholders, the (rapacious?) financial and business types and the wealth management industry or so it would seem.

If you like EQ does that make put you on the left of the political spectrum? If you don’t, then you’re on the right?

Could that be the reason for the eulogizing – or the demonizing - of EQ?

 

 

 

 

 

 

 

 

 

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Tuesday, 23 October 2018

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