The Guide to Emotional Intelligence for Leadership Teams

By: Leadership Dynamics team

09/12/2022

6mins

This article on emotional intelligence is part of our series on leadership qualities

Studies show that a high degree of emotional intelligence is linked to better outcomes at work. But the reality is not so simple.

At Leadership Dynamics, we look at the behaviours of individuals and the balance of behaviours that make an effective team, particularly for private equity investments that need to align with a value creation plan.

Our work has uncovered that the impact of emotional intelligence is far more nuanced than a simple case of more-equals-better. The varying dynamics of teams across entire companies demand a closer look, and in some cases, too much emotional intelligence can actually be bad for performance.

This guide will help you understand when, where and how much emotional intelligence is best for your leadership teams.

What is emotional intelligence?

The accepted definition of emotional intelligence is the ability to perceive and control one's own emotions, and recognise the emotions of others.

The measure of emotional intelligence in psychology is EQ (or emotional quotient), and it is generally accepted that, on average, a high EQ leads to better job satisfaction and performance.

Some classic emotional intelligence examples for leaders at work include:

Listening to coworkers in meetings
Showing understanding and empathy during difficult times
Encouraging staff to speak their minds
The ability to receive criticism and try to benefit from it
To forgive and forget the transgressions of others

Emotional intelligence in the workplace

The value of emotional intelligence in a workplace environment is not simply a case of more is better. The reality is more nuanced, and it comes down to the balance and diversity of your teams. In what dynamics is emotional intelligence help, and where is it a hindrance?

To uncover exactly what “emotional intelligence” can do for a person and a team, we have looked at what behaviours reflect a high or low level of EQ. The behaviours that our PACE framework assesses fall under pragmatism, agility, curiosity and execution with multiple sub-behaviours that build a rich profile of what individuals are likely to do in any given situation.

For example, those with high agility are most likely to have a growth mindset as they are constantly looking to learn and change in order to be more successful. They are more likely to have enough emotional intelligence to take on criticism and learn from it.

One of the traits that amplifies all of these behaviours is what we call “self-monitoring”. People with high self-monitoring are very good at noticing social cues and are able to mimic the behavioural, and cultural norms around them. They are excellent networkers, and good at sales because they very comfortably adapt their style according to their environment.

Those with low self-monitoring (i.e. low emotional intelligence) do not seek to change their behaviours to suit the environment; they are consistently themselves no matter who they are around.

The interaction between these two types of people is interesting. When you have a team mixed with low and high self-monitoring people, those with high self-monitoring and positive behaviours will adapt themselves to mimic those with low self-monitoring and negative behaviours. In this case, their emotional intelligence has been a weakness and made it easier to cause dysfunction in the team.

Simply put, if you have a good level of emotional intelligence, but you are operating within a negative culture you will lack the ability to change it and are more likely to take on the same behaviours.

That’s not to say that emotional intelligence is not important. It is the oil that greases the mechanism of a productive team, and without it in your culture, nothing would get done. On the other hand, it is susceptible to enabling the negative behaviours of others. For example, what we call the “dark triad”: psychopathy, narcissism and machiavellianism.

So, what is going to drive positive interactions and dynamics that yield high-performing and effective teams?

What we’ve found is that you need to have strong behavioural and cultural norms in place before emotional intelligence can be a driver of success. It is neither positive nor negative, it is simply an enabler for the culture that already exists.

Emotional intelligence in leadership

What does emotional intelligence mean for organisations building an elite leadership team?

The instinctive answer is not always the correct one. Private equity-backed companies are not trying to create the most harmonious environment; they are trying to create the most productive environment.

Our research shows that the conventional wisdom – that harmony in a team produces better results – is not entirely true. It certainly produces a more pleasant environment for team members, but if the goal is to build the most high-performing team possible so you can achieve the targets of an ambitious value creation plan, then harmony can in fact be counterproductive.

A danger of group-think

Group-think is a result of non-diverse teams. It can be catastrophic because it fosters complacency. It was proven in 1942 when Pearl Harbour officers ignored warnings of an impending attack. And in 1973 when the Challenger Space Shuttle blew up after take-off, when officials ignored safety warnings.

In the business world, it is especially damaging for leadership teams who have the most impact on financial performance. It leads to bad decisions due to:

A lack of diverse thinking
Ignoring opposition
A lack of creativity
A limited desire to explore alternatives

A healthy amount of tension in a team is a good thing. A high-performing team needs enough diversity of behaviour, with varying degrees of emotional intelligence. There is a sweet spot that leads to the best outcomes, and finding it is where people analytics technology comes in.

Assessing behaviours over personality traits

When assessing a person’s suitability for a leadership role, it’s traditional to look at their competencies, skills, expertise and experience within the market. Knowing how they will perform to a specific value creation plan (VCP) is the piece that is missing.

Most people's analytics tools fail to find that piece. They rely on traditional psychometrics that looks at a personality perspective, but they do not give insight into how the leader will affect the value creation plan outcome.

By focussing on behaviours rather than personality, leadership teams can find that sweet spot in the balance of behaviours and emotional intelligence. Behaviour assessment tools such as PACE predict what individuals are likely to do, given a specific VCP and market environment.

Insights-led leadership analytics gives investors and portfolio companies the information they need to hire and promote the right people to leadership roles.

Improving emotional intelligence in the workplace

A mistake people often make is to assume that someone’s behaviours can be developed to suit the needs of the team. However, in our experience people have a “default setting” that is very difficult to change.

It is especially salient with hybrid/remote working. Even after the pandemic, employees have displayed a range of desires for remote, hybrid and office-based working, while large brands like John Lewis have trialled a four-day working week.

Without the constant of the traditional office, many people have lost the context of a company’s culture and must be trusted to be left to their own devices. In this case, people revert to their default setting, so it is critical that their natural behaviours align with the goals of the company, and the value creation plan.

So, the answer to improving emotional intelligence in the workplace is not training and development. You must hire the behaviours you want.

When you have pressurised timelines and performance targets, as in private equity, you need to hire people with pre-formed behaviours conducive to improving a team’s EQ, rather than spending precious time and resource on imposing behaviours. Because as soon as you stop imposing those behaviours, people will naturally revert to type.

When searching for candidates, identify the gaps within your current team first. Look at the functional balance for skills and experience, and then assess the behavioural complementarity.

When looking within a company for high-potential employees, it’s best to take an outside-in approach to psychological evaluation, where no one knows the purpose of the assessments, in order to get the most accurate results. This avoids stoking nervousness that has built in the market from mass layoffs.

When you know where the gaps are, you can model the impact of the change using your people analytics tools before it’s taken. This helps validate and test your thinking as well as prevent costly mistakes in the future. Once you’ve hired the right person, we recommend regularly assessing your leadership team, at least once a year, in order to ensure leadership sustainability.

The more sustainable your team is, the more efficient it will be and the more likely your company will be to succeed according to the value creation plan.

The Guide to Emotional Intelligence for Leadership Teams