There is a workplace leadership paradigm shift occurring which will change the face of business as we know it.
We are moving from the old notion of “command and control” toward a new value-based leadership and mentor-centered leadership. The impact on business is profound — personality, style, and values matter. The philosophy that embodies this shift is called many things: conscious capitalism, corporate citizenship, sustainable responsible business, and Corporate Social Responsibility.
All describe an evolving, “more complete” capitalism that holds the potential for increasing corporate performance while simultaneously improving the quality for life for billions of people. Companies can be true to their core business while focusing on the triple bottom line: people, planet and profit.
Human resources professionals are particularly interested in CSR as a recruitment and retention tool. Companies express corporate citizenship through waste and pollution reduction, contributing to educational and social programs, and earning adequate returns on the employed resources.
These types of activities are important to Gen Y, our next leadership generation. According to the Harvard Business Review, “As the economy recovers “» companies will return to the challenge of winning over enough highly capable professionals to drive renewal and growth.”
Gen Y’s say it’s important that their work makes a positive impact on the world, profess to be very ambitious, and are comfortable working with people of different ethnicity and culture. A company with CSR specifically intertwined into a its business strategy and reflected in its culture has the potential to win over a star Gen Y candidate sitting on the fence.
A growing body of research demonstrates why CSR is good for business. A new study by the Center for Work-Life Policy gives further evidence that purposefully designed corporate social responsibility programs will advance the interests of businesses as well as communities.
The Dow Jones Sustainability Group Index shows that, in general, companies that embraced CSR tended to fare better during the current economic crisis than those that have yet to incorporate CSR into their business philosophy.
The Huffington Post says one of the 5 Things Business Leaders Must Do in 2011, is “Realize that corporate responsibility and sustainability aren’t departments.”
Zappos, Whole Foods, and Google are just a few brands that have leveraged CSR to their advantage. The Applied Companies has always incorporated our core value — “do the right thing” into our company culture, including CSR, as it enhances our performance and participation in our community.
How will you model the way and succeed through values and mentoring your company’s future leaders?
Jim Annis is president/CEO of The Applied Companies, which provide HR solutions for today’s workplace. Applied’s division managers, Celeste Peterson, Angela Atchley and Tom Miller, contributed to this article.
“We hired a new CEO, but had to let him go after just seven months,” the chairman of an East Coast think tank complained to me recently. “His resume looked spectacular, he did splendidly in all the interviews. But within a week or two we were hearing pushback from the staff. They were telling us, ‘You hired a first-rate economist with zero social intelligence.’ He was pure command and control.”
The think tank’s work centers on interlocking networks of relationships with the board, staff, donors, and a wide variety of academics and policy experts. The CEO urgently needed to manage those relationships, but lacked the interpersonal skills that organizations increasingly need in their leaders. A CEO who fails to navigate those relationships artfully, the think tank’s board saw, could torpedo the organization.
Why does social intelligence emerge as the make-or-break leadership skill set? For one, leadership is the art of accomplishing goals through other people.
As I’ve written with my colleague Richard Boyatzis, technical skills and self-mastery alone allow you to be an outstanding individual contributor. But to lead, you need an additional interpersonal skill set: you’ve got to listen, communicate, persuade, collaborate.
That was brought home to me yet again reading “Making Yourself Indispensable,” by John H. Zenger, Joseph R. Folkman, and Scott E. Edinger, which makes the strong point that a leader’s competencies are synergistic. The more different competencies a leader displays at strength, the greater her business results.
But there’s another critically important rule-of-thumb: some competencies matter more than others, particularly at the higher levels of leadership. For C-level executives, for example, technical expertise matters far less than the art of influence: you can hire people with great technical skills, but then you’ve got to motivate, guide and inspire them.
While Zenger, Folkman, and Edinger make a strong empirical case that competencies matter, it overlooks a crucial point: some competencies matter more than others. Specifically, there are threshold competencies, the abilities every leader needs to some degree, and then there are distinguishing competencies, the abilities you find only in the stars.
You can be the most brilliant innovator, problem-solver or strategic thinker, but if you can’t inspire and motivate, build relationships or communicate powerfully, those talents will get you nowhere. What Zenger and colleagues call the “interpersonal skills” — and what I call social intelligence — are the secret sauce in top-performing leadership.
Lacking social intelligence, no other combination of competences is likely to get much traction. Along with whatever other strengths they may have, the must-have is social intelligence.
So how do you spot this skill set? An executive with a long track record of satisfactory hires told me how his organization assessed social intelligence in a prospect during the round of interviews, group sessions, meals, and parties that candidates there routinely went through.
“We’d watch carefully to see if she talks to everyone at the party or a dinner, not just the people who might be helpful to her,” he said. One of the social intelligence indicators: during a getting-to-know you conversation, does the candidate ask about the other person or engage in a self-centered monologue? At the same time, does she talk about herself in a natural way? At the end of the conversation, you should feel you know the person, not just the social self she tries to project.
I wouldn’t use such subjective measures alone — you’re better off to combine them with best practices on hiring without firing. But don’t ignore your gut.
When the theory of emotional intelligence at work began to receive widespread attention, we frequently heard executives say—in the same breath, mind you—“That’s incredible,” and, “Well, I’ve known that all along.” They were responding to our research that showed an incontrovertible link between an executive’s emotional maturity, exemplified by such capabilities as self-awareness and empathy, and his or her financial performance. Simply put, the research showed that “good guys”—that is, emotionally intelligent men and women—finish first.
We’ve recently compiled two years of new research that, we suspect, will elicit the same kind of reaction. People will first exclaim, “No way,” then quickly add, “But of course.” We found that of all the elements affecting bottom-line performance, the importance of the leader’s mood and its attendant behaviors are most surprising. That powerful pair set off a chain reaction: The leader’s mood and behaviors drive the moods and behaviors of everyone else. A cranky and ruthless boss creates a toxic organization filled with negative underachievers who ignore opportunities; an inspirational, inclusive leader spawns acolytes for whom any challenge is surmountable. The final link in the chain is performance: profit or loss.
Our observation about the overwhelming impact of the leader’s “emotional style,” as we call it, is not a wholesale departure from our research into emotional intelligence. It does, however, represent a deeper analysis of our earlier assertion that a leader’s emotional intelligence creates a certain culture or work environment. High levels of emotional intelligence, our research showed, create climates in which information sharing, trust, healthy risk-taking, and learning flourish. Low levels of emotional intelligence create climates rife with fear and anxiety. Because tense or terrified employees can be very productive in the short term, their organizations may post good results, but they never last.
Our investigation was designed in part to look at how emotional intelligence drives performance—in particular, at how it travels from the leader through the organization to bottom-line results. “What mechanism,” we asked, “binds the chain together?” To answer that question, we turned to the latest neurological and psychological research. We also drew on our work with business leaders, observations by our colleagues of hundreds of leaders, and Hay Group data on the leadership styles of thousands of executives. From this body of research, we discovered that emotional intelligence is carried through an organization like electricity through wires. To be more specific, the leader’s mood is quite literally contagious, spreading quickly and inexorably throughout the business.
We’ll discuss the science of mood contagion in more depth later, but first let’s turn to the key implications of our finding. If a leader’s mood and accompanying behaviors are indeed such potent drivers of business success, then a leader’s premier task—we would even say his primal task—is emotional leadership. A leader needs to make sure that not only is he regularly in an optimistic, authentic, high-energy mood, but also that, through his chosen actions, his followers feel and act that way, too. Managing for financial results, then, begins with the leader managing his inner life so that the right emotional and behavioral chain reaction occurs.
Managing one’s inner life is not easy, of course. For many of us, it’s our most difficult challenge. And accurately gauging how one’s emotions affect others can be just as difficult. We know of one CEO, for example, who was certain that everyone saw him as upbeat and reliable; his direct reports told us they found his cheerfulness strained, even fake, and his decisions erratic. (We call this common disconnect “CEO disease.”) The implication is that primal leadership demands more than putting on a game face every day. It requires an executive to determine, through reflective analysis, how his emotional leadership drives the moods and actions of the organization, and then, with equal discipline, to adjust his behavior accordingly.
That’s not to say that leaders can’t have a bad day or week: Life happens. And our research doesn’t suggest that good moods have to be high-pitched or nonstop—optimistic, sincere, and realistic will do. But there is no escaping the conclusion that a leader must first attend to the impact of his mood and behaviors before moving on to his wide panoply of other critical responsibilities. In this article, we introduce a process that executives can follow to assess how others experience their leadership, and we discuss ways to calibrate that impact. But first, we’ll look at why moods aren’t often discussed in the workplace, how the brain works to make moods contagious, and what you need to know about CEO disease.
No Way! Yes Way
When we said earlier that people will likely respond to our new finding by saying “No way,” we weren’t joking. The fact is, the emotional impact of a leader is almost never discussed in the workplace, let alone in the literature on leadership and performance. For most people, “mood” feels too personal. Even though Americans can be shockingly candid about personal matters—witness the Jerry Springer Show and its ilk—we are also the most legally bound. We can’t even ask the age of a job applicant. Thus, a conversation about an executive’s mood or the moods he creates in his employees might be construed as an invasion of privacy.