by Gael O’Brien

Recent leadership failures in several high profile companies draw increased attention to the reality that achieving goals – performance – is only part of the formula for success. Another critical piece is the way leaders do it which impacts others – relationships.  Leaders who are low in self-awareness, self-regulation, motivation, empathy and social skills lack something called “emotional intelligence” (EQ), a behavior model popularized by the work of Daniel Goleman.

Leadership_Businessman in Auditorium_FeatureRather than being one of the many leadership fads that shed fleeting light on how those in power can be more successful, EQ is an enduring mirror that reflects back who a leader is and how he or she behaves, defining “tone at the top” more compellingly than any words on email, paper or video.

EQ also has a direct bearing on corporate reputation, something that boards of directors have watched impact stock price, media coverage, public opinion and a leader’s viability. Consider how public sentiment turned more negative against BP after former CEO Tony Hayward made the comment, “I want my life back,” and later watched his yacht race while gushing oil was destroying the livelihoods of Gulf residents.

Recently, retired Coast Guard Adm. Thad Allen gave BP credit for doing about as well as any company could have in stopping the oil flow, but Allen, in charge of overseeing the government and industry response to the Gulf spill, gave BP low marks for how it dealt with the people and communities affected. If leaders don’t feel or know how to genuinely express empathy, it makes it that much harder for them to be trusted or supported.

Ethical Failures

Korn Ferry’s Robert Hallagan, Vice Chair and Managing Director, Board Leadership Services, says the percentage of cases where EQ derails a CEO is higher than what we read about in the media, but still a small percentage of the total population of CEOs. “However, because of the press around it,” Hallagan says, “boards are becoming more sensitive to EQ.” Korn Ferry uses various assessment tools to assess EQ and other leadership competencies in the searches they do.

“Leaders’ lack of emotional intelligence can lead to ethical failures if they believe they will never get caught and feel smart enough to worm their way out of it,” says Keith Darcy, Executive Director of the Ethics and Compliance Officer Association. “Arrogance distorts a leader’s capacity to read accurately situations. They can reach a position of power and sometimes develop contempt for ‘the small people’ as BP Chairman Carl-Henric Svanberg was quoted describing the Gulf residents.”

In a recent Wall Street Journal article, Jonah Lehrer talks about the contradiction of power, essentially how nice people can change by having authority. To the point on vulnerability to ethical lapses, Lehrer says that “people in power tend to reliably overestimate their moral virtue, which leads them to stifle oversight. They lobby against regulators, and fill corporate boards with their friends. The end result is sometimes power at its most dangerous.”

Lehrer points out that company surveys are a good barometer of what is happening in the culture of the organization, and surveys provide evidence that the vast majority of rude and inappropriate behavior comes from the offices of those with the most authority.

One of the fallouts from former HP CEO Mark Hurd’s ouster seems to bear witness to this. Immediately after his resignation was announced, past and current HP employees began commenting on blogs about Hurd’s arrogance, rudeness, and treatment of people he disagreed with in meetings. He had the lowest employee approval rating (34 percent) of major tech industry CEOs.  Granted, few CEOs who are credited with significant cost-cutting and layoffs win popularity contests, but a healthy amount of EQ can mitigate the impact of difficult decisions.

Importance of Soft Skills

Recent publicized leadership failures do invite thinking about what it takes to be a good boss, a theme in an article in the most recent McKinsey Quarterly.  Self-awareness wins as probably the most important skill good bosses must have because, aware of their flaws, these bosses work not only to overcome them and reverse the resulting damage, but involve others to help compensate for whatever their own weaknesses might be – and the organization is stronger as a result.

In the rush to find what works, what will create leadership success, something has been staring us in the face, not often acknowledged. Executive coach Jordan Goldrich, who works with the Center for Creative Leadership, points out that “increasingly, research is showing that what we used to think of as the soft skills (building and mending relationships, communication, and humility etc.) are completely connected to the business results.”

A recent story about incoming General Motors’ CEO Daniel Akerson used the headline “Brash, Blunt, Demanding.” Recognized for his discerning questions and for holding others accountable, a style that gained him respect on Wall Street in his role as a GM board member, Akerson will take over on September 1 as CEO. Tagged with a style of being brash, blunt and using colorful language, he will have a chance to demonstrate if soft skills are also important to the success of the new GM.

“It’s interesting (that) leaders lacking EQ see no higher purpose generally than themselves, hearing nothing more than the sound of their own voice, and can’t see beyond quarterly results,” says ECOA’s Darcy. “Those with a well developed sense of self are capable of hearing the deep moaning in the world. They realize everything that we do gets done with, by, for, and through people. They understand that the well being of people translates into a well functioning organization.”

Gael OBrienGael O’Brien is a Business Ethics Magazine columnist. Gael is a thought leader on building leadership, trust, and reputation and writes The Week in Ethics.

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