Leadership and EI, The Keys to Driving ROI and Organizational Performance

Leadership and
Emotional Intelligence:

The Keys to Driving ROI and
Organizational Performance

Executive Summary

Emotional Intelligence, popularly referred to as EI or Emotional Quotient (EQ), has become a prolific topic within corporate leadership development. This original research by the Human Capital Institute (HCI) and Multi-Health Systems (MHS) uses insights from organizational leaders surveyed in the spring of 2013 to address the usefulness and application of Emotional Intelligence as a factor in developing leaders, shaping organizational culture, and ultimately impacting an organization’s financial performance.

The corporate world has long recognized that the greatest and most effective leaders offer more than traditional intelligence. Indeed, countless “smart” leaders have fallen from grace in recent years, during a time when maintaining composure and keeping emotional reactions in check has never been more publicized. When it comes to building strong leaders, organizations are now turning to the concept of Emotional Intelligence to help give leaders a new type of intelligence edge above and beyond technical aptitudes.

We argue that Emotional Intelligence is more than an amorphous concept related to “playing well with others.” It is made up of a specific set of observable and measurable emotional and social skills that impact the way people perceive and express themselves, develop and maintain social relationships, cope with challenges, and use emotional information in an effective and meaningful way. In fact, the process/mechanism by which EI impacts an organization and its bottom line is through its role in creating a high-performance culture. As Roger Pearman, Founder and CEO of Leadership Performance Systems, said, “What builds great and sustainable
organizations are leaders with a high degree of business acumen—specific skills, planning and control—and Emotional Intelligence—methods to keep people motivated and engaged. Leaders who have a sensitivity to relationships and do a good job of building relationships have something beyond business skills that help organizations succeed. They have highly developed, emotionally-intelligent behaviors.”


Emotional Intelligence Competencies

Copyright © 2011 Multi-Health Systems Inc. All rights reserved.
Based on the original BarOn EQ-i authored by Reuven Bar-On, copyright 1997.

In this report, we examine the state of Leadership Development in general, concluding that improvements are sorely desired by senior leaders. The leadership competencies identified as most important by managers and individual contributors within the organization are examined, and the current applications of Emotional Intelligence are explored. Finally, we hypothesize—and, indeed, find—that organizational development practices that utilize Emotional Intelligence result in measurable achievement, success in leadership development, and—ultimately—enhanced financial performance. Specifically, these strides in leadership development produce a high-performance culture that, along with other best practices from diverse disciplines in an organization, positively impact financial performance. We conclude with specific ways in which HR leaders can most effectively integrate Emotional Intelligence as part of a robust leadership development program. Most notably, these include increased emphasis on measuring Emotional Intelligence through assessments, and efficiently using that information to inform leadership training and skills-development.