The Reality of Emotional Intelligence

"A leader's intelligence has to have a strong emotional component. He has to have high levels of self-awareness, maturity, and self-control. She must be able to withstand heat, handle setbacks and when those lucky moments arise, enjoy success with equal parts joy and humility. No doubt emotional intelligence is more rare than book smarts, but my experience says that it is actually more important in the making of a leader. You just can't ignore it."

- Jack Welch, Former Chairman of General Electric

emotional-intelligenceEmotional Intelligence (EI), the ability to understand and navigate emotions to guide thinking and behavior, first materialized as the missing link in an unconventional discovery:People with average IQs outperform those with significantly higher IQs 70% of the time.As IQ has long been understood to be a key driver of job performance, this finding has confused the masses for years.Not Daniel Goleman.In 1995, psychologist and twelve-year New York Times writer Daniel Goleman published an international best-seller: "Emotional Intelligence". Business would never be the same."Most gratifying for me has been how ardently the concept has been embraced by educators, in the form of programs in 'social and emotional learning' or SEL. Back in 1995, I was able to find only a handful of such programs teaching emotional intelligence skills to children. Now, a decade later, tens of thousands of schools worldwide offer children SEL." - Daniel GolemanActually, the term was first coined in 1990 by Dr. Peter Salovey and John Mayer, who identified five components of emotional intelligence: self-awareness, empathy, self-management (of one's feelings), self-motivation, and ability to handle relationships.And in 2009, a renowned study by Travis Bradberry and Jean Greaves determined the following:

  • EI accounts for 58% performance in all jobs and is the single biggest predictor in the workplace.
  • That being said, only 36% of people are able to accurately identify their emotions as they happen.
  • EI is the strongest driver of leadership and "personal excellence".
  • EI appears to increase steadily with age.

I have said it before and I will say it again: The key to success in business is evoking the desired emotional response.

Could heightened emotional intelligence equate to higher acceptance of corporate sustainability? My money's on "yes".Neoclassical economics assumes that individuals rationally process information. Behavioral finance counters: people are highly irrational, they rewrite history, they justify, they overweight certain factors, they resist change, they frame within biases. Behavioral finance suggests that individuals, even when faced with the notion that a corporation's practices are against their moral beliefs, will block out negative factors. Emotional intelligence combats logical fallacies. In other words, emotional intelligence combats irrational decision-making.Can emotional intelligence actually be heightened?Yes. Worldwide, companies are not only seeking EI in employees, but also engaging in corporate practices (360 reviews, mandatory workshops, team activities) to strengthen this valued skill.If a company can augment the EI of its employees, it seems reasonable to conclude that a company could also increase the EI of its consumer and investors.The companies examined by TheSustainableInvestor are attempting to do just this. A review of the efforts of Patagonia, CVS Health, Warby Parker, Apple, Google, Tesla Motors, etc. portrays the following: those that are most successful in attaining simultaneous sustainability and profitability are heightening their consumers' emotional intelligence. Warby Parker uses visualization in its Buy a Pair Give A Pair initiative, enabling the consumer to donate eyewear to an almost-identifiable individual. Warby Parker astutely seeks to elicit an emotional connection, rather than struggling to play to the "rational" mind. Tesla attaches to its owners with the "Tesla Motors Club". Similarly, CVS Health engages with consumer emotion, "Your health is our number one priority".The success follows.The average person has approximately 50,000 thoughts per day (Bradberry & Greaves, 2009).Now, if only 10,000 or so of those thoughts could be focused on investing and consuming in sustainable companies, the world might look a little brighter.