What one thing can take center stage at TED Talks, be hyped as a self-improvement tool in several recent books and get analyzed by conflicting studies (researchers think it either drives burnout or improves job satisfaction — go figure)? The answer is emotional intelligence (EI) — and there’s a high risk it’s misunderstood. 

To simplify things and keep the focus on business leadership and executive search, it’s probably less important to answer the question “What is EI?” than “What actions, competencies or behaviors does it describe?” To that end, foundational work in the field by Daniel Goleman, Ph.D., lays out four areas where high-EI leaders outperform the rest:  

  • self-awareness
  • self-management
  • relationship management
  • social awareness

How do proficiencies like these drive outcomes generally, and why are they particularly valuable in connection with executive search? Check out the following two real-world scenarios to find out.

1. putting the “EI” in DEI&A

It often makes headlines — or at least a brief PRNewswire press release — when exceptional people from under-represented backgrounds advance to executive leadership roles at large companies, and with good reason. After all, only around one in 10 CFOs qualify as racially or ethnically diverse, and only slightly more are women (which is still better than the statistics for the rest of the C-suite).  

Of course, as the corresponding PRNewswire piece will be at pains to stress, the company’s big announcement is only one small piece of a much larger puzzle — that is, the enterprise’s diversity, equity, inclusion and accessibility (DEI&A) strategy — rather than the whole story itself. And it’s in this arena, specifically, the EI not only comes into play but most directly impacts outcomes, as the following recent findings strongly suggest. 

  • In one survey of 500-plus hiring managers, EI was identified as the number-one most important predictor of success for leaders overseeing teams during periods of change. Needless to say, it would be hard to envision a meaningful DEI&A initiative in which change does not take center stage. 
  • Equally relevant, although taken from the context of education, is new evidence that EI can be a key marker of what researchers call “intercultural competence,” which impacts  how information gets disseminated and applied, especially in group settings. To the extent that implementing DEI&A initiatives in an organizational context requires building consensus and securing buy-in across multiple stakeholders, functions and teams, success boils down to pretty much the same. 

Finally, there’s also the business case to consider: Diverse companies are 70 percent more likely to capture new markets than their less-diverse peers, for example, and their level of competitive advantage gets multiplied as diversity seeps across the organization. The fact that companies with diverse teams at the management level see 19 percent higher revenue on average is a case in point.

With all of that in mind, it’s easy to see why executive search firms right now are often being asked for EI-filtered shortlists. 

2. parachuting in for value-creation has unique perils 

If you’ve worked in private equity (PE), or even just been adjacent to a deal involving a PE portfolio company, then you know what a high-stakes, under-the-gun environment it can be. But put yourself in a senior finance leader’s shoes, for example: You have a backlog of maturing investments, tough calls to make and a board needling you about swings in performance. Small wonder, then, that when banks, venture capital and public markets all went into a tailspin this year, Pitchbook would simply call it PE’s “stress test.” The phrase speaks volumes. 

So who’s going to parachute into such an environment and succeed as, say, an interim CFO? 

For starters, someone who can handle disagreements or conflicts, strategically push in the right direction (without being overbearing) and compromise when necessary (without seeming like a pushover). Which is to say: Someone who excels in all of the areas touched on in the intro — self-awareness, self-management, relationship management and social awareness. After all, consensus-building is above all a cross-functional relationship management challenge, and those traits translate to an exceptional relationship management skill set. 

Finally, there’s also the fact that research backs this up. According to a recent study of the relationship between emotional intelligence and financial decision-making in the Journal of Corporate Accounting & Finance: 

  • “[The] intersection of emotional intelligence and financial decision-making is very crucial for proper financial decision-making processes.” 
  • “[People who have both] analytical and emotional intelligence should be recruited.” 

And there you have it, the new EI mandate for executive search firms in a nutshell. 

key takeaways

While EI is an integral piece of what makes a great leader, the unique pressures, goals and timelines commonly associated with interim leadership roles give it an additional premium in executive search. By building fine-tuned EI filters into our shortlisting process, and delivering top-notch candidates on timelines that inhouse HR teams can’t match, Tatum is positioned to deliver best-in-class candidates for virtually any leadership role, from CEOs to CFOs, finance VPs, CAOs, controllers and more. 

For experienced interim executives who are prepared to break through barriers and solve your most complex business challenges, start a conversation with Tatum today.