The shifts taking place in the global economy are changing the way in which a company establishes its value proposition as a competitive differentiator. A few years back a business could bet on its “quality of product” as a sure winner. Such strategies no longer suffice, and will relegate the business to the abyss of redundancy, as they are surpassed by companies who embrace the values of the emerging economy.
Companies that understand the changes required are positioning themselves in relation to what Daniel H. Pink terms the conceptual economy. Others call it the emotional or connection economy. Regardless, the game is changing, and strategies of old won’t work. Tomorrow’s economy is about connecting. Conquering your industry will be a matter of connecting with your customers, suppliers, employees, families of employees and with the communities your organisation finds itself operating within.
Daniel Goleman, a pioneer in the field of Emotional Intelligence (EI), has said that “… people everywhere are struggling with the same problems and human issues … that the ratcheting up of global competitiveness and the resulting demands for adaptability, for managing stress, for teamwork and for collaboration, are escalating.”
As the world is becoming smaller through technological advancement and globalisation, there is a paradox emerging. As we get “closer”, we seem to be drifting further apart. There are disconnects between customers and companies as never seen before.
Informed by emotional tags
Globally people are crying out for intimacy and depth to relationships within all spheres of life, including those of purchasing and employment decisions. These are all decisions that are made with some level of rational thinking, but for the most part are informed by emotional tags.
A few years back, customers bought from you because they believed you had cutting edge products because of a massive R & D budget. Or they were sure you invested capital into production processes that sped up availability and quality.
But today, it’s a different world. Every competitor has just as much R & D clout, as well as cutting edge production technology as the next company. The only differentiator is people; the “softer” side of business. Emotions, complexity, families and desires. This is the age of connection. But what does it mean to “connect”? Does it require something of us that we can learn, or do we need to dig deeper into our DNA to find a natural ability?
The answer lies in looking again at a human trait that has received much attention of late, but has been glossed over as companies establish their strategies. It is EI. Success in the connection economy will depend on the extent to which individuals, teams and organisations harness, develop and utilise their inherent Emotional Quotient (EQ).
Nancy Gibbs is quoted as saying that for most of this century, scientists have worshipped the hardware of the brain and the software of the mind, while the messy powers of the heart were left to the poets. It is now time that this changed.
Goleman describes EQ in terms of emotional “domains”: self-awareness, self-regulation, motivation, empathy and social skills. Successfully developing each of these areas provides opportunity for the “catalytic interaction” that occurs when people connection happens. It is when this happens that you know you have found an exceptional person. It is also possible for whole organisations to tap into this magic.
Leading the charge
Again, if we are to look at the leading companies in our new economy, we can see they have embraced a paradigm shift in how employees and people relations are valued. As employees prepared for the world of work 10 years ago, they based their individual competitive advantage on skills-based competencies. Their “products” were formal qualifications and skills-sets. Today however, while these competencies are important, companies need employees whose competencies extend beyond formal qualifications.
So, on one hand it will be a company’s ability to attract, retain and develop the best talent that will keep them ahead of their competitors. But these “talented” people will need to possess levels of EQ that allow them to connect with your value-chain, and your company requires an ability to in turn, connect with them.
Brand your corporate EI
This is a crucial step in becoming a connection economy company – filling your ranks with employees who understand the connections that need to be made and how to make them. But to attract these employees, companies need to brand their EI as an organisation. Organisations need to become emotionally intelligent. Cultivating this form of intelligence will create long-term relationships that keep customers. Pleasing customers is no longer just about getting the job done, but getting it done with a personal connection.
Goleman argues that EQ matters twice as much as Intellectual Intelligence (IQ) or technical expertise when it comes to distinguishing “star performers” from the merely average employee. In finding an employee who has all five EQ domains mastered you would have found a truly talented employee, someone who can assist your organisation in developing its collective EQ.
Another crucial step in developing organisational EQ, is to ensure that leadership structures understand, exhibit and exude high levels of EQ. Goleman found that in organisations he studied, 85% to 90% of success could be attributed to high levels of EQ in leaders.
It is believed that EQ can be learned. Unlike IQ, it tends to increase in every decade of life. This is a wonderful hope for employees who have zero EQ, but it is a false hope for companies. The rate of change in the emerging economy will not afford you the time to wait for your high IQ employees to develop sufficient levels of EQ. Companies need to be recruiting young talent with high EQ levels.
Employer of choice
The emotionally intelligent organisation is one with a high number of emotionally intelligent leaders, managers and talent. Not only will this organisation be an employer of choice to our world’s brightest talent, but this organisation chooses to be at the forefront of corporate practice and performance.
Nancy Gibbs tells us that emotional skills, like intellectual ones, are morally neutral, adding: “Just as a genius could use his intellect either to cure cancer or engineer a deadly virus, someone with great empathic insight could use it to inspire colleagues or exploit them.” So, the EQ strategy needs to be balanced by a value proposition that “does no evil”.
Moral compass
Fortune magazine, in their 2006 study of top American companies to work for, found that the best talent and richest revenues were drawn to companies with a “cause” to live for. This cause will be a “moral compass” thus creating a gravitation point that talent and customers cannot resist.
Positioning your organisation as emotionally intelligent is not a task best left up to the HR department. For too long, HR practitioners have been on the look out for skills and IQ as indicators of great talent.
Instead, companies need to align their recruitment strategies with the relevance of EQ. They need to reinvent their organisations around the role of connections with employees and customers. They need to begin to feel.
Aiden Choles is a Connection Economist at TomorrowToday.biz (www.tomorrowtoday.biz).
Source: HR Future Magazine
