What is the financial impact of Emotional Intelligence in organizations?

Yes, Yes, Emotional Intelligence (EI) is important... but:

?? What is the financial impact ?

?? Does it only matter for senior leaders ?

?? How to answer convincingly?

I am asked these questions since I discovered Daniel Goleman work back in 2008.

It's time to address them head on, the question i pose myself is: what is the best way?

Let' use quantified research ??

Here are some examples of financial impact

(for more details, please check the references section below)

Across organizations and functions?

Managers often fail to appreciate how profoundly the organizational climate can influence financial results. It can account for nearly 33% of the financial performance (Goleman, 2000).

Consulting firms?

Comparing senior partners in a consulting firm, the ones that scored above the median in the EI competencies delivered +$1,2million more profit than the others, 140% incremental gain (Boyatzis, 1999)

President Functions?

In a large beverage firm, the turnover (caused by not achieving targets) of Presidents selected using EI after two years is 6% compared with 50% of #Presidents selected by standards methods (McClelland 1999).

Division Leaders?

In a large beverage firm, the division leaders with high EI scores outperformed their targets by 15%-20%. Those with not high EI scores under-performed by 20% (McClelland 1999).

HR functions?

Using EI based selection methods to select Recruiters, the US Airforce saved $3 million per year. This conclusion has lead to a recommendation of this method to be used in all branches of the armed forces by the Government Accounting Office the Congress back in 1998.

Conclusion:

Q1 - "Emotional Intelligence (EI) important, but what is the financial impact?"

??Research has proven that people with high Emotional Intelligence scores have a significant financial impact on organizations.

Q2 - "Does it only matter for very high senior leaders?"

No, high Emotional Intelligence people outperform others in:

?? Many levels of seniority: from Presidents to Division Directors and mid-level leaders.

?? Many functions: from Sales to HR functions.

?? Many types of organizations

Final question:

Can we replace the word "many" with "all"?

Let me know your thoughts in the comments below.

References:

Boyatzis, R. E. (1999). From a presentation to the Linkage Conference on Emotional,?Intelligence, Chicago, IL, September 27, 1999

Chermiss C. (1999). The Business Case for Emotional Intelligence.

Goleman, D. (2000). Leadership that gets Results. Harvard Business Review

GAO (1998). MILITARY RECRUITING: DOD Could Improve Its Recruiter Selection and Incentive Systems. NSIAD-98-58. retrieved from https://www.gao.gov/products/NSIAD-98-58

McClelland, D. C. (1999). Identifying competencies with behavioral-event interviews.?Psychological Science, 9(5), 331-339.

Note: Original post June 2018, edited for visual uplift June 2024.