The Value Of Emotional Intelligence
The following article appeared in CFO Intelligence in the Spring/Summer 2024 issue, written by A.J. O’Connor Associates President Shannon O’Connor Bock. Read the original article here.
The Value Of Emotional Intelligence
In the dynamic world of finance, numbers reign supreme, and the stewards of an organization’s fiscal well-being are the Chief Financial Officers. CFOs are known for their analytical prowess, their ability to navigate complex financial landscapes, and their strategic approach to complex problem-solving and planning. Yet, amidst the sea of balance sheets, there exists an often-overlooked leadership characteristic that can profoundly impact the bottom line: Emotional Intelligence.
Defining Emotional Intelligence
Emotional Intelligence (EI, or EQ, Emotional Quotient) is the ability to understand and manage your emotions, as well as recognize and influence the emotions of those around you. While it may sound like a topic that belongs to the realm of human resources, EI is, in fact, a crucial asset and talent differentiator in finance. Dismissing its importance could be a costly oversight.
There are four core components of EI; let us have a closer look at each of them:
• Self-awareness: Self-awareness is at the core of EI. The ability to understand one’s emotions, strengths, weaknesses, and how they impact decision-making has a profound impact on relationships and performance.
• Self-management: Self-management is the ability to manage your emotions, particularly in stressful situations, and maintain a positive outlook despite setbacks. Leaders who lack self-management tend to react and have a harder time keeping their impulses in check. This can lead to tension in the workplace and a breakdown in trust and collaboration.
• Social awareness: Social awareness describes your ability to recognize others’ emotions and the dynamics in play within your organization. Leaders who excel in social awareness practice empathy. Global leadership development firm DDI ranks empathy as the number one leadership skill, reporting that leaders who master empathy perform more than 40 percent higher in coaching, engaging others, and decision-making.
• Relationship management: Relationship management is your ability to influence, coach, and mentor others, and resolve conflict effectively and respectfully. In a survey conducted by the Society for Human Resource Management, 72 percent of employees ranked respectful treatment of all employees at all levels as the top factor in job satisfaction. When you deploy these skills, your team will notice.
Why Emotional Intelligence Matters for CFOs
CFOs are inherently data-driven professionals who prioritize measurable outcomes and tangible results. Discussing emotions in a boardroom filled with financial experts might seem frivolous at best and irrelevant at worst. However, noticing people’s reactions and understanding the underlying emotions
provides a rich set of data points that you miss at your own peril. Observing, analyzing, and using this data to inform your decision-making will strengthen your influence and enable you to lead with more flexibility.
Research by EQ provider TalentSmart shows that EI is the strongest predictor of performance. Harvard Business Review studies go on to say that EI accounts for nearly 90 percent of what sets high performers apart from peers with similar technical skills and knowledge. Additionally, companies with a culture of
open communication and high emotional intelligence have been found to be 20 percent more likely to be innovative.
AJO Executive Coach, Fred Bunsa, likens incorporating EI into your leadership style as going from a black and white movie to full technicolor.” Here are just some of the reasons why EI should be a priority:
• Effective Leadership and Decision-Making
CFOs need to guide and inspire their teams through challenging financial situations. Studies have shown that leaders with high EI are more effective at building and leading teams, resolving conflicts, and making decisions that benefit the organization.
• Risk Management and Crisis Handling
CFOs are no strangers to risk management, and EI can significantly enhance a CFO’s ability to identify, assess and mitigate risks effectively. By staying attuned to the emotional undercurrents within an organization, a CFO can detect early warning signs of potential problems.
In times of crisis, CFOs with high EI are better equipped to navigate the storm. Their ability to remain composed, provide clear direction and inspire confidence in their teams can make the difference between financial stability and catastrophe.
• Client and Stakeholder Relationships
Building and maintaining strong relationships with investors, clients, and other key stakeholders is crucial for the financial success of any organization. By empathizing with the needs and concerns of others, you can expect more productive interactions based on trust and loyalty.
Furthermore, EI can be a critical asset when negotiating, as it allows CFOs to read the emotions and intentions of counterparts, giving them an edge in negotiations that can translate into significant financial gains.
Coaching for Emotional Intelligence
With a formalized coaching business established more than 20 years ago, AJO has seen a notable transformation in the objectives of our coaching engagements. There has been a greater emphasis placed on emotional intelligence as an essential component of effective leadership, regardless of the
industry. Today’s coaching landscape recognizes the critical role EI plays in fostering successful leadership and underscores an acknowledgment that leadership effectiveness goes deeper than technical expertise.
Once again, AJO Executive Coach Fred Bunsa offers his thoughts on explaining EI to the financial leaders he’s coached: “In the world of finance, the head and the heart may seem like opposites. But to excel as a leader, we must remember that the head alone can calculate numbers, while the heart understands the people behind them. Emotional Intelligence is the bridge where financial wisdom meets human insight, allowing us to navigate the complexities of finance with both our heads and our hearts.”
Emotional Intelligence may seem like an unlikely candidate for success in the realm of finance; however, it is an asset that CFOs cannot afford to underestimate. Embracing EI is not a departure from fiscal responsibility; it is an enhancement of it. It is time for CFOs to unlock the hidden potential of Emotional Intelligence and secure a brighter financial future for their organizations.
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Post by Shannon O'Connor Bock
Shannon O’Connor Bock is President of A.J. O’Connor Associates. A third-generation owner of this long-established family business, Shannon has been playing an integral role in the firm’s organizational strategy and growth for nearly 12 years. Gaining experience through hands-on involvement in all aspects of the business, she has cultivated a skillset that allows her to navigate seamlessly from concept to execution in the areas of client engagement, service innovation, operational efficiency and brand marketing.
