Aiden CholesThe 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 company could bet on their “quality of product� as a sure winner. Such strategies today do not suffice, and if opted for 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 are calling it the Emotional Economy, the Relationship Economy, or what we at call the Connection Economy. Whatever you call it, the game is changing, and strategies of old will not work. Tomorrow’s economy is all about connecting. Staying alive, nay, conquering your industry will be a matter of connecting with your customers, suppliers, employees, families of your employees and connecting with the communities your organization finds itself operating within.

Daniel Goleman, a pioneer in the field of Emotional Intelligence, 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 and flatter through technological advancement and globalization, there is a paradox emerging. As we seem to get “closer�, we seem to be drifting further apart. There are disconnects between customers and companies like never before. To understand this, take a look at the relationship you have with your bank. In days gone by, you could establish a personal relationship with your bank manager. Today, you bump into him at the check-out counter but you do not even know he is your bank manager. Every second company has a call centre that helps us with our queries, in theory at least. When last did you have a positive call centre experience? And they exist to connect with us better.
People are crying out for intimacy and depth to relationships on a global scale. But this need is not only limited to the realm of friendships, marriage and family. No. People are crying out for depth and connection within all spheres of life, including spheres of purchasing decisions, employment decisions and choices on where to live. 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 were sure you had product that was cutting edge because of a massive R&D budget. Prior to this, customers bought from you because they were sure you invested massive amounts of 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 you do. There leaves only one differentiator. People. Yes, 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 have established their strategies. It is Emotional Intelligence. Success in the connection economy will depend on the extent to which individuals, teams and organizations harness, develop and utilize 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, what Goleman calls, 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 organizations to tap into this magic.
Again, if we are to look at the companies leading the charge in the new economy we can see that they have embraced a paradigm shift in how employees and people relations are valued. As prospective employees prepared themselves for the world of work 10 years ago, they based their individual competitive advantage on skills-based competencies that fellow graduates did not have. Their “products� were formal qualifications, skills-sets, and demand revolving around such products. Today though, these competencies are still important, but companies need employees whose competencies extend beyond formal qualifications and hard-earned skills-sets.
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.
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, how to make them and how to model them for other employees. But to attract these employees companies need to brand their emotional intelligence as an organization. On the whole organizations need to become emotionally intelligent. Cultivating this form of intelligence will create long-term relationships that keep customers coming back again and again. Pleasing customers is no longer just about getting the job done, it is now about getting the job 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 organization in developing its collective EQ.
Another crucial step in developing your organizations EQ, as a competitive advantage, is to ensure that your leadership structures understand, exhibit and exude high levels of EQ. Goleman found that, in organizations 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, that 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. No. You need to be recruiting young talent with high EQ levels. Sadly, the state has been this: IQ gets you hired, EQ gets you promoted. Again, this needs to change.
Proponents of EQ in organizations have had a tough time in getting their message heard. Sadly this is still true of many an organization who chooses not to hear of the changes taking place. For them, it is business as usual. But for others who aim to survive, establishing EQ as a core competence of the organization is paramount. In developing collective EQ, organizations need to see how EQ relates to how talent is leveraged. It is sadly typical MBA-think to exclude the ability of people to collaborate or communicate within a company from assessing the company’s worth. Other aspects that are also excluded from strategy include the ability to read the customer base with a high level of empathy, to be nimble and adaptable.
The Emotionally Intelligent Organization is an organization with a high number of emotionally intelligent leaders, managers and talent. Not only will this organization be an employer of choice to our world’s brightest talent, but this organization chooses to be at the forefront of corporate practice and performance.
Nancy Gibbs chides us to be aware of an inherent problem in establishing an Emotionally Intelligent Organization. She tells us that emotional skills, like intellectual ones, are morally neutral. “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,� says Gibbs. So, the EQ strategy needs to be balanced by a value proposition that “does no evil� as that of Larry Page and Sergey Brin in establishing Google. The truth is that customers and employees are savvy. They will smell out an organization that does not provide a great cause for existing. 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 can not resist.
Positioning your organization as an Emotionally Intelligent Organization is not a task bets left up to your HR department. For too long HR practitioners have been on the look out for skills and IQ as indicators of great talent. One needs only to look at the proliferation of MBA graduates and schools to see the high price placed on formal qualification and IQ
Having an MBA is less of a competitive advantage that a few years back. Why? Because companies realized pretty quickly that having an MBA does not necessarily mean you have the required ability to make it work in the merging economy. MBA courses pay little attention, or token attention, to the aspects of EQ and people skills referred to in this article
Instead companies need to align their recruitment strategies with the power and relevance of EQ. They need to reinvent their organizations around the role of connections with employees and customers. They need to begin to feel. I’m not the first to say this. Yet, few companies have taken the first steps required to remain competitive in the connection economy.

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