Supply Chain Consultancy                                                                     Supply Chain Consultancy Whit...
Supply Chain Consultancy White Paper         What is EQ?         EQ can be easily defined as how well an individual unders...
Supply Chain Consultancy White Paper                                                How do they do it?                    ...
Supply Chain Consultancy White Paper                                                 While some case studies have demonstr...
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Emotional Intelligence


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As organisations became more complicated and the need to
collaborate increases, the requirement to
manage relationships effectively will also rise
in importance. So what does this mean for
developing high performing organisations?
In this white paper, Danielle Butler-Miles explores two key questions:
How does Emotional Intelligence Quotient
(EQ) impact on businesses and business
performance? and
How do we develop EQ in our businesses?

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Emotional Intelligence

  1. 1. Supply Chain Consultancy Supply Chain Consultancy White Paper Emotional Intelligence In our recent interview with Professor Richard Wilding believes that as supply chains Richard Wilding of Cranfield School of became more complicated and the need to Management he predicted that high levels collaborate increases, the requirement to of Emotional Intelligence will be essential manage relationships effectively will also rise for those managing the supply chains of the in importance. So what does this mean for future. But what makes Emotional Intelligence developing high performing supply chains? so critical for creating high performance To answer this, we started doing some supply chains? Here Danielle Butler-Miles homework. We asked two key questions: explores the rise of ‘soft skills’ in the supply chain and its expected impacts on the  How does Emotional Intelligence Quotient business. (EQ) impact on businesses and business performance?  How do we develop EQ in our businesses? The conclusions were not as simple as we expected. The good news is that all organisations can capitalise on this human potential with the right foundations. 1 of 4
  2. 2. Supply Chain Consultancy White Paper What is EQ? EQ can be easily defined as how well an individual understands and manages their own (and others’ emotions - the ability to communicate, motivate and organise people). The concept of Emotional Intelligence Quotient first came to popular prominence in 1995, although this built on work going as far back as the 1930’s. Since then there has been a range of definitions developed by academics and commercial organisations. Two of the most commonly quoted are summarised below. Mayer and Salovey considered four Goleman developed a framework with elements: (1) 5 elements that define high levels of emotional intelligence: (2) Self awareness. They are aware of theirs The ability to perceive emotions in and others emotions. They are confident oneself and others and trust their intuition. Self regulation. The ability to control The ability to generate, use and feel emotions and impulses. They think before emotion to communicate feelings they the act. Motivation. Highly motivated with the The ability to understand emotional ability to take a long term view. They love feelings a challenge. Empathy. The ability to understand the The ability to regulate emotions in wants, needs and views of those around oneself so as to promote understanding them. Social skills. Good social skills and a ‘team player’. They help others develop, are excellent communicators and are good at building relationships. Some measures suggest women are, on average, better than men at some forms of empathy and men do better than women when it comes to managing distressing emotions. Whenever you talk about such gender differences in behaviour, you are referring to two different Bell Curves, one for men and one for women that largely overlap. What this means is that any given man might be as good or better as any woman at empathy, and a woman as good as or better than a specific man at handling upsets.(3) Psychologist Ruth Malloy at the Hay Group Boston studies excellence in leaders. She finds when you look at the stars - leaders in the top ten percent of business performance - gender differences in emotional intelligence wash out: The men are as good as the women, and the women as good as the men, across the board. (3) Why is this important now? We all have the understanding that managing supply chains is becoming both more complex and volatile. Supply chains have become increasingly global, giving rise to greater risks in terms of their exposure to natural catastrophes, political issues, demands for natural resources and exchange rate fluctuations. This entails working with a wider range of stakeholders across many cultures and business disciplines. Globalisation poses risk challenges that we have not faced before. As an example towards the end of 2011, the Honda plant in Swindon, United Kingdom, closed due to floods in Thailand disrupting the supply of parts – production in Europe had also been hit. Consumers now have almost perfect visibility of the options available to them meaning that customer loyalty has become extremely changeable. In addition to the market becoming increasingly complex, with shorter product lifecycles and more routes to market; it is little wonder that many supply chain managers seem to be permanently busy responding to almost daily changes in demand. Managing relationships has always been important, but it is even more so in this complex environment.2 of 4
  3. 3. Supply Chain Consultancy White Paper How do they do it? We all know people who, in spite of everything, manage to glide serenely through this chaotic world. They rarely lose control, have the ability to calmly analyse any situation, make the right decisions and communicate clearly with their teams. In the literature, these people are described as having high levels of Emotional Intelligence Quotient. As a result, the whole subject of EQ has become the subject of a great deal of research in recent years. After supervisors in a Can we develop EQ? manufacturing plant received It would be easy to dismiss EQ as ‘just the way we are’. It is our personality. It is who we are. training in emotional competencies We react emotionally to situations based on our inherent values and experiences. It would such as how to listen better and therefore be difficult to ‘train’ a person to have a higher EQ. However, this is not the case. There help employees resolve problems are many different approaches available in the literature, but the Charted Institute of Personnel on their own, lost-time accidents and Development describes two. were reduced by 50 percent, formal grievances were reduced The first is based on Goleman and recognises that emotional learning involves changing the from an average of 15 per year ways people think and act which are central to their personality and identity. People are likely to to 3 per year, and the plant resist being told, for example, to control their temper or improve their interpersonal skills. Thus exceeded productivity goals by developing EQ requires different parts of the brain to be ‘retuned’. This takes time. Goleman says $250,000 (Pesuric & Byham, 1996). it takes at least two months to unlearn old behaviours and replace them with new ones. For this In another manufacturing plant reason, at Unipart, when we implement ‘lean’ management techniques in a business, we always where supervisors received similar allow at least two months of ‘sustainment’ to ensure that the new behaviours, associated with the training, production increased new processes, are firmly embedded. 17 percent. There was no such increase in production for a group The second is based on Higgs and Dulewicz take a different approach to developing EQ. They of matched supervisors who were believe that some of the components can be learned by conventional teaching and coaching not trained (Porras & Anderson, methods. These include sensitivity, influencing and self-awareness. Other competences such as 1981). motivation, resilience and consciousness need to be developed on an individual basis. Some teaching organisations, such as Cranfield University, take a different approach again. On their executive courses they make extensive use of role play, including the use of actors to play A Fortune 500 Company had out scenarios and then debrief students in a workshop environment. This then needs to be utilized personality assessments for followed up to ensure that the new, learned behaviours are followed through to the workplace. candidate selection for years with little results in reducing turnover Some individuals are naturally gifted with EQ skills and the good news is that for those that are in their sales force. After turning starting out on their EQ journey they can be developed further with training and coaching. to an emotional intelligence-based selection assessment and EQ What is the impact of EQ on performance? training and development program, The literature suggests that the answer to improving business performance is to invest in high they increased retention by 67 levels of EQ. We either recruit on the basis of EQ or we invest in development programmes for percent in the first year, which our current staff (both male and female). they calculated added $32 million to their bottom line in reduced There is some evidence to suggest that high EQ enhances job performance. For example: turnover costs and increased sales  Higgs and Dulewicz (4) demonstrated ‘a very clear relationship’ between EQ and managers’ revenues. career advancement over a seven year period.  American financial advisors went through an EQ development programme and achieved sales gains of 8% to 20%. (5)  Ten EQ competencies emerged as the distinguishing capabilities of successful teams in a The Hay Group states that German chemical company. (6) one study of 44 Fortune 500 companies found that salespeople It is interesting to note that typically, managers receive most of their training in technical skills with high EQ produced twice the that we traditionally measure in terms of Intelligence Quotient (IQ). Companies attending the revenue of those with average or Cranfield University executive development programme are recognising that they need a higher below average scores. In another proportion of time spent addressing emotional intelligence - the ‘soft skills’. study, technical programmers demonstrating the top 10 It would appear that recruiting on the basis of high EQ (or development of these skills) will be percent of emotional intelligence good for both the individual and the business. The results will be a better supply chain, which competency were developing operates at lower cost, offers better customer service and becomes more agile. software three times faster than those with lower competency If only it were so simple.3 of 4
  4. 4. Supply Chain Consultancy White Paper While some case studies have demonstrated a direct link between EQ and business results, the relationship is more complex. High levels of EQ may not of themselves release business benefit. Rather, it is leaders with high EQ, which contribute to a wider culture of employee engagement and continuous improvement that create the conditions for high performance. It starts with Emotionally Intelligent Leadership Senior managers create the culture in an organisation. Often they have worked their way up through the business and this gives them one particular view on management (for example ‘command and control’), so you have to raise awareness of alternative approaches and the benefits of a collaborative workplace. For over 20 years Unipart has Without the right culture, the benefits of increased levels of EQ will not accrue. Individuals with pioneered a way of engaging the appropriate skills will run the risk of being ‘ground down’ by a corporate culture that does people in operational excellence not encourage collaborative working or cross functional communications. and continuous improvement called The Unipart Way, Unipart’s So what does a business need to do to establish the right culture? The answer to this lies at the approach of Performance top of the organisation, where the tone is set for allowing high levels of EQ to flourish. The key Through Engagement has created to increased personal and organisational performance is Self Awareness - knowing one’s internal a workforce that operates high states, preferences, resources and intuitions. performing businesses for itself and clients. Unipart’s successes can be In short, what are needed are good, self-aware leaders willing to guide the organisation towards attributed to emotionally intelligent collaboration. leadership that is committed to employee wellbeing and engaging The conclusion with them at every level of the High levels of EQ, whether inherent, or purposely developed, in both men and women, are key to organisation. managing any organisation. The skills of communication, motivation, organisation and engagement are essential for high performing supply chains. However, they are not sufficient in themselves. Unipart’s commitment to It is the leaders with the high EQ skills that are critical to drive the organisation to provide the emotionally intelligent leadership strategy, vision, frameworks, environment and culture to support people engagement, shared can be summed up in 7 learning and continuous improvement. Fundamentals: With these in place, then a business will have an engaged workforce, prepared to ‘go the extra  Be self-aware mile’. The result will be improved business performance in terms of innovation, cost, agility and  Know your people really well customer service.  Show respect, be clear, be fair, be consistent (1) Mayer, J and Salovey, P. Four Branch Model (1997) (2) Goleman,D. The Consortium for Research on Emotional Intelligence in Organizations  Give your people the (3) opportunity to grow women-more-emotionally-intelligent-men  Set stretching goals (4) Higgs, M. and Dulewicz V. (1999)  Always follow through (5) Golman, D. (1999) Working with emotional intelligence (6) Woodruffe, C. (2001) Promotional intelligence. People management. Vol 7 No. 1.  Deposit more than you withdraw The Unipart Way ensures every person’s focus is on delivering benefits that make a difference to the customer and the customer’s customer. It comes For more information contact: down to working to common Unipart Expert Practices values, alignment, and a focus on Unipart House, Garsington Road partnership / collaboration built on Cowley, Oxford mutual openness, trust and respect. OX4 2PG Tel: +44 (0) 1865 384690 or visit our website: of 4