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Business Review Weekly (Australia), August
22, 2002 The concept of emotional intelligence has attracted a lot of hype and some companies claim good results from it. Two years ago, the board of ANZ Banking Group accepted a plan to restructure the company into 16 individual business units. One of the dangers of the strategy was that it could encourage staff to become focused on their own units rather than the bank in general, leading to a territorial culture and the development of fiefdoms. ANZ hired the management consultancy McKinsey & Company to advise it about developing a culture that would reflect broader ANZ goals. After six months of analysis and discussion, a program was set up to establish the principles of emotional intelligence, which has become known as EQ. Emotional intelligence deals with how people handle themselves and their relationships. ANZ believes that the program is developing stronger internal relationships among its staff and is providing a greater sense of cohesion. When people are relating in an open and honest way, there is less chance that workplace politics and back-biting will undermine the structure, ANZ believes. The term EQ was popularised through a 1995 book by the United States psychologist Daniel Goleman. Goleman is co-chairman of The Consortium for Research on Emotional Intelligence in Organisations, based in the Graduate School of Applied and Professional Psychology at Rutgers University in New Jersey. Goleman says that EQ includes self-awareness, impulse control, persistence, zeal, motivation, empathy and social deftness, which can be found in people who excel, and whose relationships flourish. These people are stars in the workplace, and a person and a company can each benefit from cultivating these capabilities, he says. The head of the ANZ program, Sonia Stojanovic, says the project has been far-reaching. "It is not a program, it is a journey," she says. "We believe that, in order to be everything we want to be as an organisation - which is being of service to our customers, and our community, and Australia, and the planet - we really have to continually re-invent ourselves. This is a whole new ball game." Stojanovic says the program is designed to create "caring, connected relationships between employees at ANZ, as well as the bank's millions of customers". She says: "We encourage staff to make a whole go of their personal life - their relationships with their partners, their children, their parents, their colleagues at work - and then help them attach to why they are working with the organisation." The program, called "breakout and cultural transformation", started in March 2001 with the bank's 300 most senior staff. They were followed by the 4000 senior and middle managers, all of whom should have completed the training by December this year. Stojanovic says the program will be extended in October to the remaining 22,000 staff. ANZ spent $8 million on the program in 2001. A further $8 million will be spent this year. Stojanovic says it is difficult to put a total figure on the cost because the bank is now using its own training resources. Training includes a two or three-day workshop, plus a day's follow-up or telephone counselling. Part of the training deals with the way in which people make decisions, and it examines the reasons for the way in which they behave. It also studies the reactions of people who have been upset by something. Stojanovic says: "We teach high-performance mind, which is a meditation technique, to lower stress and increase people's well-being and creativity. We teach trust. And we talk about people clearing baggage from their lives. There are a whole bunch of different aspects to it. We also do a large session around ANZ values." Stojanovic says the training program has been successful, and the bank's culture is shifting of its own accord. "Because anywhere between 150 and 300 people a week are doing the training, the huge numbers coming back into the work environment are having a huge impact. A whole new language is coming into the organisation, and very open discussion is occurring about behavior that is appropriate and behavior that is not." There is evidence already that the business units are co-operating to a greater degree. Stojanovic says the top people from the corporate and institutional business unit and the investment banking unit are about to adopt what they define as a declaration of interdependence. The units once operated independently, but are now planning procedures for mutual support in the market. An ANZ manager has also won business from a large corporate client by explaining ANZ values and the way in which these values would support a client in a competitive market. Not surprisingly, not everyone is a fan of the breakout and cultural transformation program. Stojanovic says some ANZ staff have left because they did not agree with the training, or found it too difficult to adapt to the new culture. Some people do not like being open, up-front and honest, she says. By far the majority have accepted the changes. ANZ is not the only large Australian company with an EQ program. Woodside, Australia's largest oil and gas company, has put its 2300 employees through EQ training and plans to continue the program, although not everyone has embraced it (Woodside runs its program with McKinsey). Dianne Hannah, the performance leadership co-ordinator for Woodside, refuses to say how much the training has cost, other than it has been a substantial investment. She says there is always some resistance to any change management program. "These types of changes do not occur overnight. You will get a degree of pushback. For some it will take longer to work through." Hannah says Woodside is committed to the model. "You can feel the different energy here," she says. "It is totally different, and people are more open and give feedback. It's quite a different environment." As well as undertaking EQ training, Woodside has included an EQ component in its recruitment process. Hannah says: "In assessing people, we now focus on competencies based on the how, not just the what, which is based on the IQ. If we do find there are people who are benchmarked quite closely together, our recruitment team has introduced a psyche test, which is based on the EQ, not the IQ." Hannah says it is impossible to calculate the return on Woodside's investment in EQ training, but the results are good. Anthony Grant, director of the coaching psychology unit in the school of psychology at the University of Sydney, says the popularity of the term EQ has soared since Goleman's book, Emotional Intelligence, was published. "It is still somewhat controversial, but it is true that general IQ does not account for all aspects of success," he says. "We all know the situation where the apparently smart person is an absolute failure at dealing with his or her interpersonal relations. But is this a broader factor in personality or can you say it is an intelligence? That is a controversial issue." Grant believes that although personality plays a big part in behavior patterns, much behavior can also be learnt. He says: "Certainly, you will never turn someone who is amazingly aggressive, highly competitive and arrogant into someone who is really humanistic and encouraging. But what you can do is work with people to help them soften the edges. You can raise their awareness of who they are and how they are, and about how they impact on other people." Grant coaches senior executives (their names are confidential) in performance and development. He says coaching is a generic term for working to enhance performance, and he names three types of coaching: skills coaching (specialised learning in a general training course), performance coaching (long-term and usually associated with performance reviews) and development coaching (a sophisticated approach that concentrates on emotional competence). Real change is difficult to achieve in less than four months, says Grant. He says that despite the hype, EQ is predicated on a foundation of very little solid research. "Be extremely sceptical about people who claim to cure your organisation and performance deficits by waving their automatic EQ or coaching wands," Grant says. "It is just not the case. What you can get is really good increases in performance and well-being if it is done right, but it is not a panacea. You are not talking about Panadol for the modern organisational flu." Jim Bright, senior lecturer in organisational psychology at the University of New South Wales, says some academics claim there is nothing new in Goleman's work. "It is well accepted that there are five major traits of personality - agreeableness, conscientiousness, extroversion, neurosis and openness to experience," he says. "If you try to measure EQ, whatever results you get correlate very highly with other measures of agreeableness and conscientiousness. But EQ is a more intuitive concept for people to grasp in a training situation." Is Bright a fan of Goleman? "I am a fan of his ability to popularise something," he says. "He has captured the imagination of academics and of business people, on a very large scale. That is an achievement." Cynthia Thero, the principal owner of The Source, a company that specialises in training and coaching programs for companies, is running her first EQ training program with an Australian client this year. She says she cannot name the client, but it is one of the few clients that requested training in EQ. Barry Barakat, the learning and development manager at the pharmaceutical company Merck Australia, says everyone is using the term EQ. "But whether it is EQ or something they have always done is another story," he says. "A lot of our leadership programs and our leadership competencies can be put under the Goleman model." Merck Australia is a heavy investor in training programs, although Barakat says its difficult to put an exact figure on the amount involved. It uses full-time coaches, runs workshops and conducts private sessions. One of the consultants it has used is Carlos Raimundo, the managing director of Active Learning Centre, which specialises in company training programs. Raimundo developed a technique called the play of life, which uses small figurines on a board to dramatise real life and work situations. "People pick how they see their team working," he says. "You play it like a game. They, for example, pick one person standing up with hands in the air and say, 'That is my boss, screaming all the time, and this is how I feel - like a little boy'. And they might choose a figurine like a little boy in the corner of the stage. Because it is a visual technique it has a high level of efficiency." Raimundo says once this scenario has been played out, participants are allowed to create another scene, to be presented as the ideal situation. "People can then see what is necessary to achieve that level of performance," he says. "The technique is designed to help people improve the nature of their relationships." The training industry is a fertile breeding ground for buzz words. In the 1980s, human resources managers talked about social, physical and organisational skills. In the 1990s, physical, intellectual and EQ were the hot topics. Barakat says the new buzz phrase is talent management. Michael Rennie, a McKinsey director, says the term EQ is not going away. "It is a fundamental way of being that is very important," he says. Why is EQ a hot topic at the moment? "Business and life used to be organised around an industrial feudal model, where there were a few people at the top who worked out what to do and told everyone else," Rennie says. "The role of middle management was to make sure everyone did it. But the world has changed. Things are moving so fast and there is so much information flow. There is a need for continuous improvement because of globalisation. Companies are expecting everyone to work out what to do, and do it, in a clear framework." Rennie says the evidence supporting the importance of EQ - from people such as Goleman, and the businessman Ayman Sawaf, who co-wrote, with Robert Cooper, the book Executive EQ, which was published in 1997 - is compelling. "Goleman argues that up to 70% of the difference in performance of senior managers is about EQ," says Rennie. "In the US, 70-80% of the top 500 companies are doing EQ training with senior leaders, and it is going the same way here. This is going to be around for a long time." Go to http://www.brw.com.au/leadership/human-resources http://www.brw.com.au/leadership/management-theory The emotion factor American Daniel Goleman's 1995 book, Emotional Intelligence, popularised a term that psychologists had been using for years. Companies such as Woodside and ANZ Banking Group have recently run emotional intelligence training courses for their staff. How is emotional intelligence defined in Goleman's book? 1 Knowing your emotions: Self-awareness, he says, is the key to emotional intelligence. People who understand their emotions are "better pilots of their lives". 2 Managing emotions: Self-awareness leads to the ability to handle emotions. 3 Motivating yourself: Using emotions to achieve "self-motivation, mastery and creativity". 4 Recognising emotions in others: Goleman says empathy is the key skill in dealing with, and managing, people. 5 Handling relationships: He contends that the secret to developing a successful relationship is understanding, and managing, other people's emotions.
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Copyright © 2002 Macquarie Institute, Australia
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