The most successful business leaders consistently recognize opportunities, pursue the right ones, identify and overcome obstacles, manage potential risks and mobilize their organizations to act. These executives, according to Jack Welch, are “constantly looking around corners, anticipating and ‘smelling out’ issues”. And he says, “Asking the right questions and anticipating problems is a big aspect of leadership.”
Illustration: Jayachandran / Mint
Why are some executives better equipped to get at the heart of important issues and effectively anticipate and manage challenges that arise? What skills do these leaders possess? At Spencer Stuart, years of research and interviews with scores of successful business executives show that the most effective leaders possess a quality called executive intelligence. This vital component of business judgement and leadership refers to an executive’s capacity to accurately analyse situations and solve problems, work with and through people, judge oneself and adapt behaviour accordingly.
Having leaders with these capabilities has always been critical to the success of companies. In today’s business environment, where growth is more difficult to achieve, competition is more intense and scrutiny of business practices is greater, it is more important than ever that organizations identify the individuals who possess these critical thinking skills and ensure that they rise to the company’s key roles.
What is executive intelligence?
Executive intelligence is related to, but not the same as, academic intelligence. Academic aptitude in language, math and spatial reasoning, which are measured through standard IQ tests, has little relevance to many of the day-to-day demands of business. As Jim Kilts, former CEO of The Gillette Co., explains: “Many of the top business leaders have attended elite academic institutions and this education can serve as a good foundation—the ability to think critically and understand concepts. So, a doctorate can be an indication of intellectual horsepower. But in a business setting, you must be able to not only generate ideas but translate those ideas into results. That is the hardest thing and requires abilities that go beyond academic skills.”
Specifically, business leaders must excel in three areas: accomplishing the tasks of leadership, working with and through people and evaluating their own attitudes and behaviours and making adjustments when necessary.
Leaders with a high degree of executive intelligence are able to better assess complex economic environments and identify appropriate responses to key business issues. They anticipate likely obstacles to achieving objectives and identify sensible ways to circumvent them. These leaders critically examine the accuracy of underlying assumptions and recognize what is known about an issue, what more needs to be known and how best to obtain the necessary information. They are also able to examine issues from multiple perspectives to identify possible unintended consequences of various plans.
In working with other people, these executives are able to recognize the agendas and motivations of individuals and groups who are involved in a particular situation. They anticipate the possible emotional reactions people may have to actions or communications. They accurately identify the core issues and perspectives that are central to a conflict and balance the different needs of relevant stakeholders.
Skilled leaders are also able to look objectively at themselves. They pursue and encourage feedback that may reveal errors in their own judgement. They recognize their own personal biases or limitations in perspective and use this understanding to improve their thinking and plans for action. They recognize when it is important to acknowledge their own flaws or mistakes and make a change and when it is appropriate to resist the objections of others and remain committed to a certain course of action.
In practice, great leaders not only conceptualize and formulate strategy but also see initiatives through to completion. This requires them to make adjustments based on new information or early results, understand challenges and potential consequences, ask thoughtful questions and probe the assumptions of others. A senior telecommunications executive explains it this way: “Clear thinkers—the ones that can cull everything down to the right point—can be very hard to find. But if you get yourself a team of clear thinkers, the possibilities are endless. They are good listeners and are thoughtful and they apply those traits to any set of issues with which they are engaged. They have the ability to listen openly, reflect on varying viewpoints and rapidly synthesize what is useful or meaningful when dealing with a particular issue. They quickly get to the core of a problem.”
Leaders without these skills fail to question conventional wisdom or underlying assumptions and don’t anticipate unintended consequences. They do not recognize the motivations or agendas of others and how these might impact the way decisions are made or applied. Finally, they are unable to look critically at their own biases or limitations in perspective and make adjustments.
Using executive intelligence
Even the most successful people, when asked what enables them to be so effective, inevitably find it difficult to give precise and definite factors. They themselves, many a time, are not aware of the specific skills they possess, but simply apply them intuitively. Similarly, there are core aptitudes that make great business leaders so special. And that’s what executive intelligence does; it lays bare the core abilities that make great leadership happen and enables their assessment.
The logic behind executive intelligence makes it a practical tool that can be used to identify and develop the managerial talent businesses so desperately seek. Knowing the specific skills that allow star leaders to outperform their peers, companies can concentrate on hiring people that have them.
Furthermore, like any set of skills, executive intelligence can be improved upon with focused attention and practice. However, traditional training and teaching methods are not enough. Research has shown that with specialized instruction people can significantly improve their cognitive skills, including their IQ test scores.
The concept of executive intelligence has given rise to a complete understanding of what drives leadership success. While evaluating a person’s knowledge is critically important, it provides only half of the story. Executive intelligence is the other half—telling us how skilfully an individual will use his or her knowledge to perform his or her job.
This is the first of a two-part series on executive intelligence. The second part will look at how companies can best utilize executive intelligence.
The article is drawn from a paper authored by Cathy Anterasian and Gerhard Resch-Fingerlos, Spencer Stuart consultants, and Justin Menkes and Robert Stark, co-founders of the Executive Intelligence Group (which was integrated into Spencer Stuart in 2007). Executives’ quotes originally appeared in the book Executive Intelligence: What All Great Leaders Have by Justin Menkes.
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