Nothing Soft About Soft Stuff

When I visit a company, I often see that all the executives have copies of the same business book on their desks. Most common these days is “Good to Great” by Jim Collins. Many companies are diligently trying to emulate the conditions that Collins and his team found in great performers. However, most executives on this quest forget Collins’ most strident warning: that “Good is the enemy of great.”

There are a number of reasons that a business does not move beyond good performance into great. One of the most pervasive is a management model based primarily on intellect and toughness — traits that were more important in past decades.

It is research by Daniel Goleman at Harvard’s business school, rather than Jim Collins, which has redefined not only our picture of effective leadership but provided an understanding of its business impact under today’s conditions.

Goleman and his colleagues have been researching emotional intelligence and its impact on performance for almost three decades. Two of his books taken together prove that what is often dismissed as soft stuff is actually one of the most effective investments a company can make in financial performance.

Emotional intelligence demonstrates that so-called soft skills have outstripped intellect and technical prowess as the primary competence for successful business leadership. (Note: Goleman does not argue that intellect and technical competence are not important, just that they have become secondary in the 21st century owing to changes in business conditions and attitudes among employees.)

Second and perhaps more important is the research resulting in “Primal Leadership.” Goleman found that emotional intelligence’s return on in-vestment in a leader is higher than for any other leadership competence. And his research showed that as executive development is taken higher up the organization, return on investment increases exponentially. In other words, developing soft skills in your leadership team pays huge dividends.

While I have huge respect for Goleman’s work, I hold a more extreme viewpoint. When talking with companies considering some kind of executive development program, a CEO will often say, “We do not need to do this. We have smart people here and they know what they are doing. Besides, this is just soft stuff.”

In no case would I argue that point. No one goes out of their way to hire inexperienced fools to run their company. However, while a trucking company has also bought excellent trucks, no operator of a commercial fleet needs a return on investment argument for performing preventative maintenance. Nor would the owner of a sports team limit practice time or coaching on the argument that top athletes were hired.

Developing soft skills is what you do to protect the sizable investment you have already made in a quality management team. Think of it as planned maintenance to be certain that the team is running at peak efficiency.

Another endorsement of this view was published in Business 2.0 this month in the form of excerpts from “The CEO’s Secret Handbook,” an informal, previously unpublished guide authored by Bill Swanson, retired CEO of Raytheon, that has been quietly circulating among a community of top business leaders.

The behaviors and attitudes that Swanson espouses are largely grounded in emotional intelligence. They were also found by Jim Collins to have a high correlation with the criteria of successful leadership cases in “Good to Great.”

So, if you have been talking about level-five leadership, flywheel effects and hedgehog-like focus in an attempt to put “Good to Great” to work at your company, you might want to read “Primal Leader-ship” and get to work on the emotional intelligence of your leadership team. It turns out to be not so soft after all.

Originally published in Arkansas Business, Barry Goldberg On Leadership, July 11, 2005.