What is the trade-off between a compassionate workplace culture and strong corporate performance? Surprise, there isn’t one! Corporate performance is subordinate to organizational culture and the emotional intelligence of senior leaders.
This article by Travis Bradberry of Emotional Intelligence 2.0 fame describes an interesting conundrum. A large number of top corporate leaders have poor emotional intelligence. The highest emotional intelligence is found amongst front-line managers and then each management level upward the leaders display increasingly diminished emotional intelligence.
Bradberry attributes this phenomenon to two factors. First, corporate boards are selecting for leaders who deliver the numbers, such as profits, sales volumes, and stock price appreciation. Second, the work environment of senior leaders impairs emotional intelligence and inhibits its growth. Severe stress, lack of rest, regulatory enforcement, and a low-trust and blame-heavy environment can drag anyone into an emotional stone age (and keep them there).
What is fascinating is that corporate leaders with high emotional intelligence, although fewer in number, still perform better than others. It may be that organizations will select the occasional gem of a leader, but otherwise we are mostly recruiting and promoting lower-functioning leaders into senior roles. So how do mean bosses even get the job in the first place?
It is reminiscent of Jeffrey Pfeffer’s book Power: Why Some People Have it and Others Don’t. Pfeffer provides endless examples of how an executive’s career prospects are often inversely proportional to their performance. In brief, being a cold and calculating savage will motivate people to not mess with you. It is possible to rig your career towards a poisoned and under-performing work environment where you still reign supreme. When corporate leaders spend all day making power plays, there appears to be no beneficiary of this behavior other than the leader. Look directly at these kinds of leaders. How are they doing? They seem to be doing well. It’s just everyone around them who is falling apart. It’s all of those people who just can’t play the game and can’t keep up; they aren’t able to deliver corporate performance. Of course, the punchline is that downstream inability to perform is a hallmark of inferior top leadership.
There is another consideration; do major corporations have sufficient protections against leaders who have personality disorders? The best-known personality disorder is psychopathy, which is well-documented in Robert Hare’s Without Conscience. The other disorders are important, but psychopaths are special. When you get to know the type, it sounds like the personality of someone who perfectly reflects the values of an emotionless profit-maximizing corporation.
Indeed this was well documented in The Corporation, a movie by Mark Achbar, Jennifer Abbott, and Joel Bakan. Their critique is that the behavior of major corporations (as institutions) ticks all of the boxes on the checklist of psychopath behaviors for people. If we promote leaders who reflect corporate values, and the corporate values are that we should act like psychopaths, then who is going to end up in charge?
There is a lack of insight amongst psychopaths, corporations, and many corporate leaders, and this lack of insight is at the root of poor emotional intelligence. Let’s face it, if you got cut off in traffic by some jerk on your way to the office, and then a colleague cuts in front of you at the coffee station, it’s easy to get snippy. Do you keep control? Are you even aware that you’re just carrying-forward a residual emotion from an hour earlier? I mean, if it’s possible to carry-forward quarterly accounting indicators, surely it’s possible to carry forward emotions.
How can corporations be unaware of the need for a compassionate working environment? I think it’s because hierarchy diminishes the two-directional information flow up and down the chain of command. If the board wants numbers, executives commit to deliver, and the rest of the hierarchy snaps into line, this reveals an opinion that the best opinions come from the top. However, this might not be how the world really works. It is an organization’s history, geography, and people that determine the culture. And it is the culture that determines the customer experience, the spirit of innovation, a healthy attitude towards rules, compassion during crisis, and discretionary effort amongst staff.
One does not simply demand good numbers. Rather, we harvest good numbers from a well-cultivated culture.