In recent years, there’s been a fair amount of debate over Emotional Intelligence and its necessity in the C Suite. However, a recent study of 225 CEOs by the University of Chicago (and found at the Topgrading Blog) revealed that “those who were extremely results-oriented delivered much better financial results than CEOs high in emotional intelligence.”
The author continues,
Now, I don’t this invalidates the necessity of high EI. Rather it puts it in context. If given the choice between hiring a high results-oriented leader or a high EI leader, you would normally want to choose the high results-oriented leader–unless that leader’s EI is low (the Topgrading recommendation is that an EQ of 7 or higher is good, while a 6 or lower is bad).
Geoff Smart (of Topgrading) says that while soft skills are important, the existence of hard skills is what differentiates CEO performance. And the ultimate proof is that “cheetah” CEOs meet or exceed their financial targets TWICE as often as the “lamb” CEOs.
If you haven’t read the article yet, why don’t you do so now. It’s worth the read.
In addition, I think you’ll also like the discussion on the cost of CEO turnover and some interesting guidelines (from an article in Chief Executive magazine). For example,
- Cost of a sales rep mis-hire = 5x salary.
- Cost of a senior manager mis-hire = 27x base comp.
- Avg. cost of a CEO of a large company is $53M
- Avg. cost of a CEO of a mid-range company is $22M
- Avg. cost of a CEO of a small company is $13M
- A CEO change usually means a 25% departure of other execs
- Average severance for large company CEO is 3 times salary
- Average severance for a mid-size company CEO is 2 times salary
- 40% of CEOs are gone within 18 months
Plus more. So head over to topgrading and read the whole article. It’s worth the time!
P.S. This may also explain why so many non-profits and religious organizations, like churches, have a hard time growing. Just a thought!