Enterprise Rent-A-Car is the largest car rental company in the United StatesÑand growing. In a tough market that has left its competitors barely holding their ground, Enterprise has racked up 25 percent annual growth rates for more than a decade. How did this private, family owned business outsmart the likes of Avis and Hertz? Partly it was by a brilliant new rental strategy: Enterprise delivers cars directly to customers whose cars are in garages for repairs or maintenance. But company insiders give much of the credit to the business philosophy and personnel practices of founder Jack Taylor and his son, Andrew, the CEO.
The Taylors regard employees as budding entrepreneurs, and they give them the training and freedom they need to spread their wings. With more than 3,400 officesÑand more opening weeklyÑthe company relies on branch managers to develop and nurture loyal customers. One of the countryÕs largest recruiters of college graduates, Enterprise scouts campuses looking for outgoing, upbeat students whose E.Q. (emotional quotient) is higher than their GPA (grade point average). In fact, Enterprise puts such a premium on emotional intelligence that it has built its recruiting strategy around the concept. The company even posts a playful E.Q. quiz on its Web site (www.erac.com) to help job hunters decide if they are the kind of Òhigh-E.Q. peopleÓ Enterprise wants on its team.
It is appropriate that a family owned service business like Enterprise should be one of the first to pick up the concept of emotional intelligence and use it in their recruiting. After all, E.Q. is not only important to winning customers; it is essential for families that work together.
Emotional intelligence is more than just another business buzzword of the 1990s. Research on the subject goes back to the 1970s when some scholars challenged the notion of I.Q. as a sole measurement of intelligence. They argued that there are actually multiple kinds of intelligence and I.Q. is just one of them. Today psychologists and human resources departments around the country are devoting serious study to E.Q., devising tests to measure it and methods of coaching people who are short on it. But what exactly do the new E.Q. tests measure and how good are they? And just how might they be helpful in managing relationships in a family business?
Defining E.Q.
The term emotional intelligence didnÕt exist in 1957 when Jack Taylor founded Enterprise. It took Daniel GolemanÕs best-selling book, ÒEmotional Intelligence,Ó to give a name to what TaylorÑand most other employersÑknew from experience: It takes more than brains to succeed in business. The conventional wisdom was right: I.Q. may be a good predictor of how well someone will perform in school, but it is a poor predictor of how someone will do in life. According to Goleman, I.Q. accounts for perhaps 20 percent of success. Social class and luck are also factors, but what may carry greater weight is a set of capacities that make up emotional intelligence.
Psychologists vary in how they categorize and label these capacities, but many would agree with GolemanÕs definition: Emotional intelligence consists of knowing what you are feeling, recognizing what others are feeling, managing the feelings in relationships, and using your feelings to motivate yourselfÑeven in the face of frustrations.
Last January, a Toronto-based company, Multi-Health Systems, introduced the Bar-on Emotional Quotient Inventory, or Bar-on EQ-I, specifically designed to define and measure emotional intelligence. The test is the product of 16 years of research by psychologist Reuven Bar-on. While working with the Israeli Air Force, Bar-on was frustrated that most psychology tests did a poor job of predicting the success of air force personnel in everyday life. He recognized that to have greater predictive value, a test would have to assess a wider range of emotional factors.
Bar-on identified 15 specific emotional intelligence capacities and skillsÑamong them self-awareness, optimism, problem-solving, independence, and impulse controlÑthat influence a personÕs abilities to cope successfully with demands and pressures in the environment. The Bar-on EQ-I measures each area separately, with scores based on a variation from a mean of 100. For example, a score of 120 is above average and a score of 80 is below average, whether self-awareness or problem-solving is being tested. The results are reported as a profile showing an individualÕs strengths and weaknesses.
To date, the Bar-on EQ-I has been administered to more than 16,000 people in nine countries. The test is scored by computer, allowing Multi-Health Systems (MHS) to develop a database of profiles on individuals in a cross-section of occupations and professions. When an individual working in upper management, for example, takes the test, she can compare her profile with that of others working in the same field. Steve Stein, president of MHS, says that factors related to success in specific jobs appear to be constant across cultures.
Applying the Bar-on test
The Bar-on EQ-I requires a fair amount of sophistication to interpret. To ensure that it is used to maximum benefit, every six weeks MHS offers a two-day training course in Toronto. Howard Book, a psychiatrist and family business consultant in Toronto, took the training last year. He has since administered the test to two family businesses.
Book offered a hypothetical example of how the Bar-on EQ-I could be used in a family business. A founder has picked his favorite son, now 30, to be his successor. The sonÕs Bar-on EQ-I profile, however, shows that he is below average in two key areas for CEOs: assertiveness and stress management. Moreover, the son is not sure that he wants to take over the business, but he hasnÕt had the courage to tell his father.
After going over the profile with the son, Book would engage the father in a discussion of the qualities of successful CEOs. Pointing to the sonÕs below-average score on assertiveness, for example, he would ask the father to recount occasions in which the son held his ground in business dealings and, conversely, when he had to turn to his father or others to help him deal with overbearing customers. By focusing on the sonÕs profile, Book can start the father thinking about whether the son really has what it takes to run the business. ÒIn a delicate family situation like this,Ó Book says, Òhaving an objective assessment tool is a real advantage. A lot of people in family businesses donÕt like to talk about feelings, but they like to talk about numbers. The scores on the profiles give me a jumping off place, a lead-in to sensitive subjects that family members usually prefer to avoid.Ó
The fact that the son scored below average in two key areas for CEOs does not automatically disqualify him to run the business. Both are learned skills, and the son, at age 30, still has time to strengthen those areas. If the son is motivated, Book would design a coaching program tailored to his profile. For example, to increase his assertiveness, Book would teach him basic techniques such as how to state his position clearly and calmly, repeat it in the face of opposition, and use appropriate body language and facial expressions to reinforce his determination. Similarly, Book could give the son a program for coping with stress. Besides teaching him how to monitor physiological and psychological changes, he could train him to use relaxation techniques such as visualization and breathing exercises. Later, he would retest the son to gauge his readiness to take on more responsibilities.
Of course, another possible outcome of the assertiveness training is that the son may be emboldened to tell his father he really doesnÕt want to run the business. ÒThatÕs the beauty of this test,Ó Book says. ÒIt not only gives families an objective measure of a personÕs fitness for a job, it also gives them a language for talking about it that allows them to be more honest with each other.Ó
In BookÕs example, a fatherÕs love blinded him to his sonÕs competency to be CEO. But family businesses are hardly alone in placing people in positions requiring emotional intelligence skills they donÕt have. Daniel Goleman says it happens all the time in the business world. ÒToo often people are promoted into management positions on the basis of technical expertise, even though they have no team-building skills. This lack of attention to emotional intelligence is why the Peter PrincipleÑpromoting people to their level of incompetenceÑis so pervasive and so devastating.Ó
Is E.Q. coachable?
Whereas I.Q. and personality remain pretty stable over much of a personÕs lifetime, emotional intelligence is mutable. Those willing to put time and effort into training can raise their emotional intelligence, and increase their chances for success on the job and in their personal lives. ÒWhatÕs exciting,Ó Stein says, Òis that all 15 areas the Bar-on EQ-I measures are trainable. A profile is a snapshot of where a person is at the time of the test, but it can changeÑand that gives a lot of us hope.Ó
Like Steve Stein, Goleman underscores the importance of linking test results to training and coaching. But while all emotional intelligence competencies can be learned, improvement does not come overnight. Goleman says it takes a minimum of six months of ongoing coaching to strengthen and reinforce most competencies. Of course, even the best coach canÕt help people who arenÕt motivated to change their behavior.
This fall Goleman will put on the market a test of emotional intelligence he has developed with fellow psychologist Richard Boyatzis. Like the Bar-on EQ-I, this test is designed to measure the emotional capabilities that matter most for work. But GolemanÕs test is different in that it is a Ò360-degree instrument.Ó That is, it gives people feedback on what they need to perform well in a particular position based on both the individualÕs self-assessment of his competencies and his co-workersÕ perceptions of his strengths and weaknesses. ÒFamily businesses often get into trouble,Ó says Goleman, Òbecause family members donÕt have a way of objectively assessing one anotherÕs competencies without getting into all the emotional undercurrents at play. This test would give them an accurate reading because it pools the assessments of others in the business. So, if one family member has a beef with you, itÕs not going to determine your evaluation because his voice will be balanced by the voices of the others in the company, including employees who arenÕt family.Ó
Under GolemanÕs approach, consultants would discuss the profiles individually with each employee, and give feedback on their co-workersÕ perceptions of them. Who said what about whom would, of course, be confidential. Hearing a range of views may help some people see themselves and their co-workers in a different light. A sister who thinks her brother is a dreamer, for example, may reconsider her opinion when she hears that others in the company regard his optimism as a catalyst for new ideas. Others may be surprised to learn that their co-workers think they are insensitive or bad listeners. People below-average in interpersonal skills are unaware of the impact their behavior has on other people. Getting honest feedback from co-workers may motivate them to be more attentive to othersÕ feelings and ideas.
Another perspective
Esther Orioli and Robert Cooper are organizational consultants and co-founders of Q-Metrics, a research and measurement firm in San Francisco that created the EQ MAP™. Their interest in emotional intelligence grew out of their work on leadership development. To identify the elements essential to good leadership, they tested the EQ MAP™ on more than 2,000 executives in the United States and Canada. The map, however, is not intended for top management only. Orioli and Cooper use a broad definition of leadership that applies to employees at all levels of an organization.
The EQ MAP™ consists of 20 separate scales that measure three major areas: emotional awareness of oneself and others; core competencies demonstrated in daily life; and values and attitudes that reflect how the person views the world. It has one unique aspect: Unlike the Bar-on and Goleman tests, it attempts to assess whatÕs happening in a personÕs life at the time they answer the questions, to determine whether stress from transient health, relationship, or performance problems affects their scores. This enables people to see whether changes in their lives can improve their emotional intelligence. ÒSo what if you have a particular profile of strengths and vulnerabilities?Ó says Orioli. ÒWhat we want to know is how does it show up in your life, and how can you make use of that information in your work and your personal life?Ó
To answer those questions, Orioli and Cooper identified three driving forces common to successful leaders: Their energy and effectiveness increases under pressure; they are able to build trust relationships; and they create the future by anticipating the wants and needs of customers. Next, the researchers pinpointed the scales that related to each of those three forces, and depicted a personÕs scores on a chart, or Òmap.Ó The map provides a pre- and post-test picture for evaluating an individualÕs progress over time.
Cooper acknowledges that getting family business owners who are low in trustÑor, for that matter, executives in any companyÑto accept a coaching program can be a tough sell. ÒUnless they understand that trust matters to the bottom line, itÕs hard to push them on this,Ó he says. CooperÕs approach is to develop a structure for achieving a series of small goals in cycles of 21 to 30 days. Say the family business leader wants to begin by building trust in company meetings. Cooper would introduce a mechanism the group could practice consistently at each meeting, such as a check-in to ensure that everyoneÕs opinion is heard. At the end of the cycle, Cooper would evaluate progress by asking the participants questions like: Did you feel your views were respected and valued? Did you feel a greater sense of involvement in the discussion?
If this mechanism worked, Cooper would set another goal, say, working toward achieving what Q-Metrics calls Òconstructive discontent.Ó This is a scale that measures Òyour ability to stay calm, focused, and emotionally grounded, even in the face of disagreement or conflictÓ (see ÒMapping your E.Q.Ó below). A measure of strong leaders is the degree to which they can handle diverse views. Too often in businesses, the leader squelches opposition, and the result is that family members are afraid to cross him, or they rebel by engaging in destructive conflict. ÒWithout constructive disagreement,Ó says Cooper, Òcompanies cannot keep a competitive edge, because they wonÕt be making decisions as well as their competitors.Ó
Cooper uses a simple mechanism for introducing constructive discontent: At each meeting, employees are assigned roles as customers and suppliers and are expected to argue from those positions. ÒItÕs amazing what happens from something so simple,Ó he says. ÒIt loosens people up and encourages creativity. People feel good about what theyÕre contributing and donÕt want to go back to old ways of running meetings.Ó
Family business consultants have used a variety of other psychological tests and inventories to measure many of the same competencies now labeled emotional intelligence. The Berkman Profile, for example, measures such behaviors as how well individuals work in a team and whether the stress from underlying needs and motivations conflicts with their team role and work performance. It is too early to tell whether emotional intelligence tests will yield information more useful to family businesses than what other instruments provide. While emotional intelligence tests have been studied in different types of organizations, there is no data specific to family businesses.
Not a magic wand
Like any diagnostic instrument, emotional intelligence tests can be misused. Orioli and Cooper already see that happening. They say some businesses are using the tests alone to recruit or fire employees or to reject them for executive development programs. ÒSome companies are telling applicants that theyÕre not E.Q. smart enough for a particular job based on a test,Ó says Orioli. ÒI donÕt know of any E.Q. instrument that can measure both job competency and emotional intelligence.Ó That is one reason why Orioli and Cooper called their instrument a map rather than a test. The map, they say, is intended as a constructive tool for discovery and exploration and not to determine someoneÕs competency for jobs.
No responsible consultant would recommend determining a personÕs career options on the basis of one test alone. Properly used, however, emotional intelligence tests have particular application to family firms. Bonnie Brown, a family business consultant and president of Transition Dynamics Inc. in Eugene, Oregon, says that any test that gets families looking at how they communicate, talking about their needs, and taking action to change their behavior is valuable. ÒMy guess is that emotional intelligence tests will have a special appeal to family businesses,Ó Brown says. ÒA lot of families have resistance to anything thatÕs psychological or smacks of therapy, and thatÕs unfortunate. As long as emotional intelligence tests are related to job competency, theyÕll probably be more accepting of coaching, because theyÕll see it as training and not therapy.Ó
Another obvious application is succession planning. Testing the next generation when they are in their 20s, say, would help parents think in a systematic way about what their children need to run the business. The children would also have plenty of time to work on strengthening their weak areas so that when the time comes, they will be ready to take on leadership responsibilities. Brown says it is not only children who benefit from coaching. More and more of her clients, CEOs in their 40s and 50s, are recognizing that they need help in managing and preparing for transitions.
Whether emotional intelligence is all itÕs cracked up to be remains to be seen. WhatÕs evident is that there are no magic wands. Changing old habits and behaviors is still hard work, no matter how accurate the diagnostic tool and how expert the coaching. But for now it seems that the emotionally intelligent thing for family businesses to do is to pay careful attention to the developments in this field, and to take from theory and practice what makes most sense for their businesses. After all, what family business wouldnÕt benefit from raising its collective E.Q.?
Deanne Stone, a writer based in Berkeley, CA, is a frequent contributor to Family Business.
The statements below are excerpted from the EQ MAPTM designed by Q-Metrics in San Francisco. They assess Òconstructive discontent,Ó one of 20 scales used by the company to build a profile (map) of an individualÕs E.Q. Constructive discontent explores your ability to stay calm, focused, and emotionally grounded even in the face of disagreement or conflict. Aptitude on this scale is a strong indicator of leadership.
Instructions: To map your E.Q. on this scale, think about your feelings and behavior during the past month: For each statement below, circle the number that best describes you.
| Statement | This describes me: | |||
| Very well | Moderately well | A little | Not at all | |
| I would not express my feelings if I believed they would cause a disagreement. | 0 | 1 | 2 | 3 |
| When it comes right down to it, I can only trust myself to get things done. | 0 | 1 | 2 | 3 |
| I remain calm even in situations when others get angry. | 3 | 2 | 1 | 0 |
| It is better not to stir up problems if you can avoid doing so. | 0 | 1 | 2 | 3 |
| I have a hard time getting consensus from my work team. | 0 | 1 | 2 | 3 |
| I solicit feedback from my peers on my performance. | 3 | 2 | 1 | 0 |
| I am good at organizing and motivating groups of people. | 3 | 2 | 1 | 0 |
| I enjoy the challenge of facing and solving problems at work. | 3 | 2 | 1 | 0 |
| When I make a critical comment, I focus on the behavior and not the person. | 3 | 2 | 1 | 0 |
| I avoid confrontations. | 0 | 1 | 2 | 3 |
Scoring: Add up all the numbers you have circled to get your total score. HereÕs what Q-Metrics says your score indicates about your level of aptitude for this particular set of qualities:
26-30 - Optimal
21-25 - Proficient
16-20 - Vulnerable
00-15 - Caution
Discussion: We are trained from childhood to get along, not to hurt each otherÕs feelings and rock the boat. But some of the most creative and productive change is wrought when people thoughtfully and respectfully disagree. The constructive discontent scale measures your comfort level in remaining true to your own personal boundaries while capturing the power that often grows out of disagreement. Remaining open and receptive to new and different ideas are keys to optimal performance. The opposite end of this scale is Òdestructive contentÓÑthe tendency to hurry toward harmonious conclusions and cut off disagreements.
Copyright © 1996 AIT and Essi Systems Inc. All rights reserved.
Ñ Esther M. Orioli
Q-Metrics, San Francisco