Key Concept

Decisions, especially decisions involving risk, are often guided by emotions, such as anxiety, that in fact emerge from completely unrelated events. Emotionally intelligent leaders are less likely to make a mistake with “incidental” anxiety because they recognize the irrelevant source of their emotions. Leaders can also help others reduce the impact of incidental anxiety by simply pointing out the true source of their emotions.

Idea Summary

Emotional intelligence — the awareness and understanding of emotions — has a variety of workplace applications and benefits. Leaders who perceive and relate to the emotions of those they direct are going to be seen as more caring and understanding leaders. Leaders who can better manage their own emotions will also develop more positive relationships with subordinates and superiors. Finally, emotionally intelligent negotiators have been proven to be more effective.

One important facet of emotional intelligence is not only the ability to perceive and attend to the existence of emotions but also the ability to understand the sources of these emotions. “Emotion-understanding ability” allows you to analyse the cause-and-effect relationships between emotions and events, both backward (identifying the past event that caused the current emotion) and forward (predicting the emotions that will result from current or future events).

This ability is neither as obvious nor prevalent as it may sound. Many of us attribute our emotions to the wrong causes. For example, imagine an investor who is involved in a car accident on his way to work. If he has low emotion-understanding ability, he might attribute his anxiety to an upcoming business meeting instead of to its correct cause, the car accident.

This anxiety is an example of an “incidental” emotion — an emotion that arises out of environmental factors, whatever they may be, and is unrelated to the current decision or situation. In their research, Jeremy Yip of Yale University’s Centre for Emotional Intelligence, and Stéphane Côté of the University of Toronto’s Rotman School of Management, used experiments involving incidental emotions to show that emotion-understanding ability facilitates decision-making.

The experiments built on previous research that showed the negative effects of incidental anxiety — as exemplified in the investor story above — on risk-taking. People are less willing to take risks because of anxiety that is unrelated to the risk.

In their first experiment, Yip and Côté demonstrated that participants with lower emotional-understanding ability let incidental anxiety negatively impact their risk-taking more than participants with higher emotional-understanding ability. Their second experiment revealed the why of the first experiment results: Yip and Côté proved that lower emotional-understanding ability increased the negative impact of incidental anxiety because participants didn’t understand the source of their anxiety. Once participants with lower emotional-understanding ability were told their anxiety was irrelevant to the decision, the effect of incidental anxiety on the decision decreased.

Business Application

Emotional Intelligence has been front and centre in the leadership conversation since the publication of Daniel Goleman’s groundbreaking bestseller, Emotional Intelligence. This new research, however, shines a light on a facet of emotional intelligence that is often ignored, and yet has important leadership and professional development implications.

Leaders must not allow incidental emotions to colour their decision-making, especially involving risks. Leaders are often warned to pay attention to assumptions and biases. This research helps leaders address “affect-driven” biases — biases that emerge from incidental emotions and impact decision-making. Heading into a meeting that involves some major decisions, the anxious investor we met earlier is less likely to take risks, even calculated risks, precisely because of his anxious state. If before the big meeting, however, he explicitly recognizes that his anxiety is related to the car accident (because he’s wondering how he’s going to pay for the damages and what will be the impact on his insurance rate), he will not let that anxiety guide his decisions or attitude in the meeting.

Leaders must also help their subordinates, whether employees or managers, to disarm affect-driven bias. Identify those with lower emotional intelligence and point out the root cause(s) of the emotions that are impacting their decision-making capabilities.