HBS Notes | What Makes a Leader

Unit 3, Scott Snook's leadership course. Assigned reading: Daniel Goleman, What Makes a Leader?

The article opens with a story everyone in business has heard.

An executive, extremely intelligent and highly skilled, is promoted into a leadership position — and fails.

Another, solidly intelligent but not dazzling, steps into a similar role — and soars.

We're far too used to explaining leadership with smarts. Goleman's verdict is blunt: IQ and technical skills are the entry ticket — they decide whether you get in the door. Once you're inside, what sets people apart is emotional intelligence.

Here goes — enjoy:

The higher you go, the less the gap is about technique, and the more it's about people

Goleman analyzed competency models from 188 companies, most of them large multinationals, Lucent, British Airways and Credit Suisse among them.

He sorted capabilities into three groups: technical (accounting, business planning), cognitive (analysis, big-picture thinking, long-term vision), and emotional intelligence (working with others, leading change).

When he ran the numbers, emotional intelligence carried roughly twice the weight of technical skills and IQ in outstanding performance — at every level.

At the top, the technical differences are already small. Nearly 90% of the gap between stars and average performers can be attributed to emotional intelligence.

In 1996, David McClelland saw a more concrete picture at a global food and beverage company: when senior managers had a critical mass of emotional intelligence, their divisions beat yearly earnings targets by about 20%; without that critical mass, they underperformed by almost the same amount. Divisions in the US, Asia and Europe all pointed the same way.

These are his samples, not laws. But I buy the direction.

As you move up, the work changes — you rely less and less on getting a problem right yourself, and more and more on other people being willing to get it right.

Emotional intelligence lives in the other half of the brain, which is why classrooms can't teach it

Are leaders born or made? Goleman's answer is both: part genetics, part experience, and the proportions can never be pinned down.

What is certain is that it grows with age. The old word for it is maturity.

People who aren't mature enough need training. Unfortunately, too many leadership programs put their effort into the wrong part.

Emotions, impulses and drive sit mainly in the brain's limbic system. It learns through three things: motivation to change, sustained practice, and feedback from others.

Concepts and logic live in the neocortex. The neocortex learns by reading, attending lectures, mastering frameworks — how to run a regression, how to make a sales call: reading a book is enough.

Learning empathy the way you'd learn regression isn't just slow. Goleman and his colleagues found that such programs sometimes actually made job performance worse.

He tells the story of a Wall Street executive.

This executive wanted to improve his empathy — his ability to read other people's reactions and see their perspectives. Up to then, his subordinates had been afraid to work with him, and bad news never reached him.

When he confronted these facts for the first time, he was shocked. He went home and told his family, and they only confirmed what his colleagues had said: when their views differed from his, they were afraid of him too.

He hired a coach. The first step was a vacation in a country where he didn't speak the language. There, he paid attention to how he reacted to the unfamiliar, and to how closed off he was to people different from himself. A week abroad taught him humility.

Back home, he had the coach shadow him several times a week, critiquing how he handled differing opinions. He treated his interactions at work as practice — deliberately listening to views that contradicted his own. Finally, he had his meetings recorded and asked his subordinates and colleagues to critique them: had he really listened?

Months went by, and his emotional intelligence did improve, and his overall performance changed along with it.

Not a single step of this process could have been done by reading a book.

Emerson is quoted here: nothing great was ever achieved without enthusiasm.

Short courses aren't enough; manuals aren't enough. A person first has to genuinely want to change.

My own take goes half a step further: AI is making the neocortex side of the work fast and cheap — analyzing, drafting, building frameworks, writing a well-judged letter. The entry ticket has gotten cheaper. What's behind the door hasn't.

Five capabilities: three for managing yourself, two for managing others

Self-awareness: daring to name your weaknesses isn't weakness — it's the precondition for seeing your organization clearly

Self-awareness means having a deep understanding of your own emotions, strengths, weaknesses, needs and drives — and knowing how they land on other people.

Goleman describes a department store manager. The company was about to launch a personal shopping service, and she had reservations. No one asked her, but she took it upon herself to explain to her team and her boss: "It's hard for me to get fully behind this project, because I really wanted to run it and I wasn't chosen. Bear with me while I deal with that." A week later, she was all in.

The way to spot it is quite concrete, too. In an interview, ask the candidate to describe a time they got carried away by their feelings and later regretted it. Self-aware people admit it frankly, often with a touch of self-deprecation. In performance reviews, such people actively ask for constructive criticism; people with weak self-awareness hear "you need to improve" as a threat.

In many rooms, candor is treated as "not tough enough." Goleman argues just the opposite.

Only people who can assess themselves honestly can assess the organizations they run — do we have the management capability to acquire a competitor? Can we launch this product in six months?

Self-regulation: when the impulse comes, don't let it sign on your behalf

Biological impulses can't be switched off. What you can do is carry on an ongoing inner conversation.

Goleman offers a scene: an executive has just watched his team botch a presentation to the board. In the gloom that follows, he might feel like pounding the table or kicking a chair, might yell at the team, or might glower and storm out.

Someone good at self-regulation takes a different path. He chooses his words carefully, acknowledges the team's poor performance, but doesn't rush to judgment. He steps back to think: was it a lack of effort? Were there mitigating factors? What role did he himself play in this debacle? Once he has thought it through, he calls the team together, lays out the consequences, says candidly how he feels, and offers his analysis and a proposed solution.

Trust slowly grows up around such people. There's less office politics, and good people want to stay. And it flows downward — if the boss is known for staying calm, a hot temper starts to look out of place.

It also has to do with integrity. Inflating profits, padding expense reports, abusing power for personal gain — these are rarely planned. Most of the time an opportunity comes along, and someone with weak impulse control says yes.

An executive at a food company would openly explain his cost structure when negotiating with distributors. That meant he didn't always get the best deal. He occasionally felt the urge to conceal his costs and make a bit more — but he held it in check. What he got in return was strong, lasting distributor relationships, far better than any short-term gain.

A fiery temper is often seen as a sign of decisiveness and charisma. In Goleman's research, extreme displays of negative emotion have never once emerged as a driver of good leadership.

Motivation: people who work for the sake of achievement bring their standards to the whole organization

There's a kind of passion that isn't about salary, or title, or the company's name. These people want to get things done because getting this thing done is the point.

A manager at a cosmetics company couldn't stand waiting two weeks to see sales results from the field. He found an automated phone system that called every salesperson at five o'clock each afternoon and had them enter that day's calls and closed deals. The feedback time shrank from weeks to hours.

Such people keep raising the bar, and they like keeping score. Goleman knew a fund manager who, at the start and end of every working day, checked his fund's performance against four industry benchmarks.

When the score looks bad, they stay optimistic. Another portfolio manager, after several successful years, saw her fund fall for three quarters in a row, and three large institutional clients took their business elsewhere. Some people would blame the circumstances; others would take it as proof of personal failure. She saw it as an opportunity — to prove she could lead a turnaround. Two years later she was promoted to a very senior position in the firm, and looking back she called it "the best thing that ever happened to me."

The last piece of evidence is loyalty. Because they love the work itself, they feel loyal to the place that makes the work possible — when a headhunter puts money on the table, these are the people more likely to stay.

Standards are contagious. If you've set a high bar for yourself, then when you have power in your hands, you'll set a high bar for the organization too.

Empathy: not pleasing everyone, but factoring other people's feelings into decisions

Empathy isn't much respected in business; the word sounds too soft.

It isn't taking on other people's emotions as your own and trying to please everyone. That way, decisions grind to a halt.

It's something else: when making a hard decision, counting other people's feelings as one of the variables.

Two large brokerage firms merged, creating redundancies in every division. One division manager called his people together and gave a gloomy speech emphasizing how many would soon be let go. Another manager also gathered his people, but he spoke candidly about his own worries and confusion, promised to keep everyone informed, and to treat everyone fairly.

The first manager watched his division's morale collapse as his best people left one after another. In the second manager's division, the best people stayed, and remained productive.

The only difference was empathy.

Goleman gives three reasons empathy matters more today: teams need consensus, and four or five people will split into factions; across cultures, a long silence isn't necessarily a rejection; and when people leave, they take the company's knowledge with them.

For the second, he describes a scene. An American consultant and his team had just finished a pitch to a Japanese client. With Americans, a pitch is usually followed by a barrage of questions; this time they were met with a long silence. The team took the silence as a no and started packing up. The lead consultant signaled them to stop. He wasn't especially familiar with Japanese culture, but what he read in the client's faces and postures wasn't rejection — it was interest, even careful deliberation. He was right: when the client spoke, they gave the team the job.

The first three are about managing yourself. Empathy and social skill are about what happens between people.

Social skill is friendliness with a purpose — moving people in the direction you need, whether that's agreement on a new strategy or getting a group genuinely excited about a new product.

It's the outlet for all the others. Empathy that can't be expressed might as well not exist; passion that can't be transmitted to the organization leaves motivation empty.

An executive in the strategy group of a global computer manufacturer became convinced in 1993 that the company's future lay in the internet. Over the following year, he sought out like-minded people and, across levels, departments and national borders, wove together a virtual community. With this de facto team he built the company's website — one of the first among big companies. Then, with no budget and no formal standing, he signed the company up for an annual internet conference, persuaded multiple divisions to chip in, and rallied more than fifty people from a dozen-plus divisions to attend.

Less than a year after the conference, this group became the foundation of the company's first internet division, and he was formally put in charge of it.

So chatting in the hallway often isn't idle chat. Socially skilled people don't arbitrarily limit the range of their relationships — they know that someone they've only just met today may be exactly the person they'll need next.

Final Thoughts: what you hand over in a succession is a person, not intelligence

Three points.

Smarts and craft are the threshold. Only past the threshold does the gap begin.

The higher the position, the more that gap is about people and the less it's about technique.

This ability can be learned — but the method is the opposite of learning technique: not through understanding it once, but through being seen, being corrected, and doing it again, over and over.

In family businesses, this is especially unforgiving.

The first generation often builds a company from nothing through craft and decisiveness. When it's passed to the next generation, people are still looking for the same kind of smarts. Goleman's research points somewhere else: the higher you go, the more smarts are merely the entry ticket.

What a succession has to hand over is a person who can see themselves clearly, keep a situation under control, and make others want to stay.

I haven't scored myself on the five yet. The self-awareness section is the most grueling — in many rooms, naming your own weaknesses still feels like showing weakness.

That's where I'll start looking at myself. That's where these notes end.

These are reading notes. The research findings in this piece are paraphrased from Daniel Goleman's What Makes a Leader? (Harvard Business Review, January 2004). The figures describe the samples he analyzed; they are not an assessment of any individual or company, and do not constitute management or investment advice.