CHAPTER II
EMOTIONAL QUOTIENT (EQ)

Why do people with average IQs outperform those with the highest IQs? In his book, Emotional Intelligence: Why It Can Matter More Than IQ, Dr. Daniel Goleman, an expert on brain and behavioral sciences, addresses emotional quotient (EQ) versus IQ.1 EQ provides the evidence that being smart is not just a matter of mastering facts or equations; it requires mastering your own emotions and understanding the emotions of the people around you. EQ is a better predictor of success, quality of relationships, and overall happiness.

EQ is about your relationships:

• Your relationship with yourself (self-awareness/adaptability)
• Your relationships with your colleagues (collegiality/collaboration)
• Your relationships with your clients (empathy)

I think of EQ in terms of adaptability, collegiality/collaboration, and empathy, or ACE.

ADAPTABILITY

Attributed to Charles Darwin, English naturalist and geologist

Let's start with adaptability. There is constant change in professional services firms. Competition changes; just ask those who were once at Lehman Brothers, Bear Stearns, or Arthur Andersen. Technology changes; when I started at Morgan Stanley, there was one computer that used punch-cards for data entry. Leadership changes; Wall Street firms periodically reorganize. Regulations are replaced; for example, Dodd-Frank and the Volcker Rule have caused important strategic and structural adjustments. As a result of all these changes, adaptability is critical to success in professional services.

Your ability to adapt begins with the awareness of where you are and that you will need to change at certain points in your career. Self-awareness is your ability to recognize your emotions and how they affect your thoughts and behavior, as well as understanding your strengths and weaknesses. Self-awareness can help you to adapt to the array of different bosses with different working styles you will encounter throughout your career.

You inevitably will work on different types of projects or different types of products. You will work with an array of different clients with different personalities. For example, when a new CFO joins a client, the incumbent bankers are guilty until proven innocent. This means that the incumbent bankers need to prove themselves to the new CFO. If you are one of those incumbents, you will need to be aware of how the new CFO perceives you and be able to adapt to the new CFO and a potentially new finance team.

As you move up the corporate ladder, you will need to adapt to different roles and responsibilities. What made you a great associate will not make you a great vice president. It is hard to be on the road covering your clients as a vice president while still trying to do your own spreadsheets or research like an associate.

Almost invariably, if you look at the job specifications or performance evaluation form for vice president, you will find that what got you the promotion is not enough to get you to the next level. In What Got You Here Won't Get You There, author Marshall Goldsmith explains that your success and accomplishments to this point will not get you where you want to go.2 You have to adapt in order to continue advancing your career.

ADAPTING TO ADVERSITY

Benjamin Disraeli, British politician and writer

Ben Franklin is famous for his wisdom and knowledge. He said that there is nothing certain except death and taxes. I agree, but he forgot to include adversity. Everyone has personal and professional setbacks. I have seen co-workers have emotional outbursts or become almost catatonic when they missed a promotion, lost a deal, or were dealt some other negative surprise. In some cases, they spent so long in their funk that it damaged their career or reputation.

According to the American Psychological Association, resilience is your capacity to deal with stress, adversity, and uncertainty. Resilience is about bouncing back, rolling with the punches, or at least acting as if you have absorbed the issue and are moving ahead. Resilience can help you feel or look as if you are in control. With the proper perspective, you can deal with uncertainty or disappointment as a professional rather than acting like a victim.

Developing a mindset of optimism and making persistence a habit also improves your ability to deal with setbacks.

My experience has taught me that resilience can be developed and strengthened if we make it a priority. Having a strong network of positive relationships is a vital foundation for resilience. Positive social support is associated with better performance and well-being, particularly in times of stress. Do not wait until there is a crisis, but start now to methodically extend your circle of positive relationships. The people around us can have a significant impact on how we handle challenges.

Your ability to adapt to adversity is also influenced by what you do to stay in shape-physically, emotionally, and spiritually. Proper exercise, sleep, and lifestyle will make you more resilient and able to release stress when it occurs. You can't predict upsets, but you can be prepared for them so you can adapt and bounce back rather than overreact.

COLLABORATION

Vince Lombardi, Hall of Fame football coach

Did your kindergarten teacher ever praise you by saying that you "work and play well with others?" Through collaboration, a team can achieve better results than any individual could have achieved alone.

Collaboration is essential in professional services firms because the work is done primarily in an environment in which a team is united in a common purpose and team members respect each other's abilities and perspectives.

James Surowiecki's book, The Wisdom of Crowds, offers the simple idea that groups of people are smarter than an elite few, no matter how intelligent, innovative, or clever at problem solving the few are.3 Surowiecki compares the traditional method of decision making by a small group of experts with the method of organizing a large group of ordinary people. He found that ordinary people can avoid the weaknesses of the expert group and thus make better decisions and predictions. He highlights the weaknesses of traditional decision making, in which specialized experts in small, deliberative groups are assumed to be better able to make effective decisions.

The world of professional services is only becoming more collaborative. Teams are global and diverse. The workplace is virtual. There are larger teams collaborating to solve increasingly complex client problems. Often, these teams bring together expertise across products or across industries. We frequently rely more heavily on support from corporate functions like finance, internal legal, marketing, and so on. In the past, you might see a smaller deal team of bankers and one or two internal lawyers. With today's complex deal structures, it is very common for a deal team to include one or two people from up to eight different groups within a firm, like accounting, foreign exchange, commodities, technology, legal, and corporate communications.

In order to succeed in a professional services firm today, you need to work well with your colleagues so that the entire team succeeds.

EMPATHY

Atticus Finch in To Kill a Mockingbird (1962)

Empathy is understanding what others are feeling because you have experienced it yourself or can put yourself in their shoes. Empathy allows you to build trust with your clients.

People starting out their careers in professional services think that figuring out the answer is the hard part of the job. In professional services, we are all in the solutions business, but finding the right solution is often not the difficult task. Experience has taught me that if a client tells me the problem, we have enough smart people working in a collaborative environment that we will always come up with a thoughtful response. The real challenge is getting the client to tell you the problem.

If I missed a piece of business for a client, it was not because the client did not know me or I was not smart enough. I missed the business because the client never gave me a shot at answering the question. Either the client did not think of calling me or did not trust me enough to share what was on his or her mind. The key to winning business is getting the client to trust or like you enough so they will tell you the issue on their mind.

Building a relationship of trust and openness can take years, but it pays dividends. I worked with one client for years on a mergers-and-acquisitions concept that never materialized. But over that time, I gained the client's trust because I listened and was reliable. That client ultimately awarded our firm with the lead underwriting role in the largest initial public offering in history at that time.

How...