Probably one of the most important concepts in any business is to control emotions. It is emotion that is critical in creative thinking and self-motivation. However, un-controlled emotions are a liability. Nothing destroys economics more than emotions. I learned this concept in college, but have seen it played out with many companies I have managed as their financial support, time-and-time again.
It is understood that emotions cloud decision making. For example, a practice within real estate sales is to make the buyer “fall in love with the property.” Help the buyer visualize themselves in the home. I have heard of real estate agents baking cookies so home visitors feel welcomed, during open houses.
In the end, if you bid on the property, it is advisable to know the maximum price you are willing to pay for it, and know when to walk away from the deal. If you get wrapped up in the moment, you risk bidding beyond your means.
Clearly with respect to personal situations, we try to control emotions. But when the question turns to emotions in business, there are two very different points of view –
In business you should be emotionless. Inherent in business are successes and disappointments. If things do not go your way, an objective solution is preferable to a subjective reaction.
If you find your company in a situation where profits are eroding, emotions should play a lesser role. The best approach is to assess the situation, think of the options to solve the problem and chose the solution with the highest return and least probability of failure. This approach is essentially mathematical.
The absence of emotions also can help when implementing fixes to your current business model. You will be required to look at a business, and identify waste and inefficient processes. At times the solution will have a negative impact on current employees either through their termination or a change to their job. Having an emotional attachment will make it difficult to deliver bad news to the employee.
Counter point – Controlled emotions are not just acceptable but required to be successful. If you are responsible to develop relationships and build trust, being devoid of emotions is not conducive to this goal.
Internally you will be required to build partnerships and motivate individuals within the organization, for the good of the company. Employee involvement is important to the success of this endeavor. Externally you must reach out to current customers and prospective clientele, to build relationships, for future business opportunities.
A turnaround requires more than just a great plan. A turnaround requires flawless execution. Emotions are useful to create trust, drive passion and helpful to motivate staff.
So what is the correct mix? There are many tests that measure an individual’s approach in life. IQ (intelligence quotient) measures an individual’s capacity to learn reason and apply that knowledge. EQ (emotional quotient) measures an individual’s ability to read a situation, and apply intuition. A high IQ, combined with a high EQ would seem to be the recipe for a highly successful individual in business.
There is a theory that building a team is made easier if you know the IQ vs. EQ mix represented by each team member. In this way teams could be assembled with individuals that complement each other’s natural abilities.
But regardless of how you decide to proceed on the issue of emotions, keep in mind that the top reasons for employee law suits against businesses fall into the following categories – discrimination (sex, race, disability and national origin), harassment, retaliation against a whistleblower and wrongful termination. In every situation, emotions play a role in these claims, as the employee feels they were wronged. Valid claims or not, litigation is painful, expensive, and should be avoided. Emotions throughout the organization should be controlled.
What are your thoughts?
This passage is an excerpt from my book, written in 2014 — “Redesign to Turnaround Underperforming Small and Medium-Sized Businesses” available via Amazon.© Copyright 2014 Regis Quirin, All rights Reserved. Written For: CFO Tips - What you need to know, to be a CFO TODAY!