Mr. Personality

A personality expert talks character and destiny.

EQ-nomics: Can Emotional Intelligence Beat the Recession?

EQ vs IQ the battle revisited

Most people care more about emotional intelligence (EQ) than IQ -- unless they are IQ researchers. Although the reality is that IQ is a much better predictor of career success than EQ is (and I can already see the angry comments about IQ not measuring our real intelligence), the research evidence is actually based on a limited aspect of career success.

Indeed, most studies on the predictive validity of IQ have examined correlations between IQ tests and performance "on the job", but the jobs consisted mainly of being employed by someone else, and performance was operationalised primarily in terms of supervisory ratings. Of course, higher EQ should make supervisors rate you more highly (and there is a 2004 meta-analysis showing just this -- one of the authors is Vishveswaran I think). But does IQ matter when performance is not about following a pre-defined, trained, formal set of job-related behaviours? Consider this: most studies on IQ and job performance show that the main reason why the former predict the latter is that individual differences in cognitive ability (as assessed by IQ tests) are related to faster and more efficient learning -- indeed, the effects of intelligence on job performance are usually mediated (explained) by training (we review this literature in our Personnel Selection book of 2010).

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In a great book on entrepreneurship, Shane notes the following facts: (a) approximately 40% of people in the US would rather not be employed (that is, they would prefer to work for themselves than for anybody else -- which is consistent with the well-established fact that most people quit their jobs because they cannot stand their bosses); (b) current employment trends -- and this has been the case since the 1980s -- emphasise employability over job loyalty; however the paradox is that most employers make their employees more employable, which encourages them to leave; (c) changing jobs often, being unemployed, not liking your job, are some of the main reasons for starting a new business; finally (d) the number of business start-ups has been growing by almost 5% per year in the US, and these businesses (if they survive, of course) will contribute more to the economy in terms of growth and employment, than old established businesses.

In a recent study we tested the relationship between entrepreneurship and emotional intelligence. You can still take part and see how you score on both traits. The results, which will be published in a scientific journal soon, show that emotional intelligence makes a significant contribution to entrepreneurial success. Contrast this with another study (currently running), where we found almost no correlation between IQ and entrepreneurship... Although this may not surprise you, that is only because you dislike the fact that IQ tests have been shown to be robust predictors of success in virtually every domain of life.

However, when it comes to creating new business ventures and adding value to the economy, it may seem that Goleman et co got it write. For those of you who don't recall this, Daniel Goleman made an over-the-top claim in his 1995 book on Emotional Intelligence when he concluded that, since IQ only explains 20% of the variance in career success (fact), EQ explains 80% (insane!). Yet he was onto something because most of us know so many people who would probably score high on an IQ test and even do brilliantly at school and university, but are nevertheless socially and occupationally inept. Goleman's book caused popular furore first, and a business revolution later -- in fact, it even created an explosion of academic research in the area of EQ. However scientific attempts to demonstrate the importance of EQ over IQ in the realm of career success have failed completely.

If EQ predicts entrepreneurial success better than IQ, and as many as 40% of people swap traditional jobs for entrepreneurial careers, is EQ not as important as IQ? Finally, consider the following: in the era of digital knowledge, with high levels of supply of both human capital and information, most desirable jobs involve dealing with abstract concepts -- selling ideas, creating things, discussing problems. As Sternberg noted in a little book (Successful Intelligence, 1996?), most of these problems are ill-defined, so they are quite different from the problems we solve in an IQ test. Perhaps this is why there is so much emphasis today on social, inter-personal, intra-personal, and emotional skills. Can we still persuade managers to hire on the basis of IQ? And if people decide not to be hired, can their success really depend on their EQ?

To find out what your EQ, IQ, and entrepreneurship scores are, take our very short free tests and get instant feedback!

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Tomas Chamorro-Premuzic, Ph.D., is a Professor of Business Psychology at UCL and NYU. He studies online dating, entrepreneurship, and consumer preferences. more...

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