China’s Secret Weapon
Travis Bradberry 11.14.05, 12:00 PM ET
“Made in China” doesn’t mean what it used to. Manual labor from the country’s 1.3 billion citizens was long considered its sole competitive advantage in the global economy. While American business has turned a blind eye, the country’s burgeoning skilled workforce now stands as its biggest competitive threat. How did this happen?
Too much Wal-Mart (nyse: WMT – news – people ).
Americans love to fixate on their largest (in terms of sales) company, and, when it comes to Wal-Mart and China, their focus is stuck on the cheap labor that brings $25 billion annually in Chinese goods. Today, Chinese business is powered by the leadership required to take hold of sectors like finance, telecommunications and computing. Surprised?
You shouldn’t be. A year has already passed since Lenovo acquired IBM’s (nyse: IBM – news – people ) personal computing division, and today U.S. investors are scrambling to get in on the biggest initial public offer of 2005, a Chinese bank with $521 billion in assets. This IPO marks the first major Chinese financial institution to offer shares overseas, and, despite its tremendous size, it’s only the third-largest bank in China. The sleeping giant is stirring.
What are business leaders in China doing that Americans aren’t? A great question and one that TalentSmart researchers grew tired of asking each other. So, they spent the summer measuring the leadership skills of 3,000 top Chinese executives from the public and private sectors. The executives completed the Chinese translation of the American EQ test, the Emotional Intelligence Appraisal . The researchers compared the Chinese executive’s scores, to those from a matching sample in the U.S.
Emotional intelligence, or EQ, has been the subject of a flood of research during the last decade. It’s the single-biggest predictor of a leader’s success, regardless of industry. EQ is that “something” that is a bit intangible in each of us. It gives a succinct name to how we manage behavior, navigate social complexities and make decisions that achieve positive results. And today, it can be measured.
The TalentSmart study revealed American executives lag far behind the Chinese in the two, most critical EQ skills: self-management and relationship management. In a nutshell, these skills amount to a key ingredient in China’s economic success and a serious threat to America’s ability to compete in the global marketplace: discipline.
American executives average 15 points lower than the Chinese in the EQ skills that have the strongest ties to job performance. Scores in self- and relationship management capture an executive’s ability to use emotions to his/her benefit in managing time, making sound decisions and relating to others. It appears that Chinese executives use these skills to their benefit at work–and in business, actions speak louder than words.
What is it, specifically, that Chinese executives are doing that Americans aren’t? They are living the qualities that American executives only pay lip service to. The typical American leader is not willing to expend much energy in seeking feedback, getting to know his or her peers and following through on commitments for the sake of others. Making business personal is nothing new in China. Executives ordinarily schedule dinner meetings with their staff to talk about business trends, career aspirations and family. People expect their leaders to set an eminent example in how they make decisions, connect with others and improve. There is genuine shame in not fulfilling these duties because people really care about them–everyone knows it’s important.
What we aren’t doing naturally in America, we can only learn. To the credit of U.S. executives, their appetite for learning is strong, but the opportunity must be provided. A 1998 article covering leadership and EQ in the Harvard Business Review was the most popular read in the magazine’s 40-year history. HBR will run another piece on EQ in December–focusing this time on the precipitous decline in EQ scores for leaders holding director titles and above.
The most successful leaders maximize their EQ, for it is the one who employs a blend of reason and feeling who earns the greatest results. And unlike regular intelligence, or IQ, EQ is a flexible skill that can be developed. I’ll be honest, for most leaders increasing their EQ is not quite as much fun as reading The Da Vinci Code, but they learn something that is easily applied each day toward reaching their professional goals.
Travis Bradberry, Ph.D., is co-author of the Emotional Intelligence Quick Book . He is the president and co-founder of TalentSmart , a provider of emotional intelligence tests and training.