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10.13007/217

Ideas for Leaders #217

Decision-Making With Emotional

Intelligence

Key Concept

Decisions, especially decisions involving risk, are often guided by emotions,

such as anxiety, that in fact emerge from completely unrelated events.

Emotionally intelligent leaders are less likely to make a mistake with

“incidental” anxiety because they recognize the irrelevant source of their

emotions. Leaders can also help others reduce the impact of incidental

anxiety by simply pointing out the true source of their emotions.

Idea Summary

Emotional intelligence — the awareness and understanding of emotions —

has a variety of workplace applications and benefits. Leaders who perceive

and relate to the emotions of those they direct are going to be seen as more

caring and understanding leaders. Leaders who can better manage their own

emotions will also develop more positive relationships with subordinates and

superiors. Finally, emotionally intelligent negotiators have been proven to be

more effective.

One important facet of emotional intelligence is not only the ability to perceive

and attend to the existence of emotions but also the ability to understand the

sources of these emotions. “Emotion-understanding ability” allows you to

analyse the cause-and-effect relationships between emotions and events,

both backward (identifying the past event that caused the current emotion)

and forward (predicting the emotions that will result from current or future

events).

This ability is neither as obvious nor prevalent as it may sound. Many of us

attribute our emotions to the wrong causes. For example, imagine an investor

who is involved in a car accident on his way to work. If he has low emotion-

understanding ability, he might attribute his anxiety to an upcoming business

meeting instead of to its correct cause, the car accident.

This anxiety is an example of an “incidental” emotion — an emotion that

arises out of environmental factors, whatever they may be, and is unrelated to

the current decision or situation. In their research, Jeremy Yip of Yale

University’s Centre for Emotional Intelligence, and Stéphane Côté of the

University of Toronto’s Rotman School of Management, used experiments

involving incidental emotions to show that emotion-understanding ability

facilitates decision-making.

The experiments built on previous research that showed the negative effects

of incidental anxiety — as exemplified in the investor story above — on risk-

taking. People are less willing to take risks because of anxiety that is

unrelated to the risk.

Authors

Côté, Stéphane

Yip, Jeremy

Institutions

University of Toronto Rotman School of

Management

Yale University

Source

Psychological Science

Idea conceived

January 2013

Idea posted

September 2013

DOI number

Subject

Leadership

Decision Making

Emotional Intelligence

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In their first experiment, Yip and Côté demonstrated that participants with

lower emotional-understanding ability let incidental anxiety negatively impact

their risk-taking more than participants with higher emotional-understanding

ability. Their second experiment revealed the why of the first experiment

results: Yip and Côté proved that lower emotional-understanding ability

increased the negative impact of incidental anxiety because participants didn’t

understand the source of their anxiety. Once participants with lower

emotional-understanding ability were told their anxiety was irrelevant to the

decision, the effect of incidental anxiety on the decision decreased.

Business Application

Emotional Intelligence has been front and centre in the leadership

conversation since the publication of Daniel Goleman’s groundbreaking

bestseller, Emotional Intelligence. This new research, however, shines a light

on a facet of emotional intelligence that is often ignored, and yet has

important leadership and professional development implications.

Leaders must not allow incidental emotions to colour their decision-making,

especially involving risks. Leaders are often warned to pay attention to

assumptions and biases. This research helps leaders address “affect-driven”

biases — biases that emerge from incidental emotions and impact decision-

making. Heading into a meeting that involves some major decisions, the

anxious investor we met earlier is less likely to take risks, even calculated

risks, precisely because of his anxious state. If before the big meeting,

however, he explicitly recognizes that his anxiety is related to the car accident

(because he’s wondering how he’s going to pay for the damages and what

will be the impact on his insurance rate), he will not let that anxiety guide his

decisions or attitude in the meeting.

Leaders must also help their subordinates, whether employees or managers,

to disarm affect-driven bias. Identify those with lower emotional intelligence

and point out the root cause(s) of the emotions that are impacting their

decision-making capabilities.

Further Reading

“The Emotionally Intelligent Decision Maker: Emotion-Understanding

Ability Reduces the Effect of Incidental Anxiety on Risk Taking,” Jeremy

A. Yip and Stéphane Côté, Psychological Science, January

2013. DOI: 10.1177/0956797612450031

Further Relevant Resources

Stéphane Côté’s profile at Rotman School of Management

Jeremy Yip’s profile at Yale Centre for Emotional Intelligence

Rotman School of Management Executive Education profile at IEDP

© Copyright IEDP Ideas for Leaders 2013

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