In 1992, AEFA researched why only 28 percent of customers the company advised had purchased life insurance. The official answer, it seemed, had little to do with policy coverage and cost. Rather, there appeared to be a direct correlation between the emotional intelligence of the company’s financial advisors and business success. It was hypothesized that if financial decisions are driven by emotion (pride, trust, a sense of security), and not just facts and figures, then developing the emotional competence (EC) of financial advisors just might drive more insurance policies.
Financial advisors who became more receptive to a client’s emotions were better able to discuss the relevance of a life insurance policy. For example, a financial advisor might not only talk about financial goals, but also how they can work together as a team, which helps build the client’s trust.
One year later, the company launched a program designed to help managers develop a greater awareness of their own emotional reactions and those of their clients, and to more fully appreciate the role of emotion in the workplace.
Kate Cannon is AEFA’s former director of leadership development and president of Minneapolis-based Kate Cannon and Associates, a consulting and training firm in the area of emotional intelligence. She says the EC program was developed to help leaders carry the company into the future. "So much had changed, we needed leaders who could support the business—leaders who were flexible and adaptable, who could develop relationships. There was a whole set of new characteristics that turned out to be based on emotional competencies."
The company went through an evaluation process to identify the appropriate competency model. The in-house psychologist and program officers then developed a program covering all five domains of emotional intelligence: self-awareness, self-management, interpersonal effectiveness, social skills and empathy.
A follow-up experiment found that, as a group, the 60 or so financial planners who went through the original program outperformed their associates hands-down. "There’s a lot of emotion around the financial planning process," says Pam Smith, program manager for the company’s Emotional Competence Program. "One way to build a better relationship with clients is to understand what emotions are driving their decisions."
Soft-skills training creates better managers.
A more recent evaluation study suggests that participation in the program has contributed to an increase in sales revenue. For example, advisors of managers trained in emotional competence grew their businesses by 18.1 percent compared to 16.2 percent for those whose managers were untrained. "Individuals who have gone through our program have certainly seen that emotional competence applies not only to their professional lives, but to their own personal growth and development," says Smith.
In fact, 88 percent of AEFA leaders who have completed the training say EC is important to job performance. And a July 1998 survey of human resources professions at Fortune 1000 companies would seem to concur that interpersonal skills are vital to an organization’s overall success. The survey, conducted by the Memphis-based communications firm O’Connor Kenny Partners, asked HR directors to rank the importance of training in 10 different communication skills. Interpersonal skills ranked highest, along with such other emotional competencies as listening and persuasion.
As of January 1996, every new financial advisor at AEFA must complete an emotional competence program as part of the training at the American Express Financial Advisors University in Minneapolis. The six-day session starts with how to recognize and talk about emotions, and how emotions affect people, especially in the workplace. Scattered throughout the rest of the program are courses on relationships and communication skills, and work/family balance. "We focus on creating greater success in our personal and professional lives through learning more about ourselves and communicating better with others," says Smith.
Program costs can vary from business to business.
AEFA now employs more than 8,000 individuals and 9,000 advisors, and holds more than $210 billion in assets in the financial services industry. And since 1992, the company has provided training to roughly half of its field and leadership teams. Still, it often takes months or even years before someone effects change to his or her behavior. Ideally, you want employees to try out their new behavior on the job where it really counts. In the past at AEFA, it’s been a one-shot deal—a six-day training session and zero follow-up. Only recently have efforts been made by senior executives to incorporate EC training into some sales conferences and some quarterly performance reviews.
Still, the cost for setting up the program isn’t cheap. Cost per person can average anywhere from $100 to $1,500, based on the duration of the program and the instructor (and that’s not counting the millions of dollars American Express spent to implement the program). Advisors typically pay for the cost of the program, while the company subsidizes the course entirely for employees. "But that’s a relatively small investment compared to the potential return," says Cannon. "In my 25 years of going through a million training programs, EC is the only one I know that has a positive impact. It produces behavioral changes at an individual level, which has an impact on everyday life."
Last year, American Express conducted an extensive survey on employees who have gone through the program. More than 90 percent said the training was relevant to their jobs, and more than half of those surveyed said the training had a "significant" impact on business.
As author Goleman points out in his book, Emotional Intelligence: Why It Can Matter More Than IQ (Bantam Books, 1995), workplace rules are changing and everyone’s being judged not just by how smart they are, but also by how well they handle themselves and others. It’s a lesson clearly articulated at the corporate offices of American Express.
"You can change your emotional competence over a lifetime through purposeful activities, maturity and experience," says Smith. "That’s why our leaders are trained first on emotional competence—so they can be more effective in relationships that benefit everyone—employer, employee and client."
Workforce, July 1999, Vol. 78, No. 7, pp. 72-74.