The critical role of emotional intelligence in consulting

The success of a consulting firm depends almost entirely on two key value-creating resources working interdependently:

Resource 1: The specialist, ‘technical’ knowledge of expert individuals

Resource 2: Valuable relationships with clients

Traditionally consulting firms are very good at developing ‘Resource 1’ because as individuals develop expertise in a specialist area of work, their value to the firm and its clients increases exponentially.

The problem for firms is that Resource 1 and Resource 2 are not mutually exclusive.

For a consulting firm to grow and prosper, their technical experts need to be able to apply their specialist knowledge through on-going valuable relationships with clients.

What’s more, for firms to differentiate themselves on levels of expertise alone is very difficult. Clients will often perceive many firms who could deliver a very similar service.

Similarly, within the firm, it is hard for individuals to distinguish themselves simply by their level of expertise. Peers competing for work will often be just as smart, work just as hard and have just as much experience.

So, if expertise is important but not enough on its own, what truly determines the success of your firm?

It is the ability of your experts to start, nurture, influence and manage relationships with clients. It is how your specialist experts interact with clients to distinguish the firm from other potential service providers and it is how your technical experts react and behave during the essential ‘human’ interaction element involved in providing a service.

In short, the critical factor for success in consulting is not simply expertise (IQ) but emotional intelligence (EQ).

Developing emotional intelligence to progress and lead in the unique dynamics of a consulting firm

It is important not to underestimate the importance of relationships within a consulting firm (not just externally with clients). Indeed, the success of a firm depends not only on valuable relationships with clients but constructive and collaborative relationships between colleagues.

The best-performing firms have teams of individuals who, despite political and cultural dynamics, are able to work constructively and collaboratively in the best interests of the firm as a whole. The critical factor for building consensus, finding common ground and taking decisions – even with complex partnership dynamics – is emotional intelligence.

i. Using EQ to build ‘social capital’ and progress within a consulting firm

Developing ‘social capital’ is essential for individuals who want to progress in a consulting firm. Social capital is defined as “the value created by leveraging knowledge that is embedded within social networks and interrelationships.”

Put simply, your social capital often determines your level of authority, reputation and credibility in the firm because it enables you to build trust, increase status, access more resources and gain greater commitment from colleagues.

The key to building social capital is an ability to form vibrant, creative and trusting relationships with colleagues. Fundamental to this endeavour is emotional intelligence.

ii. The importance of EQ to lead a consulting firm

Leading a consulting firm is complicated by the cultural and political dynamics found in many organisations. Developing EQ to navigate these dynamics successfully is essential for any current or future leader of the firm.

Leaders of consulting firms often sacrifice their individual power when assuming control as they pass on their valuable client relationships to colleagues and don’t necessarily continue to develop their technical expertise.

Despite giving up power and in the absence of a typical ‘hierarchical structure’ of leadership, leaders must have the emotional intelligence to negotiate with individuals, make decisions, gain consensus, influence colleagues and maintain collegiality among the group.

Knowing how to manage these difficult interactions, to take unpopular decisions and to maintain influence requires a great deal of political nous and emotional intelligence.

Why is Emotional Intelligence still underdeveloped in many consulting firms?

It is surprising to find that while many consulting firms continue to invest heavily in ‘technical skills and expertise’, relatively few firms put similar emphasis on building the soft skills that create loyalty, mutual trust and valuable relationships between clients and service providers.

So why is EQ still not given equal billing? Some reasons are perhaps more obvious than others.

As specialist subject matter is regularly changing – such as new legislation or new technology – subject specialists clearly need to stay on top of these changes to maintain their ‘expert’ status.

Within the firm, developing specialist knowledge makes experts indispensable and increases their level of both autonomy and authority and when considering senior promotions, it is perhaps easier to distinguish between individuals based on their level of knowledge and expertise rather than their emotional intelligence. Thus, it is easy to understand why technical expertise development takes precedent to soft skills.

What’s more, the prevalent career path in many consulting firms promotes a development of technical expertise rather than emotional competence.

Early in their careers, junior consultants find themselves valued for their generalist abilities but, as their careers progress, they are increasingly encouraged to become specialists and are indeed praised and promoted for success in their field. The end result is that individuals can end up too narrow and too specialised without spending enough time developing the emotional intelligence required for success in professional services.

We also believe that an under-development in emotional intelligence within firms stems from a misunderstanding of what emotional intelligence actually is. Within firms it is frequently misinterpreted with labels such as ‘self-confidence’, ‘initiative’ or ‘charisma’. We would argue that these adjectives actually describe innate character qualities or ‘talents’ – not emotional intelligence.

Emotional intelligence is a skill because it can be trained, practised, developed and improved. Ultimately, everyone can choose to learn and refine the core skills and behaviours associated with emotional intelligence. As Seth Godin has previously written: “realising that [something is] a skill is incredibly empowering and opens the door of possibility.”[ii]

Give emotional intelligence the status it deserves in consulting

The critical factor for success in consulting is not simply expertise (IQ) but emotional intelligence (EQ). While technical knowledge and expertise are prerequisites, the ability to start, nurture, influence and manage relationships both externally with clients and internally with colleagues is what will differentiate your firm and your people from the rest.

While knowledge and experience can get individuals ‘through the door’, an ability to listen, adapt, collaborate, empathise and build trust is what will set a firm apart from competitors and individuals from their peers.

Giving employees the opportunity to learn, practise and develop emotional intelligence will lead to clients actively seeking out a consulting firm to solve their problems and demonstrate to existing clients they are a trustworthy partner to whom they can refer their own contacts. In an industry where 84% of new business comes from referrals[iii], emotional intelligence is more important than ever.

It is time for consulting firms to recognise that there is nothing ‘soft’ about soft skills.

Written by William Johnson, Managing Director of PSfPS, as part of Emotional Intelligence for Professional Services Programme.

“The Oxford Handbook of Professional Service Firms” (2015) edited by Laura Empson, Daniel Muzio, Joseph Broschak, Bob Hinings, Oxford University Press

[ii] Seth Godin, “Skills vs. Talents” 23rd September 2016

[iii] Laurence Minsky and Keith A. Quesenberry “How B2B Sales Can Benefit from Social Selling” Harvard Business Review 8th November 2016