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What is Emotional Intelligence awareness? Put simply, EI is you -- the contracts professional -- building relationships with all parties to the contract by doing everything possible to ensure parties’ expectations are met and to achieve the desired result.

As humans, we all have EI. With effort, we can align intelligence with emotion in contracting actions, but it takes some extra awareness and steps to produce smart strategies. This article takes a look at what this entails.

First, by definition, EI is the “capability of individuals to… 

  • recognize their ownemotions and those of others;
  • discern between different feelings and label them appropriately;
  • use emotional information to guide their thinking and behavior; and
  • manage or adjust emotions to adapt to environments or achieve one's goal(s).”1

When you have EI awareness and allow it to filter through all your relationships, the success of your contracting efforts moves beyond the documentation level, and reaches across the implementation, dispute resolution, and the continual improvement and development stages – even beyond its expiration date – to give all parties in the contracting process the level of success they seek.

Benefit to all - By harmonizing your EI with your contracting practices, you seize opportunity and growth at a much higher level than you might expect. You energize people to work with you to transform your contracting processes and technology into a deeper level of doing business together.

Challenge to all -- I've seen repeatedly how partnerships that had been well established at the beginning of the relationship tear apart later. The breakdown too often sparks -- not necessarily by serious issues -- but by a disconnect in views or thoughts that destroys a relationship if unmanaged -- regardless of whether it is between buyer and seller or company and customer.

Role of EI is to be the competency that automation cannot imitate or authenticate.   While our organizations worldwide are plunging into digital transformation hoping to raise our market shares – we need more than ever to make sure our EI is implemented specifically to resolve the emotional challenges.

It’s great that our contracting processes have been simplified by technology or artificial intelligence (AI), and technology cuts down our time. Time saved allows us to put more effort into strengthening core strategic activities. We can then rebuild vital relationships with partners and stakeholders who require EI competency to enable our processes to become interconnected with all parties and prevent problems like the ones described in our two case studies below. (Names of people described below are fictional and used only to illustrate that these stories could be our own!)

WHAT CAN HAPPEN WITH EI in spite of past losses?

First case study – how loss of trust was recovered

Peter, a contract manager from a US multinational food manufacturer met with Somchai, a local business partner in Thailand, to discuss the potential of bringing a novel product line to the market. Peter was energetically confident of his company's innovation and its product development which he pitched incessantly to Somchai.

Somchai remained silent, commenting very little. Although Peter was eager to clinch the deal he did not care about Somchai’s intention or need. The deal failed. No contract was signed. Peter returned to US angry and empty handed.

Later, a new business manager at the same company, Julie, and her coworker, Chad, decided to bring the company's new development again into Thailand. When she met with Somchai, she spoke briefly about her company's new development, then spent the rest of the day asking Somchai questions about the local food industry and getting his perspective and advice about it.

Somchai later took her and Chad to the food chains that were under his authority. Over the next six months, Julie sent Somchai samples of her company's redevelopment which she carefully fine-tuned to fit Somchai’s feedback. Within a few months, Julie signed a contract with Somchai.

This case study illustrates Julie’s high EI awareness -- the intuitive ability to identify cultural differences, read on cues, sense the emotions of others and take interest of others' concerns. All are essential to making wise business decisions and build relationships.

WHAT CAN HAPPEN WITHOUT EI?

Second case study – lack of self-awareness lost the deal

According to Emotional Intelligence, Harvard Business Review2, emotions are part of rationality, not opposed to it. Amid the plethora of hard data available with technology, we must, more than ever, become aware of our own feelings and motives before we can accurately and efficiently understand and judge contract data – or, frankly, any data.  

Chad was assigned to oversee the distribution of the new product line to Thailand. Dang, Somchai's brother, assisted him to build up the marketing campaign. The process was more tedious than anticipated, and with the differences in culture and language, misunderstandings occurred frequently.

As the deadline of the product launch loomed near and with still much to be done, Chad was getting increasingly frustrated, and at one point he lost his temper with Dang in front of all the workers. Dang felt immensely humiliated and informed Somchai about it. The next day Somchai terminated the contract.

Anger and subsequent rage leads to impulsive and irrational action. After a brilliant win on the contract award, the deal had unfortunately fallen apart due to Chad's lack of self-awareness and management of own emotion. The stress from the desire to meet the product launch deadline had caused Chad to become unaware of his own emotion and that of others.   His lack of ability to manage himself allowed his disruptive emotion to take control. (This kind of problem is analyzed with deeper detail in a Primal Leadership, Harvard Business Review article titled The Hidden Driver of Great Performance.3)

At some point we all will experience a disagreement like Chad’s, and we must be aware of our own emotions before we can refocus to a more objective attitude. Self-management enables us to be authentic and transparent which help builds trust and rapport. We get positive results when we remain open to others about our own feelings surrounding an incident and jointly brainstorm ways to achieve a workable outcome.

If Chad had realized his anxiety to meet the deadline, he could have communicated with his company and partners to extend the deadline, solicit more resources, and collaborate to help relieve his burden. Being open to others about our own vulnerability also creates opportunity to inspire a common vision.

Self-awareness, self-management, social awareness, and relationship management are closely intertwined as a collective EI3 to act wisely to cultivate an environment of trust and cooperation. That is precisely what a contract is all about - partnership.

When you become aware of your emotions, you would be inclined to see them in others and to manage the outcome accordingly. Self awareness also promotes a greater sense of empathy for how others feel and think. This sharpens one's sense of the environment, attunes one to speak and act appropriately and builds up the relationship.

Digitalization, globalization and diversification of the workforce is escalating and will only expand more. And more than ever, strong EI will be a “must” to successfully navigate through the ever-increasing worldwide challenges (such as the COVID-19) that threaten the survival of companies and people. The ability to think clearly amid pressure, and to make wise business decisions that uplift business relationships and companies will become a critical skill for modern day success.

It comes down to this: contracting is much more than a paper transaction. It is a transformed relationship and partnership that result in contracting success. To ensure continuity of contract development, the ability to manage a relationship well is critical: it requires a strong EI awareness of the contract relationship manager to build, steer and interconnect skillfully between partners and stakeholders.

END NOTES

  1. Wikipedia definition of Emotional Intelligence. See also article titled, What is emotional intelligence – EQ or EI is: by Institute for Health and Human Potential (ihhp: Copyright ©2019 The Institute for Health and Human Potential. All Rights Reserved.)
  2. How Emotional Intelligence Became a Key Leadership Skill, Andrea Oveans, Harvard Business Review, April 28, 2015.
  3. Primal Leadership – The Hidden Driver of Great Performance, Daniel Goleman, Richard E. Boyatzis, Annie McKee, Harvard Business Review, December 2001

ABOUT THE AUTHOR

Yvonne Sophia Low has been a professional in strategic sourcing procurement and vendor partnerships for 15 years, during which she added significant value to various multinational corporations (MNCs) in transformative projects focusing on cost and contract optimization, excellence and effectiveness, processes and risk mitigation. Recently she dedicated her time to humanitarian initiatives by writing two books for the underprivileged community. She can be contacted via https://www.linkedin.com/in/yvonne-sophia-low.

END NOTES

  1. Porter’s Five Forces analysis. See also related article titled Understanding Competitive Forces to Maximize Profitability.
  2. Business Development & Licensing Journal, Andrew Gottschalk

 


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Yvonne Sophia Low, Business Partner, Negotiator, Certified Procurement, LLM


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