What We Can Learn From Apple on the Importance of IQ vs EQ for Executives

In 1985, one of the biggest executive showdowns in history became public when Apple’s board of directors was forced to take sides between then-CEO John Sculley or founder Steve Jobs. Most of us know the outcome: Jobs was ousted, while Sculley continued to grow Apple until his departure in 1993.

While the story is an old one, Jobs’ later success after he returned to Apple has caused it to often resurface as an inspiring tale about finding success after failure. But perhaps more interestingly, it’s also the story of a company having to weigh IQ versus EQ in its top executives, a story that is likewise re-surging in board rooms around the world.

While Jobs was a brilliant technologist, he had a reputation for being temperamental, difficult to work with, and singularly-focused on his passion projects. Meanwhile, Sculley knew little about computers, but had been brought to Apple for his leadership skills, including his marketing prowess and experience balancing the needs of multiple stakeholders.

In the beginning, Sculley and Jobs had been great friends. But in 1985, their views of the company diverged. Jobs was passionate about building the Macintosh, and wanted to divert the majority of Apple’s resources to promoting it, despite a negative reception in the market. Meanwhile, Sculley felt the company as a whole had a greater need to focus on the Apple II, a more commercially viable product which accounted for 85 percent of sales.

The board faced a tough choice: Side with Jobs, and risk alienating key groups of people who were critical to success, including shareholders, customers, and a large portion of Apple workers. Or side with Sculley, and risk losing one of the most brilliant innovators the world has ever seen. In basic terms, it was a battle between the leader with EQ and the one with IQ.

While Apple’s dilemma was highly public, many companies privately struggle with similar issues when choosing their executives, and there’s research to support both sides. On one side are people who believe that nothing is more important than a high IQ. According to research by Jonathan Wai, roughly 40 percent of Fortune 500 CEOs are in the top 1 percent for cognitive ability. Likewise, organizational psychologist Adam Grant showed that cognitive capability was five times more powerful than emotional intelligence (EQ) in influencing on-the-job performance.

On the other hand, EQ proponents like Daniel Goleman and Adele Lynn have made compelling arguments that mastering emotions, both yours and others’, rules. They point to the common tales of leaders whose brilliance was proclaimed only shortly before crashing and burning due to the lack of empathy and social expertness to work with others.

While it’s tempting to definitively choose one over the other, the research I worked on with my colleagues showed a more complex picture. We studied the leadership assessments of more than 15,000 leaders around the world to look for a correlation between IQ and EQ and leadership effectiveness. We measured IQ and EQ in advance, then observed leaders in action as they led their way through complex business simulations that tested their skills such as coaching others, influencing partners, solving urgent dilemmas, and crafting long-range business plans.

We found that neither EQ nor IQ is dominant, but each has a heavy influence over specific skills. Unsurprisingly, a high IQ was tied closely to skills like business savvy and financial acumen, while EQ was related to skills such as cultivating networks and leading teams. But there were also some surprises. For example, while influencing is commonly associated with EQ, the data showed that IQ was more important, likely because persuasion at the executive level requires the ability to make a logical business case. Likewise, while many people associate the ability to execute with IQ, it’s more related to EQ for senior leaders as it requires marshalling people toward a common direction.

While the debate about EQ versus IQ is binary, leadership is not. The strongest leaders, especially at the executive level, have both a high level of EQ and IQ. But no leader is perfect, and every individual is likely stronger in one area over the other. What’s important is that the company knows what the leader needs to do based on current business challenges, which may require a different mix of IQ and EQ.

In the case of Apple, it wasn’t about whether Sculley or Jobs was a better leader. It was about which leader was right at the right time. In 1985, the young company needed an experienced hand to bring order and profitability to the company. Sculley did just that, growing the company from $800 million in revenue to more than $8 billion in 1993. While Sculley’s move ensured that the company survived, it floundered toward the end of his tenure and in the years immediately after. It was only with Jobs’ return as CEO 1997 that the company took off on its path to revolutionize industries from technology to music to movies to telecommunications.

While context plays the key role in deciding on the right executive, the final lesson may come from Sculley’s reflections decades later. In a 2013 interview at a Forbes event, Sculley revealed that he wished that he’d understood Jobs’ motivations better, and that one of his biggest regrets was that the board chose sides instead of finding a solution to help him and Jobs work better as a team. Rather than choosing between IQ and EQ, a strong executive team is really about understanding each individual’s strengths and weaknesses in the context of the work to be done, then developing their EQ to ensure that they bring out the best in one another.

Matt Paese

Matt Paese, Ph.D., is senior vice president of executive services at global leadership consulting firm DDI where he works with companies across a range of industries to assess, develop, and coach their executives.