Critics have long charged that maximizing shareholder value ultimately just encourages CEOs and shareholders to feather their own nests at the expense of everything else: jobs, wages and benefits, communities, and the environment.
And it arguably distorted capitalism for a generation or more. It dramatically changed how and how much executives are compensated. Shareholder primacy rapidly became business orthodoxy. Among other things, he argued for stock-based incentives that would neatly align CEO and shareholder interests. The person who arguably did the most to advance the idea was the business school professor Michael Jensen, who wrote in Harvard Business Review and elsewhere that CEOs pursue their own interests at the expense of shareholders' interests. The idea that maximizing shareholder value takes legal and practical precedence above all else first came to prominence in the 1970s. HBR: Emotional Agility, by Susan David and Christina Congletonīook: Emotional Intelligence, by Daniel Goleman New Yorker: The Repressive Politics of Emotional Intelligence, by Merve Emre HBR: Leading by Feel, with Daniel Goleman Susan David, psychologist at Harvard Medical School and author of Emotional AgilityĪndy Parks, management professor at Central Washington University Each week, an HBR editor talks to world-class scholars and experts on the most influential ideas of HBR’s first 100 years, such as disruptive innovation, shareholder value, and scientific management.ĭiscussing emotional intelligence with HBR executive editor Alison Beard are:ĭaniel Goleman, psychologist and author of Emotional Intelligence However, critics question whether emotional intelligence operates can be meaningfully measured and contend that it acts as a catchall term for personality traits and values.Ĥ Business Ideas That Changed the World is a special series from HBR IdeaCast. It’s now widely seen as a key ingredient in engaged teams, empathetic leadership, and inclusive organizations. It proposed “emotional intelligence” as the ability to identify and manage one's own emotions as well as those of others.ĭaniel Goleman popularized the idea in his 1995 book, and companies came to hire for “EI” and teach it. Until 1990, when psychologists Peter Salovey and John Mayer published their landmark journal article. When HBR was founded in October 1922, the practice of management focused on workers’ physical productivity, not their feelings.Īnd while over the decades psychologists studied “social intelligence” and “emotional strength,” businesses cultivated the so-called hard skills that drove the bottom line. The popular conception was that emotions had little role in the workplace. In the early 1990s, publishers told science journalist Daniel Goleman not to use the word “emotion” in a business book.
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