In my more than thirty years of consulting, I have found that, without question, natural intelligence is the most important success indicator in the business arena and the single most significant differentiator at the upper echelons of large organizations. Stanford psychologist Lewis Terman recognized this when he pioneered his IQ tests in the early 1900s. In his opinion, nothing about an individual is as important as IQ, except possibly morals.
I echo Terman’s observation and sentiment, but I also recognize the observations of “IQ Fundamentalist” Arthur Jensen who observed that IQ levels, beyond those that would qualify an individual for admission to graduate school (about IQ 115), become relatively unimportant in terms of success. To lead most large organizations, I’d put that number closer to 120 or 130. But no matter which number we choose, we know that IQ differences in the upper part of the scale-above 115-have fewer implications than the thresholds below that.
To give a frame of reference, most successful professional football players are big guys, but beyond a certain weight, you don’t see increased skill or excellence. Like the size of NFL players, intelligence has a threshold. You have to be smart enough to do the job well-but not appreciably smarter than that.
Therefore, the most crucial forecaster of executive success is enough brainpower, or the specific cognitive abilities that equip us to make decisions and solve problems. Three main components define leadership intelligence: critical thinking, learning ability, and quantitative skills. Of these, critical thinking is the most important and the least understood.
Dispassionate scrutiny, strategic focus, and analytical reasoning form the foundation of critical thinking. These abilities equip a person to anticipate future consequences, get to the core of complicated issues, and zero in on the essential few while putting aside the trivial many.
Most people can learn to follow a protocol or set of procedures. Give them a check list, and they can execute the plan. Sometimes these individuals are valuable employees, maybe even top performers. But they wouldn’t qualify for membership in the august body of business virtuosos, because they can’t solve the unfamiliar problems that plague senior leaders.
General learning ability is the second most important component of leadership intelligence. When leaders can acquire new information quickly, they don’t lose valuable time. They size up unfamiliar situations, learn about their people, study the products and processes, and then immediately act on this body of knowledge. When this happens, the organization responds by moving the leader’s ideas to action-creating a competitive advantage.
Not every turn in the leadership pipeline requires the third element of leadership intelligence-quantitative abilities-but they remain crucial at the top of most organizations. Knowing what the numbers mean and using them to make sophisticated business decisions equip an individual to make budget or profit and loss assessments. Superior development of these skills further allows a person to set the company’s direction by evaluating the nuances of mergers, acquisitions, and risk-taking ventures.
In a general discussion of virtuosity, talent and intelligence would remain separate. Some individuals may have exceptional talent for music, art, or acting, for example, but not exceptionally high IQs. However, in the business arena, the most sought-after talent will usually be so closely linked to leadership behaviors and cognitive abilities that separating them would be impossible.