Walking the Stakeholder Tightrope: The Key to Effective Leadership

Are your leaders able to influence a diverse group of stakeholders? Here’s how socially intelligent leaders can navigate complex relationships.

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As executives climb the leadership ranks, they interact with an ever-more diverse group of stakeholders, from employees to customers, investors, shareholders, and regulators. Each group brings unique needs—and expectations. Leaders who can actively engage their stakeholders and navigate their differing perspectives will steer their organizations forward. Those that don’t, risk becoming entangled in a web of competing expectations. This is where social intelligence comes in.

To succeed today, leaders need to be able to navigate complex interpersonal dynamics. They need to figure out what makes their stakeholders tick: What truly matters to them? What do they expect from you as their leader? And how can you effectively work together to achieve mutual goals?

These answers are often not immediately obvious. It’s up to the leader to actively listen, read a room, and flex their communication style and tone based on who they are speaking with. This is something that only socially intelligent leaders can do. This isn’t a nice-to-have soft skill, but a strategic necessity that can make or break an executive’s effectiveness and success .

What does social intelligence mean in the leadership context?

	Engages proactively and skillfully in social interactions.			Maintains control of emotions and feelings.
	Ready to listen and help, when needed.			Demonstrates sympathy and empathy for others.
	Enjoys the company of others and building relationships.			Sensitive to and insightful of the perceptions of others.

Being a socially intelligent leader is in part about being a good storyteller. It’s about understanding your audience, tuning in to what matters to them, and presenting your ideas in a way that resonates, unites, and motivates. It’s also about listening closely, asking the right questions, and demonstrating that you’re paying attention, you’re curious about their world, and you see the critical part they’ll play in the road ahead.

Dana Landis
Leadership advisor, Russell Reynolds Associates

Why is social intelligence such an important leadership skill?

Socially intelligent leaders pick up on subtle cues. They can quickly determine whether a particular conversation is landing well, and importantly, they know when to step back, take stock, and pivot if required. They are able to flex their approach between sharing personal anecdotes to rally the team, while also knowing when to not overshare.

Social intelligence is not about pleasing everyone. Senior leaders—and especially CEOs—haven’t been placed in the role to make friends. They have to be willing to make tough decisions, to be bold, and be unafraid of the consequences. But through their likeability and interpersonal acumen, they are able to turn potential conflicts into opportunities for collaborative problem solving.

When leaders are socially intelligent, they typically unlock the following benefits.

01	More likely to create a culture of innovation. Socially intelligent leaders are able to create an environment that’s psychologically safe. In these organizations, teams feel comfortable thinking outside of the box. They know that no question is off-limits, they can take risks, and they have the freedom to throw things at the wall and see what sticks. Promoting the mindset that you can’t fail gives people the space to grow and learn, and breeds innovation.

02	Builds stronger relationships. Socially intelligent leaders will see a diverse group of stakeholders and know what their preferences are, and what communication style works for each of them. These leaders are thoughtful in their approach. They look out for and effectively read subtle cues, they’re always listening, and they have the ability to show compassion when it matters most. This unlocks stronger relationships, more cohesive teams, and better collaboration.

03	Better able to build trust. Trust is incredibly hard to build and yet can be lost in an instant. Socially intelligent leaders understand the value of trust and treat every interaction with their teams as an opportunity to build it. Ultimately, trust comes down to backing up words with tangible actions. Socially intelligent leaders aren’t devoid of making mistakes. But when they do, they respond with honesty, integrity, and authenticity, which allows them to maintain trusted relationships.

04	Minimize leadership turnover. Socially astute leaders are able to pick up on social cues, such as a mood shift in their team or lower engagement levels. Rather than pushing forward and continuing on the path they’re on, they will lean in and actively listen to their team. When a leader understands their team, and knows their values and motives, they can take action to address the problem and minimize leadership turnover.

We often think of social intelligence as a set of "people skills," but it's far more profound than that. Socially intelligent leaders are able to navigate complexity and uncertainty with remarkable precision, often steering their organizations towards success in ways that, to others, might seem like simple intuition or luck.

Erin Zolna
Leadership advisor, Russell Reynolds Associates

How can leaders become more socially intelligent?

Being socially intelligent will come more naturally to some than to others. But, executives always have the chance to refine some or all of their leadership style and the way they communicate with their team. It can be ramped up by having a higher level of self-awareness of their social derailers. Or by investing in an executive coach to help them recognize times when they could be more socially astute.

	Start with self. The best leaders are voracious consumers of data and are constantly finding ways to create space in their schedules to stay curious outside the 'day-to-day' of their roles. They convert their self-awareness into 'self-knowledge'—the ability to adjust their behaviors and their rituals to take into account when they are in positive or negative situations. They know what triggers their stress and energy depletion and have mechanisms for recovery (both physical and mental) that they apply consistently.

	Strong networks. Leaders need broad and rich networks—inside and outside of their organizations, and at multiple levels. The best leaders are very connected, hearing 360-degree inputs from employees levels down, their peers, and a wide range of external sources. These insights are not only critical to ongoing self-awareness and development—they also help leaders to filter each new instinct through a trusted set of colleagues and team members who will challenge and even redirect to get the optimal outcome.

	Intentional inclusion. Great leaders assertively pull perspectives from everywhere into their decision-making processes. No matter how expansive or fast thinking a leader may be, their pattern recognition will be improved if they actively get other brains on the challenge and resist the temptation to go it alone. Every leader needs a 'kitchen cabinet' to help them hear the truth and make the right decisions. Nothing is truer than the adage that senior leaders don't hear the unvarnished truth enough—so great leaders seek it out.

	The power of stories. As leaders own their development journeys and prioritize moments of reflection, stories can be an especially effective way of demonstrating authenticity and vulnerability. Some leaders are natural storytellers, but they need to make sure their stories don’t sound too slick or superficial. Other leaders struggle with opening up and sharing—requiring structure, practice, and feedback to hone a few stories that can make an impact.