The Qs of Successful Revenue Managers: IQ, EQ and MQ
One of the most common definitions of revenue management focuses on the “4 rights” – right product, right customer, right time and right price. Before launching revenue management, however, organizations are faced with finding the “right” pricing and revenue manager to lead the charge. Over the past decade, I’ve been fortunate to not only help develop revenue management systems, but I’ve also had practical experience running revenue management within a large organization. I’ve also observed and consulted with hundreds of revenue managers. I feel my experience gives me a unique perspective into understanding the role of the pricing and revenue manager as a sticky factor which is critical to the successful implementation of revenue management.
The Different Types of Intelligence
Before I get to the specifics, please indulge me in taking you through a very personal journey of mine. When I was in the 2nd grade, I took an intelligence assessment as part of the public school testing regimen. At the time, I had no idea that it was anything other than an ordinary standardized test, but I remember there were folded paper problems and ink blobs, and I was asked to visualize and determine the underlying shapes. The questions were unlike anything I’d ever seen or read about, so I quickly surmised that the test was anything but standard.
As a result of that test, I was put into the general education curriculum rather than pulled into a select group for high IQ students called “Academic Resources” (AR). I remember being envious of the AR group as they went on special field trips, had extraordinary speakers, did cool experiments, read better books, etc…. I talked to my mom at length about what I could do to get into AR, but without having a high IQ test score, there were no grounds for admission. I know my mom was disappointed for me, but rather than focusing on AR, she stressed the importance of being well-rounded. She encouraged academic success but coupled that with emphasis on being kind, accepting, responsible, honest, self-confident and motivated. She encouraged me to try anything and everything from math club to ballet to softball to drama to guitar to foreign language, and she stressed the importance of seeing things through to completion.
There were likely studies of different types of intelligence 30+ years ago, but I’m certain my mom wasn’t aware of them. Today, I don’t think most of us parent/coach/mentor/develop based on the different types of intelligence, but I do think we focus on factors outside of basic academic intelligence. We have entire institutions of higher learning dedicated to Liberal Arts areas of study that are intended to give students general knowledge rather than to develop specific skills needed for a profession. Studies show that 75%+ of success is due to skills in “human engineering” rather than high IQ. A person with less formal education who has developed people skills can be far more successful than a person with an impressive education who falls short from an interpersonal relationship standpoint.
The Right Mix of Q’s for Revenue Managers
I’m often asked to provide insight and commentary on the preferred skill set for an effective Pricing Analyst or Revenue Manager. In my opinion, an ideal Revenue Manager possesses both analytical acumen (IQ) as well as interpersonal skills (EQ and MQ). One will not be as effective if this blend is highly skewed in one direction or the other. To elaborate a bit more on each of the Qs:
- IQ (Intelligence Quotient) is a measurement of cognitive capacity; one’s ability to think and reason. In terms of revenue management, this is analyzing data to connect dots and make better business decisions.
- EQ (Emotional Intelligence) is the ability to recognize, understand, use and manage emotions in oneself and in others. Here again in terms of revenue management, I see this as the ability to relate to our customers and make sure that we understand and offer the best service we can.
- MQ (Moral Intelligence) is the capacity to understand right from wrong and to behave based on the value that is believed to be right. There are seven main points that build someone’s moral intelligence: empathy, conscience, self-control, respect for others, kindness, tolerance, and fairness. Specifically as it relates to the role of the pricing analyst, MQ is understanding the bigger call of the organization and doing right things for all constituents. It’s making sure the interests of all the resident, leasing associate, manager and corporate associates are appropriately considered and weighed so that pricing decisions are fair and balanced.
Good decision-making requires more than intellect or what we normally think of as IQ. Leaders drive action by building relationships, recognizing their own emotions, responding to the needs of others and by revealing their own mistakes.
People with high EQ’s tend to have five qualities or competencies in common:
- Optimism – ability to anticipate the best possible outcome of events or actions
- Self-Awareness – knowledge of current emotional state, strengths and weaknesses
- Empathy – understanding of others’ points of view and decision-making processes
- Impulse Control – ability to mitigate an urge to act (as in: think first and act later)
- Reality Testing – ability to see things as they are, not as we want them to be
I’m not knocking IQ; in fact, I think being an intelligent, rational thinker is a key to success. But take a look around you at the folks you consider to be at the top of their game. Most of them are bright, but I wager most, if not all, have mastered the complexities and often under-rated forms of emotional and moral intelligence.
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