The dramatic increase in the number of people with critical decision-making responsibilities is one reason that companies with more skilled executives outperform their competitors. But there is also another, more complex dynamic that gives these companies a decisive edge: they are able to create an atmosphere that demands, recognizes, and rewards these attributes. And why is this so crucial? Individuals with high Executive Intelligence cannot reach their peak performance unless surrounded by others with a similar level of skill.

Everyone’s performance is enhanced or limited by the quality of the talent surrounding them. Professor Peter Senge of MIT’s Sloan School of Management, in his much-cited 1990 work, ...

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