The Tzaddik needs to let go of his mochin, his intellect, in order to fall to the level of the lowest of the people, from there his deep emunah, his endless faith in the salvation of HaShem inspires all those close to him and allows them to awaken and greatly grow their intellects so that they can connect to and relate to HaShem. This intellect is represented by the Tefillin worn upon the arm, close to the heart. When the Tzaddik sees the people's great intellect, he envies it and turns to HaShem , raising himself up and illuminating his own intellect. This intellect is represented by the Tefillin worn upon the head, between the eyes.
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