Undoubtedly, an effective leadership is critical for achieving business goals. In the modern workplace characterized by open communication and teamwork, a leader must understand their followers and know how to motivate them properly.
That’s why the business world has been paying an increased attention to “emotional intelligence”, a term first coined in the 1960s by researchers Peter Salovey and John Mayer. This ability has been recognized as an important one to succeeding as both a leader and an employee and achieving business goals more effectively.
For example, The Future of Jobs, a recent report published by the World Economic Forum, named emotional intelligence as one of the top 10 skills desired by employees by 2025.
In this article, let’s explore emotional intelligence more in-depth and define why it’s so important for your business.
According to The Future of Jobs, emotional intelligence is defined as “being aware of others’ reaction and understanding why they react as they do.” Also, it’s the ability to identify and manage own emotions.
Daniel Coleman, one of the most prominent advocates of the concept who wrote Emotional Intelligence: Why it Can Matter More than IQ, define five crucial skills of emotional intelligence. They include:
Self-awareness – the ability to identify and understand emotions of other people and the ways how they impact others around them
Self-regulation – the ability to think before acting and manage impulses
Internal motivation – the drive to achieve goals for personal reasons, not for rewards and recognition
Empathy – the ability to identify and understand motivations of other people
Social skills – the ability to effectively manage relationships and build teams.
So, the concept of emotional intelligence says that personal qualities such as the ones listed above strongly influence both personal and business success in the modern workplace.
“In terms of businesses, it can impact everyday decisions they make, including hiring, promoting, leading, and firing,” explains Mike Booker, an HR consultant. “On the other hand, in terms of personal success, a leader possessing emotional intelligence knows how to handle failures, motivate followers, and maintain self-control in critical situations.”
In fact, Jack Welch once said in an interview to the Wall Street Journal:
“A leader’s intelligence has to have a strong emotional component. He/she has to have high levels of self-awareness, maturity and self-control.”
Let’s begin by discussing how assessing emotional intelligence of your existing and potential employees could improve the performance of your business.
Multiple organisations use EQ to make important decisions, such as, hiring employees and deciding on pay rises. The World Economic Forum (2016) ranked emotional intelligence sixth in the top ten skills employees need by 2025 to succeed in the future workplace.
Other benefits of being an emotionally intelligent leader include:
World Economic Forum (2016) ranked emotional intelligence sixth in the top ten skills employees need by 2025.
There are many ways in which emotional intelligence influences performance of employees, and the evidence of that influence is well-known. For example, business scholars have conducted a number of studies probing the topic and here’s what they found.
Earlier studies like this one from CareerBuilder found that 71 percent of employers (HR professionals and hiring managers) viewed emotional intelligence more important than IQ. When asked why they thought that way, employees with high EI:
These results are supported by more recent studies. For example, this 2017 study published in Human Performance Journal also found that emotional intelligence was a predictor of job performance in social jobs. Researchers also believed that emotional intelligence came naturally to some people, but could also be enhanced in others with training and performance.
Therefore, by assessing emotional intelligence in potential employees and improving these skills and abilities in the current ones, you may improve job performance of your workforce. You can find resources for testing and tips on developing emotional intelligence after the next section.