Why Emotional Intelligence Matters in Business

By Peggy Cleary.

Since the publication of Daniel Goleman’s Emotional Intelligence: Why It Can Matter More Than IQ (Bantam, 1995), there has been considerable research on the importance of emotional intelligence (EI) in leadership and in business. Goleman defines EI as “The capacity for recognizing our own feelings and those of others, for motivating ourselves, for managing emotions well in ourselves and in our relationships.”

Why Emotional Intelligence Matters

There is ample evidence that emotional intelligence is a better predictor of an executive’s success than IQ, industry experience or technical expertise. As leadership author and researcher, Warren Bennis, put it, “IQ is a threshold competence. You need it, but it doesn’t make you a star. Emotional Intelligence can.” Emotionally intelligent leaders produce better bottom line results, create higher performing work cultures and have superior interpersonal relationship skills.

The Business Case for Emotional Intelligence

• Partners in a global consulting firm scoring above the median on 9 of the 20 competencies delivered a 139% gain in profitability vs. other partners.
• In a large consumer products company, 87% of executives demonstrating high levels of emotional competence performed in the top third of all executives, out performing their targets on average by 15-30%.
• In an international study of 500+ executives placed by Egon Zehnder, Emotional Intelligence was a better predictor of success than either relevant previous experience or high IQ. Results were identical in North and South America, Europe and Japan.
• Research by the Center for Creative Leadership has found that the primary causes of executive derailment involve gaps in emotional competence.
• A study of nearly 4000 executives, correlated with climate surveys filled out by those who worked for them, indicates that 50-70% of employees’ perception of working climate is linked to the Emotional Intelligence characteristics of the leader.
• 87% of beverage company executives with high EI were in the top third for salary bonuses linked to performance.

The Emotional Intelligence Competency Model

Goleman’s Goleman’s model has 18 competencies organized into four clusters. Each competency is a learned capability based on emotional intelligence that contributes to effective work performance. This model is the basis for assessment tools in leadership competency performance.

Self-Awareness

• Emotional Self-Awareness
• Accurate Self-Assessment
• Self-Confidence

Social Awareness

• Empathy
• Organizational Awareness
• Service Orientation

Self-Management

• Self-Control
• Transparency
• Adaptability
• Achievement
• Initiative
• Optimism

Relationship Management

• Developing Others
• Inspirational Leadership
• Influence
• Change Catalyst
• Conflict Management
• Teamwork & Collaboration

Leadership Effectiveness

For many of us the idea that an effective leader, a “good” boss, is more emotionally intelligent than a “bad” boss feels intuitively correct. Emotionally intelligent leaders can create optimal results by using the power of emotion as a source of information, motivation, and connection. They are excellent communicators with well-developed interpersonal skills. They inspire and guide others to achieve potential, generating engagement with and commitment to shared goals. They are effective at conflict management and disagreement resolution and they model the team skills of collaboration and co-operation.

The good news is that with awareness, motivation and coaching, Emotional Intelligence can be developed, behaviors can be altered, leadership styles can be changed and high performance cultures can be created

Sources:

• Goleman, D. (1995) Emotional Intelligence. New York, Bantam.
• Goleman, D., Boyatzis, R., McKee, A. (2002) Primal Leadership. Boston, Harvard Business School Publishing.
• The Consortium for Research on Emotional Intelligence in Organizations:

http://www.eiconsortium.org