Emotional Intelligenceby Andy Smith
The business case for EI
Emotions play a bigger part in business than is generally acknowledged. They give us instant information about where we stand in our social relationships; they provide the ‘energy’ for motivation and decision-making and, if not controlled, they can destabilise our powers of rational thought in an instant. Emotion Intelligence (EI) is therefore essential to the success of almost any sort of human endeavour, including business.
Business success is not just about intellect and technical skills. The ‘people skills’ of EI – knowing who to trust, being able to communicate and get along with people – are also vital.
It is often said that business is about relationships. The abilities of EI are essential in setting up and sustaining these relationships. Success in business also depends on staying motivated through setbacks, and on controlling our emotions, allowing us to make decisions objectively and delay gratification now to achieve greater rewards in the future.
The ability to evoke and inspire emotions in others is equally important. All buying decisions are ultimately emotional. When competing products are evenly matched on price and features – sometimes even when they are not – customers will decide in favour of one they feel good about. These emotions are influenced by the total package of images, sounds and feelings associated with the product – the brand – as well as how the customer feels about the person selling it to them.
Unless you are a one-man band, you will also need to work with other people. Emotional intelligence skills are crucial in getting along with other team members, inspiring and motivating them, and ensuring that they want to give their best.
Finally, emotions are important in making decisions. Contrary to the old conventional wisdom, emotions are usually not unwelcome intrusions, messing up the purity of reasoned decision-making. Rather they are an additional source of information, helping us to make wiser choices.
The bottom line
It has been estimated that around 85 per cent of the difference between ‘star’ and average performers in senior management roles can be attributed to emotional intelligence factors rather than technical skills or cognitive abilities. After all, there is not that much variation in the cognitive abilities of people at this level; the academic ability needed to reach senior management level in a large organisation generally requires an IQ of at least 110. Similarly, senior managers need a ‘threshold level’ of technical expertise just to do the job.
However, there is a much greater range of EI competencies among senior managers, with consequent impacts on the bottom line. In one large accounting firm, Daniel Goleman’s team found that partners with strengths in self-management added 390 per cent more profit than those without.
In his study of 733 millionaires in the US, covering entrepreneurs and professionals as well as senior corporate executives, researcher Thomas J Stanley found that SAT scores and academic attainment have little or no value correlation to their income or net worth. Instead, attributes such as honesty and people skills were rated by the millionaires themselves as far more important than intellect or schooling in explaining their success.
Of the factors that the surveyed millionaires regarded as important to their success, the top eight can be regarded as aspects of emotional intelligence. The top three were: being honest, being well disciplined, and getting along with people.
Increasingly, major corporations are recognising what most successful entrepreneurs have always known from their gut feeling: that the ‘people skills’ and self-management that come with emotional intelligence are essential in today’s business world.
So, the emotionally intelligent person:
- Stays motivated and focused, despite setbacks
- Knows how to establish and maintain good customer relations
- Knows who to trust
- Is trusted by others
- Makes a good team member
- Has leadership skills
- Makes reasoned and emotionally intelligent decisions
- Brings in good business.