Why Emotional Intelligence and Leadership Go Hand-in-Hand

What makes a great leader? Some say there’s a perfect formula: combine the right skills with the right ambition and opportunity, and anyone can achieve success. But now research says it’s what you can’t see on a resume that may matter most.

Up to 85% of our financial success is based on “invisible skills”—traits like personality, how well we can communicate, and our ability to empathize, negotiate, and lead. These non-technical skills may not be as obvious on paper like a degree or job experience, but they’re the foundation for something just as important: our emotional intelligence. Also known as “EQ,” this unseen mental quality is found in many of the world’s top leaders, and may just be the the deciding factor between a good business leader and a great one.

What is your emotional intelligence?

According to Psychology Today, emotional intelligence is “the ability to identify and manage your own emotions and the emotions of others.” In business (especially sales), this is often referred to as being good with people or having good people skills. But emotional intelligence isn’t just about how well we interact with each other. It’s also about how well we manage and interpret our own emotions.

Think about your day-to-day interactions with employees and your typical workplace routine. Then ask yourself the following questions:

• Can you recognize emotions in yourself and other people and understand the basis for those emotions?
• Are you able to harness your emotions and apply them to tasks like thinking and problem-solving?
• Can you manage emotions, through managing your own emotions and/or those of other people?

If you answered “yes” to all the above, you likely have high emotional intelligence. However, having a high EQ isn’t about manipulating emotions or putting on a front for employees. Emotionally intelligent people tend to be more authentic and transparent, possibly because they are so attuned to their emotions and those of others’. At the same time, they’re also able to keep their feelings in check and make well-informed decisions, are incredibly resilient under pressure, and display higher rates of empathy—all top traits not-so-coincidentally found in many successful leaders today.

How emotional intelligence impacts your leadership skills

Many leaders are where they are for a similar reason: they put in the work. Still, in highly skilled fields—including supervisors and business leaders—all leaders at some point possess a similar level of skill. Once you make it to the top as a high-performer, you remain a high-performer. But to break away from the pack, truly impactful leaders have to possess something more.

In a study of more than 5,000 leaders across multiple industries, researchers discovered that the best leaders were decisive and willing to take risks, but also more self-aware and more thoughtful about how they engaged with family and coworkers. Additional research from Harvard also found that introverts, not extroverts, were more likely to surpass expectations of company leadership.

Why is this such a surprise? In mass media, the typical boardroom CEO is often characterized as egocentric and out of touch with their employees. Others develop a cult of personality. In reality, the ruthless CEO has much to learn from their calm, collected counterparts.

As both studies revealed, the best leaders don’t focus all of their efforts on being universally liked or feared. Instead, they develop a deeper understanding of their employees’ and stakeholders’ points of view. They comprehend the needs and motivations of others, and in turn, calmly engage with them under pressure in order to move decisions forward.

Remember the three-question test for emotionally intelligent people? According to Harvard’s findings, the most successful leaders are:

• Able to empathize and manage the emotions of other people
• Self-aware but not egocentric
• Able to keep their own emotions in check, while quickly thinking and problem-solving around how their ideas will impact others

Three ways EQ can make you more effective at work

It’s one thing to identify leadership qualities at the C-suite level. However, these emotionally intelligent characteristics aren’t just limited to CEOs. The most effective day-to-day managers also rank high on emotional intelligence. Like good CEOs, good managers are consistent and able to self-regulate their emotions, in turn creating less-stressful environments for employees that support autonomy and creative freedom.

As a manager or business owner, your leadership success is directly impacted by how empathetic your employees and customers think you are. Here are three reasons why empathy and other emotional intelligence skills are crucial for strong leadership:

1. Emotional intelligence makes you a better boss.

Think back to the last time you were faced with a hard decision, with only a few minutes or hours to carefully evaluate your options. How did you tackle it? Were you prepared for the unexpected? Did you keep your cool under pressure?

Being an emotionally intelligent leader means identifying the source of your stress, then internally guiding yourself through the necessary steps to make an informed decision. It doesn’t mean you can’t share your frustration. It means you know how to channel it.

Staying calm and in control are the hallmarks of a great manager. Keeping your emotions in check minimizes your own stress, but also your employees’. Your mood in the workplace can even impact your team’s physical health. When employees work under managers with poor leadership skills, they’re at higher risk for heart disease, high blood pressure, sleep problems, depression, and weight gain.

Emotional intelligence also goes hand-in-hand with two other highly demanded leadership traits in today’s workforce: authenticity and transparency. A stunning 99% of millennials believe feedback is important, and many wish they had more transparent conversations with their managers. Half prefer “purposeful work” to a higher salary, and 62% want to work for a company that makes a positive impact.

Millennial workers want clarity and transparency when it comes to job performance and company values. And while emotional intelligence layers additional “emotional management” into leadership roles, understanding an employee’s point of view is at the core of strong leadership. As Harvard’s CEO study found, leaders who take the time to build a rapport with their employees and stakeholders experience more long-term success than those solely focused on their own agenda.

2. Emotional intelligence helps you create and lead better teams.

We know that emotional intelligence strengthens management skills and has a positive effect on employee well-being. Now imagine an entire workplace—not just leadership—with high emotional intelligence.

In 2015, Google took a closer look at what makes a team successful. They found that the most effective teams within their company could all answer “yes” to the same five questions:

• Can we take risks on this team without feeling insecure or embarrassed?
• Can we count on each other to do high quality work on time?
• Are goals, roles, and execution plans on our team clear?
• Are we working on something that is personally important for each of us?
• Do we fundamentally believe that the work we’re doing matters?

While successful team members all shared similar answers, they also had something else in common: emotional intelligence. When we compare Google’s questions to the three core emotional intelligence skills, we find that both sets require empathy, the ability to gauge and understand emotions of others in order to work together, and the ability to understand individual motivations.

An emotionally intelligent leader can make a big impact, but an emotionally intelligent team can accomplish even more. Since they’re already attuned to the emotions and motivations of others, leaders with a high EQ are perfectly positioned to craft and lead these high-functioning teams. Compared to other coworkers, great managers build workplaces that are “engines of productivity and profitability.”

When you increase the emotional intelligence of your entire team, you drive productivity even higher. In an emotionally intelligent team environment, team members receive regular feedback, are aware of each other’s strengths and weaknesses, and are more willing to collaborate—the perfect recipe for employee engagement, and in turn, increased productivity.

3. Emotional intelligence sets you apart from competitors.

The facts are simple: people would rather do business with people they like. When researchers compared tipping amounts among servers at different restaurants and bars, higher tips weren’t based on the quality of the service, but the likeability of the server. In the sales industry, sales agents who exhibited higher rates of empathy and self-confidence made almost double the sales than agents with weaker emotional intelligence.

Empathy, the foundation of emotional intelligence, is the key to being a great leader, but also your business’s financial success. The top 10 companies in 2015’s Global Empathy Index generated 50% more revenue than the bottom 10. Why? Listening with empathy is the most effective way to comprehend another person’s point of view. In its simplest form, solving customer pain points starts with understanding another person’s needs and recognizing how they impact their day-to-day lives.

Customer service representatives ask for a customer’s name only about 20% of the time. If 70% of the buying experience depends on how a customer feels they’re being treated, it’s crucial to make customers not only feel heard but to make sure they feel understood and valued. If you’re looking to gain an edge on your competitors, emphasizing emotional intelligence and practicing empathic listening with your employees will definitely get your customers’ attention.

We’re all human. No matter how strong your leadership skills are, there will be stressful days at work or situations outside of your control. That’s why emotional intelligence is crucial for effective leadership. By understanding and managing the emotions in yourself and others, you can create a better environment for your employees, a better experience for your customers, and cultivate better leadership habits in your business. Next time anxiety, stress, or frustration appear, harness them and put them to work.