Five reasons why emotional intelligence is essential in effective leadership

Anyone who pretends that emotional intelligence is a ‘soft’ skill has never managed a bullying claim, told an employee that their position is redundant, or been involved in an industrial negotiation. Many management tasks that are essential in today’s workplace require understanding of the emotional issues that employees and teams face. Resolving them takes strength, decisiveness, compassion, strategic thinking and integrity – and the importance of these skills shouldn’t be underestimated.

Emotional intelligence can be understood to be the ability to recognise and understand your own feelings and the feelings of others, and to choose how to respond to them. Rutgers psychologist Daniel Goleman named 5 elements of emotional intelligence back in 1998:

  • Self-awareness;
  • Self-regulation, being the ability to manage constructively your own emotions, in order to act in your long-term best interest;
  • Motivation beyond money and status;
  • Empathy for others; and
  • Social skills, such as managing relationships and building networks.

Other skills more recently discussed as important in leadership include cultural intelligence, which is the ability to adjust to different contexts, and contextual intelligence, which enables leaders to identify and work within implied norms.

These emotional elements of leadership are worth thinking about, and developing like a technical skill. Here are five reasons why.

  1. Your business will be more competitive by improving employees’ engagement

Whatever your management style, being able to build relationships with your direct reports and the broader team is essential. Inspiring and engaging staff will not only make the company a ‘nicer’ place to work, but it will also make it more competitive. Inspired employees are twice as productive as satisfied employees, and three times more productive than dissatisfied employees (Bain & Company, 2015). Employees’ engagement with their manager and with the workplace is another indicator of productivity: organisations with a high level of engagement report 22% higher productivity (Gallup Organization, 2013).

  1. Conflict between your team members is inevitable, and you’ll need to get them back on track

In 2016 research by Dr Lindsay McMillan, 20% of Australian workers had experienced major problems in communication with a co-worker, and 50% had experienced serious incidents of conflict at work. Conflict is distracting and stressful, and employees look to their manager to help them through it. Low-level interpersonal issues should be resolved by the employees themselves, but if the conflict continues, you’ll need to intervene – holding the employees accountable for their conduct and how it is impacting on the team’s achievement of its objectives, and supporting them to resolve the issues between them.

  1. One in 5 of your co-workers will suffer from a personal crisis or mental illness in the next year

When you employ someone, you don’t just enjoy the benefit of their skills, experience, industry connections and work ethic. You might also manage them through tough times in their lives, as they experience personal issues such as illness, divorce, or addictions. For example, according to BeyondBlue, 1 in 5 Australians experience a mental health condition in any given year, and 45% will experience a mental health condition during their lifetime.

Employees’ behaviours in the workplace and their relationships with the rest of the team – including their happiness, ability to focus, constructive input into interactions and discretionary effort – can be significantly impacted by what is going on at home. As their manager or leader, your guidance and support through difficult times can make a profound difference to the individual and the broader team.

  1. Change can’t be effected without engaging people’s hearts and minds

Change initiatives designed to improve business performance commonly fail; leadership and people issues are the most commonly cited reasons. A leader who is able to ‘read the room’ and support employees through their fears about the change will be far more likely to create a credible, guiding vision for the future. They can influence the team’s emotional state proactively, building optimism and enabling cooperation during the transformation process.

  1. Your workforce increasingly cares about EI

As younger people join the workforce, the value of leaders’ emotional intelligence will only increase. In a 2017 study by the Levo Institute, 80% of the millennial respondents reported that emotional intelligence is something they actively focus on as they develop their careers, and 87% of millennials indicated a strong connection between their personal motivation to help the company succeed and the emotional intelligence of the company’s leaders.

Emotional intelligence is hard to learn, and self-reflection can be uncomfortable, but they are both increasingly important in today’s workplace. Organisations with leaders who demonstrate strong character and emotional intelligence – including letting go of mistakes, showing empathy and genuine concern for the common good – have been found to have an average return on assets of 9.35% over a two-year period, which is almost five times the ROA of organisations with low-rating leaders (KRM International, 2015). Leaders, can you afford not to build the emotional intelligence of your leadership?


This article was originally published in CEO World Magazine