The emotional intelligence of your staff can make or break your business.
Important qualities of a good leader include managing personal feelings and empathizing with others. — Getty Images/Kerkez

As an entrepreneur, you might pride yourself in being well-educated and innovative, but there are important qualities of a good leader that often go overlooked. One example is emotional intelligence, or the ability to recognize and manage your emotions and empathize with others.

Since the mid-90s, business leaders, salespeople, and other professionals have put an emphasis on developing their emotional intelligence to help them, and their businesses, succeed. Furthermore, historical leaders, such as Martin Luther King, Jr. and Abraham Lincoln, have been measured and recognized for their high emotional intelligence.

Here is the definition of emotional intelligence and why it is important in the modern workplace.

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What is emotional intelligence?

Emotional intelligence, also known as emotional quotient (EQ), is a person’s ability to manage their feelings and empathize with others. A person with high emotional intelligence can recognize emotions — both their own and the emotions they see in others — and act in such a way that helps them succeed.

The concept of EQ was popularized in 1995 by Daniel Goleman, a psychologist and science journalist, who wrote, “Emotional Intelligence: Why It Can Matter More Than IQ.” As the title suggests, Goleman examines the importance of a person's intelligence quotient (IQ) when compared against their EQ. The book became a New York Times bestseller and the concept of EQ became ubiquitous in the workplace.

According to Goleman, EQ is comprised of the following components:

  1. Self-awareness. Having a high self-awareness means you understand your strengths, weaknesses, moods and emotions. Furthermore, a self-aware person understands how these things impact others.
  2. Self-regulation. A person who can effectively self-regulate is someone who thinks before taking action. This type of person is not controlled by their emotions and can control their impulses.
  3. Internal motivation. A person with a high emotional quotient is a self-starter and pursues their personal and professional goals for their own self-development. They are not necessarily motivated by praise, money or titles.
  4. Empathy. An empathetic person is someone who can easily recognize and understand other people’s emotions. Empathy is more than sympathizing with others, as empathetic people genuinely understand what others are going through and respond in kind.
  5. People skills. Finally, a person with high EQ has developed their people skills and is good at networking and building relationships. A person with great people skills develops strong, non-competitive bonds that are built on mutual trust and respect.

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Organizations and employers who prioritize EQ foster a safe working environment in which people work closely together to solve problems, take ownership for any mishaps and keep a level head when under pressure.

Why is emotional intelligence important in business?

According to Indeed, when a workplace has a low EQ culture, people have a more difficult time working together as a team. Individuals can become passive or take an aggressive approach to their regular interactions. Two of the telltale signs of weak EQ in the office are the inability to accept criticism and own up to one’s mistakes.

On the other hand, organizations and employers who prioritize EQ foster a safe working environment in which people work closely together to solve problems, take ownership for any mishaps and keep a level head when under pressure.

Here are some additional benefits of fostering high emotional intelligence in the workplace:

  • Improves leadership. A manager is someone who monitors their direct reports. A leader is someone who builds trust with individuals within their organization and inspires them to succeed. For any business to succeed, they need strong leadership that can weather the storm and empathize with the people under their direction.
  • Cultivates positive company culture. A strong company culture attracts and produces better workers. In fact, companies that earn the loyalty of great talent earn 33% higher revenue than companies that have a poor company culture. Taking the time to develop a strong EQ workforce has direct impacts on your bottom line.
  • Encourages collaboration and teamwork. A company that prioritizes EQ creates safe environments in which employees know they are respected and aren’t afraid of failing in front of their peers. This level of trust in an organization produces better collaboration teamwork, which may improve productivity and success rates. In fact, 86% of employees and business leaders state the lack of collaboration or ineffective communication is the root cause for workplace failures.
  • Assists in conflict management. Finally, individuals who are equipped with high EQ are better able to accept criticism and keep their cool in a workplace conflict. This results in less time arguing and more time solving problems.

[Read: How to Be a Great Leader During a Crisis]

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