Great leaders come in all shapes & sizes. Some are reserved & analytical, while others shout their messages from the mountaintops. Different situations call for different styles. But the best leaders all have a high degree of emotional intelligence. This is the ability to monitor your feelings & those of others & to use that information to guide your thinking & behaviour.
Technical skills & smarts matter, of course, but they’re essentially table stakes for leadership positions: Although you need them to get into the game, they don’t guarantee that you’ll win. Emotional intelligence is twice as important for jobs at all levels & in the top tier, it accounts for nearly 90% of the difference between average & star performers.
Studies also show a strong link between emotional intelligence & bottom-line results. At one food and beverage company, divisions whose senior managers scored high in emotional intelligence beat their yearly earnings goals by 20%.
Divisions without such leaders underperformed by almost as much.
Daniel Goleman identified five components of emotional intelligence.
Let’s look at each one so that you can start to recognise these qualities in yourself & your employees & see how they make leaders more effective.
Leaders who see themselves clearly also see their companies clearly. But it’s easy to overlook self-awareness when sizing up potential leaders. You might assume that someone who admits to shortcomings isn’t “tough enough” to lead. In fact, the opposite is true. People generally admire candor & leaders must constantly judge capabilities—in themselves & in others. Do we have the expertise for this acquisition? Can we launch this product in six months?
Here’s how one manager, Julie, showed her self-awareness. She was skeptical about a new personal-shopping service at the department store she worked for. But she realised that her skepticism was fuelled by disappointment—she hadn’t been tapped to lead the rollout. Instead of sulking & holding things up, Julie explained this to her boss & her team, asking them to bear with her while she processed her feelings. They did so—& she threw her support behind the project.
The second component of emotional intelligence is self-regulation. This means controlling disruptive impulses & thinking before acting. For example, a manager whose team has botched a big presentation might want to pound the table in anger. But if he has a gift for self-regulation, he’ll consider the reasons for the failure, share his thoughts with the team, & propose a solution. Signs of self-regulation are usually evident.
- Comfort with ambiguity & change
Self-regulation is important to business for several reasons. First, leaders who control their feelings create an atmosphere of fairness & trust. This reduces politics & infighting, so productivity is higher. It also draws talented people in. Self-regulation helps leaders roll with changes instead of panicking & it curbs unethical behaviour. People rarely plan to inflate profits or dip into the till—these things usually happen because of poor impulse control.
If there’s one trait that virtually all great leaders have, it’s motivation—the third component of emotional intelligence. Motivated people are driven to achieve beyond expectations. This isn’t for money or status—it’s a deep internal desire. They’re passionate about their work, & they love to learn.
They look for new ways of doing things—they’re not bound by the status quo. Motivated people also want to be “stretched” & are always raising the performance bar. So they like to track progress—their own, their team’s & their company’s. They’re committed to their employers & unlikely to be lured to greener pastures. They’re also optimistic—even when the going gets tough.
Here’s an illustration of how motivation keeps people optimistic. A portfolio manager whose fund took a dive lost three large institutional clients.
Some people would have blamed external circumstances; others might have taken it as a personal failure. Instead, this manager saw a chance to prove she could lead a turnaround. Later on she said, “It was the best thing that ever happened to me—I learned so much.”
It’s not hard to see why motivation makes for great leadership. Someone who sets the bar high for themselves will do the same for their company & the drive to exceed goals is often contagious. Finally, it almost goes without saying that optimism & commitment are integral to leadership. Imagine trying to run a company without them.
The fourth component, empathy, is the easiest to recognise. We’ve all seen it in a sensitive teacher or friend. To intuit what others are feeling, empathetic people read between the lines of what’s said. This makes them especially good at understanding & supporting group dynamics.
But let’s be clear about an important boundary. Empathy doesn’t mean trying to please everybody—that is impossible. It does mean considering other people’s feelings when making decisions.
Empathy is more crucial now than ever, for three reasons:
- The prevalence of teams
- The rapid pace of globisation
- The growing need to attract & retain talent
Let’s examine each one.
Teams are cauldrons bubbling with emotions. A leader has to make sense of all those emotions & that’s not easy. A marketing manager at an IT firm faced this challenge. She was asked to head a team that was swamped by missed deadlines & rife with tension. She started by holding one-on-one sessions, asking members what frustrated them. She then encouraged people to share their frustrations constructively with the group. The result wasn’t just better collaboration—it was also new business, as a wide range of internal clients sought the team’s help.
Here’s the second reason empathy is paramount: the global economy.
Misunderstandings can flare up quickly when people’s basic assumptions differ. Empathy provides an antidote. Empathetic people gain understanding from body language, cues & they have a good feel for cultural differences.
A U.S. team pitching to a Japanese client learned just how important such cues can be. Their presentation was met with silence. Team members took this as disapproval & were ready to pack up. But their leader motioned them to stop. Reading the client’s face & posture, he saw not rejection but interest & he was right—when the client finally spoke, it was to offer them the job.
This brings us to the third reason empathy is so valuable—the importance of talent. Studies show that coaching & mentoring pay off not just in performance but also in increased satisfaction & decreased turnover.
The key to such relationships is empathy. Outstanding coaches & mentors get inside the heads of the people they are helping. They sense how to give effective feedback. They know when to push hard & when to use a light touch.
The last component of emotional intelligence is social skill. This isn’t simply friendliness—it’s friendliness with a purpose. Social skill draws on the other four components. Socially skilled people are great at building & leading teams—that’s their empathy at work. They’re expert persuaders—their self-awareness, self-regulation & empathy tell them when to make an emotional plea, for instance & when to appeal to reason & they’re excellent collaborators: Their passion for the work spreads to others, & their motivation drives them to find solutions.
When looking for social skill in your people, remember that appearances can be deceiving. You might think an employee chatting in the hall is wasting time—maybe he’s talking to someone who isn’t even connected to his job. But socially skilled people don’t arbitrarily limit their relationships. They know they might need help tomorrow from someone they are just meeting today.
Social skill is widely recognised as a business asset. People know that a leader needs to manage relationships effectively—she can’t do everything on her own. We can sum up social skill this way: It lets people use other components of emotional intelligence. For example, someone who can’t communicate empathy or motivation might as well not have those qualities at all. It takes enormous commitment & work to cultivate emotional intelligence. It’s much harder to develop empathy than to learn regression analysis, for instance. But the benefits of emotional intelligence more than repay the effort.
For today’s business leaders, this quality is not a “nice to have”—it’s a “need to have” that makes for star performance.