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Why Successful Leaders Are Emotionally Intelligent

For many entrepreneurs, successfully founding a business can feel like the apex of success. The road to the beginning of a successful startup or small business is paved with countless hours of conceptualizing, funding, prototyping and networking – among about a million other things. However, it’s important for entrepreneurs and business owners to remember that ultimately, founding a business is only a penultimate achievement, a runner up to what for many is the most difficult part of being a business owner: actually running the business in a leadership position. Leading a business can be terrifying (which we’ll go over shortly), and there’s no “one size fits all” template for how to be a successful, inspiring leader to your workforce. No matter your industry or specialization, however, there is one key trait that all successful leaders must possess: emotional intelligence. Running a business is hard, so good leaders need to know what it means to be a leader and how to be emotionally intelligent, which will allow them to succeed in a leadership position.

Why Is Leading A Business Terrifying?

In order to understand why emotional intelligence is a crucial aspect of good leadership, it’s important to first go over why leading a business is often so terrifying for entrepreneurs and business owners. The two main contributing factors to this phenomenon are:

  • You’re not flying solo anymore. For most entrepreneurs, the process of conceptualizing and beginning a business is a lonely process characterized by an unhealthily obsessed work schedule and intense seclusion. But once your ideas become a business, you’re not the only factor in the equation anymore. Now, you have to worry about your employees as well.
  • You’re taking the financial livelihood of others into your own hands. Many entrepreneurs are risk-takers who only achieve success after experiencing plenty of failures. For this reason, entrepreneurs may struggle with the burden of the financial livelihoods of their employees weighing on their success. For individuals who are accustomed to failure, the sudden pressure of maintaining constant success with the stability of lives on the line can be a lot to ask.

Now that we’ve covered some of the reasons entrepreneurs often struggle with being business leaders, let’s cover exactly what emotional intelligence means for someone in a leadership position

What Does It Mean To Be An Emotionally Intelligent Leader?

Emotional leadership can perhaps be most clearly defined as “the ability to recognize and objectively analyze your own emotions and their potential effects on the people surrounding you, while also being able to accurately perceive and understand the emotions of others from their point of view.” Fortunately, you don’t only have to rely on broad definitions to understand emotional intelligence, because most of us have a role model for emotional intelligence in our own lives. If you’ve ever known someone – it could be a parent, mentor, friend, partner or even a son or daughter – who always seems to know how what you’re feeling and be able to listen to you express your emotions without becoming overwhelmed, then you know somebody who is emotionally intelligent. Consider thinking more about how you can model yourself after this person.

Emotional intelligence is not necessarily the same as empathy. This can be confusing to understand, so let’s use an example to illustrate this concept. Say, for example, that a friend approaches you sobbing, and informs you that his girlfriend just broke up with him. An empathetic person would be able to understand and “feel” this friend’s sadness, but still may react to this news in an emotionally unintelligent way – for example, beginning to cry themselves or being unable to listen due to overwhelming feelings of sadness. An emotionally intelligent person, however, would be able to understand or “feel” this friend’s sadness with empathy, but would also not let themselves be overwhelmed by their emotional response, instead being able to listen to this friend and offer them support and advice.

Why Emotional Intelligence Is A Key Component Of Successful Leadership

Now that we know why being in a leadership position can be terrifying, and what emotional intelligence is, it’s time to discuss why leaders who are emotionally intelligent are more successful than leaders who are not.
Your employees are people, too. If you can relate to the feelings of fear that we wrote about earlier and you’re terrified in holding the livelihoods of your employees in the palm of your hand, it might be your first instinct to compartmentalize these feelings and depersonalize your workforce in your mind. However, employees won’t be inspired to work for a leader who they feel only sees them as a statistic. Emotional intelligence informs how successful leaders view their workers and, in turn, inspires employees of emotional leaders to work harder.

This isn’t just a bunch of karmic mumbo jumbo either. A study done by the Harvard Business Review found that emotionally intelligent leaders were not only more appreciated by their employees, but also achieved more financial success than emotionally unintelligent leaders. And the difference wasn’t a small margin either. Leaders who were ranked by their employees as emotionally intelligent had a 9.35 percent return on assets (ROA) over a two-year period. This value was almost five times more than leaders who were perceived as emotionally unintelligent, who averaged only a 1.93 percent ROA.

Your employees will have more empathy for you, and vice versa. Why is this important? It’s simple. Workers who feel valued produce the best results, and emotionally intelligent leaders show that they value their workers through their emotional intelligence. For example, an emotionally intelligent leader might allow an employee to take unexpected time off during a family tragedy, facilitating that employee to feel valued and mentally prepared to do their best work when they return to the workplace. If you’re an emotionally intelligent leader, then employees will be much more understanding when you have to make the brutal decisions all leaders sometimes have to make, such as firing an individual, announcing pay cuts or enacting layoffs.

Overall, emotional intelligence is a key – and sadly, an often overlooked – aspect of successful leadership, and hopefully this article has demonstrated the importance of emotionally intelligent leadership on a large scale.

If you’re a business owner or entrepreneur struggling to become the leader you know you can be, and you liked this article, then you might also be interested in some of the services we provide. Through providing resources like funding and consulting to small and medium businesses, HJR Global helps businesses and their leaders achieve their true potential. To learn more about what we can do for you, click here.