Know thyself. It’s an ancient adage, the basis for bestselling self-help books and therapeutic techniques. Today we have generally come to accept that self-awareness, empathy, and other attributes that make up emotional intelligence are good things. They contribute to relationships that are more successful.
But if you’re an entrepreneur or executive, is all of that really necessary? Aren’t ideas, IQ, drive and self-confidence the qualities that equal success in business today? Emotional intelligence may be nice to have as a leader, but is it crucial?
After 15 years working at a venture and growth equity investment firm, I’ve seen that emotional intelligence is critical for entrepreneurs and executives to get a business funded, bring it to life, nurture it to success, and ensure its continued prosperity.
Leadership as an Emotional Experience
Algorithms. Big Data. Networks. The Internet of Things. Like the first Industrial Revolution, our world is being reorganized by new types of innovation.
However, human nature hasn’t really changed. A recent article in the Harvard Business Review suggests that the emergence of artificial intelligence ironically makes emotional intelligence in business even more important. Why? Because “Skills like persuasion, social understanding, and empathy are going to become differentiators as artificial intelligence and machine learning take over our other tasks. Unfortunately, these human-oriented skills have generally been viewed as second priority in terms of training and education.”
A 2015 article in Fast Company cited several studies that claim lack of emotional intelligence is among the primary causes of failure among executives. Conversely, high emotional competency leads to success for people in all levels of an organization. It has been shown to lead to higher salaries, higher productivity, higher sales results and even to fewer errors in factory assembly lines.
EQ in Leadership
As an executive, you are responsible for forging and maintaining relationships with people in many different roles, inside and outside of the company. Employees. Investors. Board members. Other executives. Partners. Suppliers. Customers.
The role of a company leader can be daunting. For many industries―technology, for example―the pace of business and market disruptions continue to accelerate. Executives with years of C-level experience must grapple with changes in the workplace (e.g., increased focus on diversity and inclusion; work/life balance; impacts of globalization) that test their interpersonal skills. Entrepreneurs who have never been responsible for more than a handful of employees and whose startups quickly take off must understand their leadership styles and shortcomings―or suffer consequences.
Measuring EQ
How do you measure your emotional intelligence or emotional quotient (EQ) as a leader to identify strengths and weaknesses?
There is no quantitative measure for EQ as there is, for example, with IQ. Go online and you’ll find that psychologists, coaching firms, and universities offer quizzes to test your EQ. However, most of these more closely resemble the types of quizzes you see on BuzzFeed.
EQ for Leadership
So how do you begin to understand and cultivate your EQ? The good news is that, like many skills, EQ can be developed. A recent article in the Huffington Post shared some tips on fostering EQ for executives:
• Ask for feedback from others often and openly
• Focus on other people’s perspectives and show interest in others
• Carefully read the dynamics of each situation, the people and your surroundings
• Learn what your emotional triggers are
• Nurture relationships; acknowledge the needs and feelings of others
• Welcome the difficult conversations and give direct, constructive feedback
Richard Reid, chief executive and clinical director of Pinnacle Therapy, is a big proponent of ‘active listening’. Some of us are so focused on our own ideas or decisions that we find it difficult to hear other perspectives and ideas. The active listener concentrates on what others are saying to fully understand their needs and asks questions or makes affirmations to be sure the other person knows they have been heard. This leads to better and more successful interactions, whether discussing an assignment, delivering a presentation, or pitching investors.
EQ in the Boardroom
The importance of EQ in the workplace extends to the boardroom. Leadership coach David Howells has written about the “boardroom beasts” that wreak havoc in board meetings through their lack of decorum and inability to work collaboratively. He wrote a list of questions for board members to ask themselves to gauge their individual EQ. The questions are an exercise in introspection and include:
• To what extent have I thought about the way I come across and the impact of that on my ability to win over other board members to my point of view?
• How important is it to me to feel respected by my fellow board members?
• What is important to me at this board meeting and what isn’t?
• What alternatives have I considered in relation to each agenda item and my reaction to every other board member?
• How will others feel if I get my way and how will they feel if I don’t?
Is There a Dark Side to Emotional Intelligence?
While emotionally perceptive individuals can benefit from the introspection they gain, too much EQ and profound empathy can sometimes lead to increased stress levels if one isn’t careful.
In a study published in the September 2016 issue of Emotion, psychologists Myriam Bechtoldt and Vanessa Schneider of the Frankfurt School of Finance and Management discuss how emotional intelligence is a useful skill to have, as long as you learn to also properly cope with emotions — both others’ and your own. For example, some emotionally perceptive and sensitive individuals may assume responsibility for other people’s sadness or anger, which ultimately can increase stress to unhealthy levels.
Bechtoldt explains to readers that they need to keep in mind that they are not responsible for how others feel. This is an important piece of advice when navigating between empathetic leadership and taking on the stress of those with whom you are collaborating.
Creating an Environment that Fosters EQ
At the online publishing platform Medium, the head of engineering Dan Pupius came up with an acronym to focus the company’s hiring process on people with a high EQ. They now screen for candidates who display curiosity, awareness, resoluteness, and empathy (CARE).
And at our firm, Norwest Venture Partners, our belief in the value of EQ is so strong that our Portfolio Services team is focused on fostering these and other skills among the entrepreneurs, executives, management teams, and investors in our network. We have implemented a feedback loop where everyone with whom we interact is encouraged to share his or her experiences and critiques. Openness is part of our culture. And it should be part of yours because life isn’t an algorithm; it’s an emotional experience and we’re all learning and growing together.
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