We’ve all heard the talk: Emotional Intelligence, aka EQ or EI, is at the top of the list of skills we should be hiring for. Made up of a handful of so-called “soft skills”, EI is critical to business success. Or so they say.
But is it really?
Soft skills certainly sound like a nice-to-have, but are they actually a business imperative? Does EI translate into a quantifiably better business — and a better bottom line?
The answer is yes.
Your organisation’s cumulative EI directly influences your business’s ability to sell, acquire and keep talent, adapt to change and innovate, and connect meaningfully with customers. Oh, and it supports the development of a highly productive organisational culture, too.
But wait. What exactly is Emotional Intelligence? It’s our ability to identify and manage our own emotions, and those of the people around us. It takes a range of different forms in everyday life, but the bottom line is that EI smooths the interactions and relationships between people. And that means in people-focused contexts, like today’s workplaces, it can have a big impact.
Let’s see exactly how.
1. Raise sales performance
Ask any salesperson and they’ll tell you sales is about relationships. Making a sale requires connection-building, negotiation, patience, and a deep desire to understand the motives of others.
Now, think about the salespeople in your organisation. They likely work very hard, under great pressure for prolonged periods, and face rejection on a daily basis. To survive — let alone thrive — in those conditions, they need to be adept at self-management. And that’s what EI is all about.
According to Saleshacker, high-EI salespeople are aware of their own emotional states and how they impact on others. They can also read customers’ emotions well, and adapt their approach accordingly, to establish strong emotional connections, stay positive in the face of challenges, and delay gratification long enough to achieve bigger goals. Ultimately, this leads to better customer retention rates, as well as satisfaction and success.
Still not convinced? Studies have shown again and again that EI is correlated with sales performance. As far back as 1997, research showed the dollar difference EI could make. For example, insurance company “sales agents who were weak in emotional competencies such as self-confidence, initiative and empathy sold policies with an average premium of $54,000, while those who were very strong in at least five of eight key emotional competencies sold policies worth $114,000 on average.” And with EI training, sales performance can improve significantly — in the case of one study, by 12%.
And with EI training, sales performance can improve significantly
2. Find — and keep — star performers
When we think about EI, we might imagine it’s valuable in staff acquisition and retention because, hey, people like to work with people they like! But EI has a much bigger role to play in identifying and retaining high performers. The “soft” skills of self-motivation, -management, and -awareness, for example, all affect an individual’s ability to succeed in complex — and competitive — work environments.
So it’s no wonder EI is correlated with job performance. As Travis Bradberry, who co-wrote Emotional Intelligence 2.0, writes in Forbes, “90% of top performers are also high in emotional intelligence. On the flip side, just 20% of bottom performers are high in emotional intelligence.” He also cites a Talentsmart study that found that “emotional intelligence is the strongest predictor of performance, explaining a full 58% of success in all types of jobs.” Some have suggested that EI assessment should be prioritised above IQ in organisations’ hiring processes for this reason.
EI has also been shown to correlate with staff retention, regardless of job involvement (that is, how autonomous, self-managed and empowered staff feel at work). Entrepreneur cites a study which lists as the top three reasons people leave a job, “friction with managers, poor internal communication and lack of empowerment via workplace/cultural policies.” On the other hand, “50 percent of American office workers have stayed at an unsatisfying job because of positive emotional relationships.”
The message here is clear: not only does an individual’s EI help predict their own performance, but the EI within your organisation can impact how long people stick around, and what they contribute while they’re there.
Not only does an individual’s EI help predict their own performance, but the EI within your organisation can impact how long people stick around, and what they contribute while they’re there
3. Embrace organisational change
Change is a challenge at best. On occasion, it can be downright terrifying. In some cases, news of change can cause mass resignations, as in the case of a US-based tool manufacturer that endured a 40% attrition rate of experienced staff, in part because established employees decided they couldn’t adapt to changes the company was making.
Yet change is essential to business competition and growth. And “soft” skills, including a person’s ability to identify and manage their emotions, to remain open to unprecedented experiences, and to see new challenges as opportunities to grow, have a direct effect on how they handle — and make the most of — change. Taken a step further, an ability to embrace change can become an eagerness to seek out new experiences, experiment and innovate. Which is, after all, what countless businesses desire.
Again, the EI of the individuals in your organisation is reflected in the “emotional capability” of the organisation itself, including the “norms and routines … related to feeling”. In short, a change-confident group of people will contribute to a change-embracing organisation.
4. Deepen customer care
We all know the old adage, “it’s cheaper to retain customers than attract new ones.” Regardless, this 2016 NewVoiceMedia study reveals that “US companies providing poor service are letting $62 billion slip into the pockets of their competitors every year.” How can organisations resist service-related customer churn? Hire and train for EI.
How can organisations resist service-related customer churn? Hire and train for EI.
EI skills, from empathy and perspective-taking, to motivation and resilience, are clearly important in a working environment where “the customer is always right” and the level of emotional labour is high. Not surprisingly, a study reported by TalentSmart indicated that customer service employees tend to be highest in EI (while company Directors were among the lowest).
And those “soft” skills translate directly into customer retention, with NewVoiceMedia survey respondents saying they “would be more loyal (70 percent), would recommend businesses to others (65 percent), would use businesses more frequently (43 percent) and would spend more money (40 percent) if provided with better customer service.”
5. Evolve organisational culture
Each of the skills we’ve mentioned so far, from emotional self-awareness and empathy, to resilience and willingness to change, aren’t bolt-on, high-level skills. They’re the foundations on which individuals lives — and the businesses they work in — are built.
We’ve seen that EI affects a company’s ability to attract and retain high performers; that it underlies sales performance, and customer service and retention; that it plays a significant role in that organisation’s ability to innovate ahead of competitors and adapt to change.
We’ve seen that EI affects a company’s ability to attract and retain high performers; that it underlies sales performance, and customer service and retention; that it plays a significant role in that organisation’s ability to innovate ahead of competitors and adapt to change.
If you think those characteristics sound like the hallmarks of a high-performance team, you’re right. And such a team’s culture is determined by its members. Culture is embodied at all levels, of course, with leaders playing a crucial role. Remember the US-based tool manufacturer we met earlier? Its owner and leader, Ray Coombs, admits that as part of the radical cultural change he effected, “I had to change the way that I think, the way I look at myself, the way I look at my business as a whole... I had to change the strategy and get my organization to buy into that strategy… [and] I had to stop being such an a--hole.”
This is the clincher with EI: it can be learned and developed. And those individuals and organisations who take the plunge are likely to reap the benefits many times over in the months and years ahead.
