Emotional intelligence in business

When thinking about what makes an individual succeed in business, traits such as focused, confident and persistent emerge as vital components to enacting positive change on an individual and organisational-level.

Yet unless an individual can also form effective working relationships with others, these traits lose their power.

The key to developing these relationships may be emotional intelligence (EI).

EI refers to a set of psychological competencies that increase emotional and social effectiveness. Those that are high in EI are good at regulating emotions in themselves and others, and tend to be flexible and adaptive in stressful situations.

EI is not a new discovery; the term first appearing in a 1964 paper by Michael Beldoch. In 1995 it was popularized by Daniel Goleman’s Emotional Intelligence: Why it can matter more than IQ, in which he argued that emotions play a critical role in thought, decision-making and individual success. Those who are high in EI experience better relationships, lower levels of stress and increased well-being. EI has also been associated with improved job performance, efficient work teams and superior work outcomes.

We talk to one of the School of Management’s experts on EI, Associate Professor Peter O’Connor.

Where does emotional intelligence come from?

Like most psychological characteristics, EI is a combination of nature and nurture. Researchers have found strong evidence for a genetic component, as well as the strong role that environmental factors play in the development of EI. For example, healthy emotional development in children, which is a precursor to high EI, is strongly related to the emotional availability of attachment figures such as parents and grandparents.

How is emotional intelligence measured?

EI is usually measured in one of two ways. Either using an EQ test, which measures EI in a similar way to how intelligence is measured in an IQ test (i.e. in terms of difficult problems and/or puzzles). Alternatively and more commonly, EI can be measured using self-report questionnaires similar to how personality traits are measured. For example, respondents might indicate how strongly they agree with several questions designed to measure EI, such as “I am good at managing negative emotions when facing stressful situations at work”.

How is emotional intelligence cultivated? How can managers encourage the development of it?

There is a growing body of research indicating that emotional intelligence can be cultivated. For example, an influential study on managers demonstrated that even a short four day training program can result in substantial improvements in EI. Similarly, another study found that a brief training program resulted in increased EI six months later. The most comprehensive study on EI training found that, when compared to a control group, the intervention group had lower cortisol levels, enhanced well-being and improved interpersonal relationships one year after the intervention. However it seems that for EI training to be effective, participants must have some EI to begin with. Those with very low EI seem to be the poorest candidates for EI training.

How can it predict leadership and job performance?

Not surprisingly, leaders with high EI are popular with their subordinates and are effective performers in organizations. They’re usually good listeners, do not over-react to setbacks, are supportive, and due to their ability to influence the emotions of others, have the ability to motivate their subordinates.

Employees with high EI are also good performers, particularly in jobs characterized by high levels of stress. When operating in stressful situations, employees with high EI are likely to adopt effective coping strategies such as task-focused coping. This means that individuals with high EI are not overwhelmed when faced with stressors; but rather have the ability to rationally plan out how they will deal with the stressors they are facing.

Does emotional intelligence have a dark side?

Since one aspect of EI relates to the ability to influence the emotions of others, it is plausible that EI could be used for ‘dark’ purposes such as manipulating others for self-gain. Research shows that people are less likely to scrutinize high EI leaders who have an ability to inspire. Research also shows that people high in Machiavellianism are most harmful when they are also high in EI.

On a more positive note, research shows that the light side to EI is much more prominent than the dark side. Although there is a subset of emotionally intelligent individuals who are manipulative (particularly those who are low in a trait called agreeableness), it turns out that this subset is only a minority of those who have high levels of EI.