We share insights into how possessing an ability to manage your emotions effectively is critical for business development.
In fiercely contested markets, where every business interaction and decision is considered to be calculative and based on real-time data, the question remains whether emotions can be a differentiator in business.
In the strict sense of the word, emotions are defined as being instinctive or intuitive, distinguished from reasoning and knowledge. While some schools of thought propagate the ‘emotionless approach’ as a ‘guarantee’ of fact-driven decision-making, we examine whether dispassionate reasoning can be combined with emotional intelligence to bring about the best possible outcomes.
Since its discovery in the field of Organisational Psychology, Emotional Intelligence has been one of the most widely and extensively studied psychological concepts. Emotional intelligence (EQ) is defined as the capability of individuals to recognise their own and other people’s emotions, discern between different feelings and label them appropriately, use emotional information to guide thinking and behaviour, and manage and/or adjust emotions to adapt to environments or achieve one’s goals.
Organisational psychologists, whom have extensively studied the role of Emotional Intelligence on company parameters, propagate the importance of EQ over IQ for overall organisational success and development.
Mc Clelland (1999) claims that when supervisors in a manufacturing plant received training in emotional competencies such as how to listen better, the overall lost-time accidents decreased by 50 per cent and the employee grievances rate went down from fifteen per year to three per year. The overall productivity goals of the plant also exceeded considerably.
Another research carried out by The Carnegie Institute of Technology, showed that 85 per cent of an organisation’s success was due to factors such as skills in human engineering, personality and ability to communicate, negotiate and leading a team. Only 15 per cent success was recorded due to technical abilities of the employees. This result showed that the ability to connect emotionally with employees and clients alike contributes more to the success of any leadership or business position.
The emotionless approach to business, on the other hand is rather simple. It is an approach that is actually unhealthy for business houses to follow when their most important resource is human and the most important sale driving force is customers. Time and again, research has demonstrated that people would rather do business with a person they like and trust rather than someone they don’t, even if that person is offering a better product at a lower price.
Results from various Customer Satisfaction Surveys show that the sales experience is one of the top drivers in customers’ purchasing decisions. Customers prefer buying from sales professionals with whom they feel more comfortable. Customers don’t mind paying more for a product or buying a higher value product than they initially intended to purchase if the sales professional is seen indulging in behaviours such as welcoming the customer into the shop, talking, connecting and understanding the requirements of the customer instead of randomly taking them through displayed products.
Sales professionals who rate high on use of soft-skills show better conversion rates than their counter parts. To support the claim, a study found that sales agents who were found weak in emotional areas such as self-confidence, initiative, and empathy sold insurance policies with a lower overall average premium in comparison to sales agents who were strong in 5 of 8 emotional competencies measured.
Emotions are also important for an individual who is looking for a business investor. Most big investors prefer to invest in the businesses of individuals who are “emotionally invested” in their business ideas and are passionate enough to pursue it through thick and thin.
Most investors, when interviewed about what exactly they look for apart from the prospects of profitability while investing in a new business idea, said that they look for “passion of the entrepreneur”, because it is impossible for an entrepreneur to drive a business without passion. The best of entrepreneurs are living, breathing, embodiment of their businesses. They are people who drive their business on stubborn thoughts of never giving up and with the desire to change the world around them. Organisational research studies also show that people with strong emotional intelligence are more likely to succeed with their business ideas than those with high IQs or relevant experience.
While a lot of research on emotional intelligence is done at an executive level, the higher up the organisation, the more crucial emotional intelligence abilities are as its impacts are felt throughout the entire organisation. Multiple research concludes that emotional intelligence makes leaders more effective and successful. For example, a study by Trehan, Shrivastav (2012) found that emotional intelligence to be an important factor for leadership, motivation, communication, decision making, interpersonal relations, and change management at 99 per cent level of confidence. Cartwright (2008) subsumed the met analysis of various studies with the statement that the ability to perceive emotion is a factor associated with effective leadership. Clarke (2010) also proved the relationship between emotional intelligence and transformational leadership with personality and cognitive abilities as control variables.
Researcher Bin Sayeed (2009) summarised that leaders are most likely to lead their followers if they have insights into their needs, values, and hopes. This insight may be facilitated through a higher level of emotional awareness and sensitivity.
Leaders can create emotional responses in the followers, communicate and instill commitment toward a common vision and create shared norms. Focusing on individual followers, leaders should be supportive, considerate, empathetic, caring, and be given personalised attention. These requirements may be easier for an individual who is high on emotional intelligence and is able to accurately perceive and understand others’ emotions, while managing his/her own emotions.
Thus we see that hiring emotionally intelligent individuals as against those with higher IQ or relevant experience brings with the advantage of having individuals who are internally driven with high level of self- awareness and ability to regulate their own emotions effectively. These individuals possess good social skills that enable them to relate and find common ground with a wide range of people, thereby making them great team players. Finally, emotionally intelligent employees are high on empathy. An employee who has empathy will have an awareness of the feelings of others and will consider these feelings in their words and actions; reducing potential for conflict.