“Knowing others is intelligence; knowing yourself is true wisdom. Mastering others is a strength; mastering yourself is true power. If you realize that you have enough, you are truly rich” – Lao Tzu.

Advances in research continually bring forth interesting concepts for entrepreneurs to learn something new. One such concept which has caught my attention is ‘Emotional Intelligence (EI)’. In simple words, it is the ability to identify and manage your own emotions as well as understand and influence the emotions of others around you. It allows someone to differentiate between different kinds of feelings and use them appropriately (for achieving goals). Primarily, it is supposed to be made up of four elements – self-awareness, self-management, social awareness, and relationship management. EI was thought of by John Mayer and Peter Salovey in 1990. Almost a decade later, this ability was recognized to be highly essential for a business leader. Let us know more why.

·        It encourages emotional independence

Possessing Emotional Intelligence keeps an individual in charge of his/her thought process. It is essentially the ability to stay aware of all the feelings that they undergo. When practiced, leaders can control their emotions better, especially while handling problems. They are also unlikely to rush into decisions and provide well thought of responses. At the same time, they are not afraid of voicing their opinions. The clarity of emotions makes them non-judgemental and honest as a person.

·        It develops leadership qualities

EI inculcates empathy, respect for others, confidence, and other such vital leadership qualities. Organizations need a solid person to guide the workforce at all times. Hence, a leader needs to be a multi-dimensional personality. What EI does is it creates self-awareness. So the leader exactly learns how to model his or her behavior according to the changing circumstances. They are also self-motivated which is another excellent quality required for leading a team.

·        It promotes communication skills

Once a person is able to manage the thought process, being articulate comes naturally. As a result, leaders with high EI have excellent communication skills. They can clearly convey ideas. They also have the skill to understand when the team is not able to comprehend the messages and can then accordingly alter those for successful communication. EI also means having awareness about one’s verbal as well as non-verbal communication skills, something which is actually critical for a business leader.

·        It enables crisis management

Having EI implies resolving conflict situations with a calm mind. It gives the ability to self-regulate one’s thoughts and not react impulsively. Thus, a leader is able to handle highly charged discussions without taking sides and neither downplaying anyone else’s opinions. Instead, he or she is compassionate, shows respect towards others’ opinions, is able to realize all the viewpoints being professed, and eventually tries to make everyone involved see a more realistic picture.

EI is about going beyond the obvious qualities of a good leader. One of the examples of such personalities in the world who have successfully mastered the art of EI would include Kent Thiry of DaVita. He took over a kidney dialysis center company when it was on the verge of closing down and with the help of a highly acute EI, has managed to create almost 44% annual growth in earnings per share, the 6th highest of any Fortune 500 company. In fact, there is also Larry Fink of BlackRock who created the largest money-management firm in the world based on the attributes of EI.

There are several good types of research published on EI and I would like to recommend some reading material for more insights on this interesting topic. One would definitely be the study done by Daniel Goleman (who was instrumental in establishing the importance of EI to business leadership) with Richard Boyatzis and Annie McKee called ‘Primal Leadership’ (2001) which talks about a leader’s emotional state and the company’s financial status. Then there is ‘Building the Emotional Intelligence of Groups’, a research article by Steven Wolff and Vanessa Urch Druskat which talks about how EI can be consciously developed in a team by a leader. Such literature has given me different perspectives on this relatively new leadership necessity. Do share if you come across more about EI and how it has worked for certain businesses.