How SME leaders can leverage emotional intelligence

Emotional Quotient, better known as EQ, is a measure of emotional intelligence and one of the six leadership objectives for business leaders including those of small and medium enterprises (SMEs) to manage growth. Is it the secret sauce or the rare ingredient, which is good to have but is elusive?

EQ is a critical skill for a leader irrespective of the field but is now that it is taking centre stage as a must-have leadership. Long seen as a touchy-feely soft aspect that is good to have in non-turbulent times, it has been proven to deliver substantial results in financial and non-financial terms.

EQ is the best predictor of performance—80 percent of the top performers have high EQ as compared to 20 percent of the bottom performers.

A popular term used in leadership development, EQ is described as a person's ability to manage their feelings and emotions so that those are expressed appropriately and effectively.

Leaders also should have the ability to understand their and others’ emotions and learn to use them to solve problems or drive creative thinking.

It requires knowing how to deal with our emotions and how to respectfully communicate with others. While there are books and courses on emotional intelligence, it is not easy to improve one’s EQ without some hard work.

While empathy is about knowing what someone else is feeling, EQ has mainly three components:

1 Self-awareness: To know what you are feeling, and understand why you are feeling that way.

2 Self-regulation: It is about handling your emotions and being attuned to them.

3 Relationship management: To put it all together so that you can collaborate with others. It includes social awareness, which can be broadly described as an ability to read social cues like empathy, service orientation, etc.

One of the components, empathy, is more commonly used in leadership talks following the coronavirus outbreak.

We gravitate towards people who display empathy and tend to trust them more. Research shows it is important for everyone and gets used liberally in employee engagement, innovation, and well-being talks.

While leaders need a diverse set of skills, empathy is the underpinning of many of those skills.

Empathy is also one of the most misunderstood and misrepresented emotions. It is an invisible emotion. For instance, people go red with anger, their faces droop when they are sad, and there is a broad smile or laugh when they are happy. But empathy is invisible—you cannot always see it. This makes it difficult to sense when empathy is at work. Empathy is an asset to have and maximising is what people aim for.

However, there is a word of caution here. There are some surprising downsides to empathy. Empathetic people have a lot of empathy for others and good intuition but may have difficulty setting boundaries. While they are keenly aware of others' emotions, they experience those emotions personally. This has been proven to have unhealthy consequences.

Self-awareness: Are you in touch with your emotions? How do the feelings manifest in you? Do you feel your stomach tightening? Is there a lump in your throat? Are you breathing faster? Understanding them holistically will increase self-awareness.

Self-regulation: Having the flexibility and adaptability to detect emotional inputs, a process that and then appropriately respond are the processes that help self-regulation. What triggers your emotional world? What makes you mad, sad, glad, or angry? The more aware you are of the triggers, the better you can control them.

Relationship management: Are you aware of how you manage yourselves and your relationships? Being curious about people, reflecting on the judgements one makes and understanding the reasons for it would form the core of relationship management.

How can you induce desirable behaviour in others and form trusting bonds and collaborate successfully? Recognising and understanding your emotional states, and detecting and comprehending others’ states accurately will help enhance this aspect of EQ.

One question that may arise is, “Does a manager’s EQ matter for an SME’s business practices?” Studies have shown that emotions are also a data point about the context in which we operate and they affect business practices.

These are felt most strongly in marketing practices while these have relatively less effect on financial planning where hard data points are more useful.

If leaders can recognise their patterns of behaviour, their emotional triggers and regulate their emotions, they can maintain optimism. And, if they can also detect the patterns and triggers and respond in an enabling manner, they can effortlessly build that elusive trust and psychological safety for their employees.