Emotional Intelligence in Companies: Why is it Essential for Effective Leadership?

This article was originally published in Spanish on Entrepreneur.com. Read the original version HERE.  

In a startup environment, where pressures are constant and the pace is relentless, a leader’s emotional intelligence can make a substantial difference. While researching a company and its operations, it is natural to focus on innovation, strategy, and financial growth. However, there is a fundamental component that is often overlooked but essential for any emerging leader: emotional intelligence (EI).

Emotional intelligence, a term popularized by Daniel Goleman, refers to our ability to recognize, understand, and manage our own emotions, while also recognizing, understanding, and influencing the emotions of others. In his book “Emotional Intelligence,” Goleman argues that EI can be as important, if not more so, than the Intelligence Quotient (IQ) for success in life, particularly in leadership.

“In the realm of startups, where the pace is dizzying, and pressures are constant, a leader’s ability to manage their emotions and empathize with their team can make a substantial difference,” notes Diane Garza, Executive Coach and CEO of iCatalyze, a consulting and training company for high-performance teams.

Self-awareness and decision-making

One of the main facets of EI is self-awareness. “By being aware of our feelings, we can identify how they affect our actions. A leader who does not understand their own emotions may act impulsively, which can, in turn, have repercussions on the team and the business,” says Diane. Furthermore, self-awareness enables greater flexibility in decision-making and better adaptability to changes, crucial skills in the business world.

Empathy and team well-being

Travis Bradberry and Jean Greaves, authors of “Emotional Intelligence 2.0,” emphasize the importance of empathy in effective team management. Empathy is not only about understanding the emotions of others but also acting accordingly. In a startup environment where collaboration is essential, a leader with empathy can help maintain team morale and face challenges with a more humane perspective.

Relationship management and business growth

In addition to self-awareness and empathy, effective relationship management is a valuable skill in emotional intelligence. Leaders with high EI can build and maintain stronger relationships with their teams, investors, clients, and other stakeholders, which can be crucial for sustained business growth.

“In the world of companies, where innovation and adaptability are fundamental, it is essential for leaders to develop and foster their emotional intelligence. The ability to understand and manage our emotions and those of others helps enhance leadership effectiveness, but also promotes a healthier and more collaborative work environment,” concludes Diane Garza.