Emotional intelligence boosts business growth and it should be prioritized during economic downturns

Emotional intelligent people can identify, manage, evaluate, and understand their own emotions and the emotions of people they interact with. We can think of emotional intelligence as the combination of your personality, charisma, and social awareness. When Salovey and Mayer two of the global experts created the expression emotional intelligence in 1990, they described it as "a form of social intelligence that involves the ability to monitor one’s own and others’ feelings and emotions, to discriminate among them, and to use this information to guide one’s thinking and action." Another way to think of Emotional Intelligence, is to combine, Self-Awareness + Social Awareness, and Self-Management + Relationship Management. No matter what definition you follow, most subject matter experts including TalentSmart, agree that among 33 critical professional skills prioritized, emotional intelligence is the leading differentiator in work and personal performance, and it is responsible for over 60% of people professional’s and personal achievements.

Unfortunately, over the last few years, because of the compound effect of different crises that occurred since 2020, well-being, self-control, cautious planning, and emotional health have declined causing both emotional and financial loss. As people get more isolated, and struggle financially, emotional intelligence continues to suffer, with negative impacts across business, personal growth, and social inclusion. Over the next 3-4 quarters, businesses and people will continue to experience hardship as market volatility as recession become more pronounced. With this, the overall societal emotional health will worsen. Following, I will provide some statistics and guidance on how to avoid this crisis and how to tap into the transformative personal and business growth embedded in emotional intelligent decisions. 

IQ is overrated and not sufficient to succeed

Let’s first clarify why IQ is not enough. We live in a society where IQ continues to be prioritized, and where high IQ is believed to be the engine for growth and success. However, based on existing research and quantitative analysis, IQ by itself is not a very good predictor of career performance. According to Steve Hunter for instance, in the best-case scenario, IQ accounts for about 25 percent of the likelihood of individual success. Other specialists estimate that that 10 percent may be a more realistic estimate of success based on IQ. 

Statistics of emotional intelligence impacts

The following statistics on the other hand demonstrate why Emotional Intelligence is the key for productivity, growth, and success of an individual and of businesses. Here are some impactful statistics taking from leading emotional intelligence such as Social.com:

• 90% of top performers have above average emotional intelligence.

• 75% of the Fortune 500 use emotional intelligence training.

• Emotionally intelligent people earn $29,000 more on an average per year.

• Every point increase in emotional intelligence adds $1,300 to an annual salary.

• Individual and business coaching investment point to a 7X ROI within 12 months.

• Emotional intelligent marketers and investors perform better during economic crisis.

Why Emotional intelligence is the game changer during crises?

As we continue to be affected by market volatility, and economic decline, people and businesses tend to operate in “silos” to protect themselves from the “unknown”. This is the opposite of what we should do! We should assess the current market, and economic conditions with emotional clarity (which is the ability to identify and label the mood that is being experienced), to be able to deal with it and establish a clear growth path forward. Those businesses and individuals who perceive and label accurately the ongoing crisis, and better understand others’ emotions and challenges, are better prepared to respond flexibly to economic and societal changes. 

In marketing for instance, good emotional intelligence manifests itself with a clear understanding of customer needs, and with a strong brand awareness and users’ engagement. Essentially, good marketers are social listeners, as they prioritize what other people have to say about their brand making changes based on their feedback. Those companies that pay attention to customer emotions, changes, and choices tend to adjust to ensure they deliver what the market wants resulting in deeper client’s brand loyalty. 

In terms of investment, emotional strength, and commitment to your strategy during recessions are key to preserve capital and to generate alpha. Those investors that succeed are normally better able to self-control and self-rely particularly during down-turns. Capital markets are affected by collective decisions, emotions, and planning. Understanding how other investors are feeling, why they are trading specific stocks and predicting what they will be doing next all involves emotional intelligence. The opposite is true for failure in investment decisions. Those decisions guided by impulsiveness, stubbornness, anger, fear and indecisiveness typically lead to great financial losses.

Conclusion

There is abundant evidence that emotional intelligence will enable people to perform better in the job as well as in life. Times of crisis are times of change where new “social contracts” are established, and you should not shy away from exploring new social interaction and partnership as these would shape your lives and business going forward. Our final message is, invest in emotional intelligence and cultivate a mindset of exponential growth, ethics, stress management and steady decision making. This will allow you to navigate crises with more profit, impact while attracting positive people. One of the best emotional intelligence advice Warren Buffet received from one of his friends was “you can always tell someone to go to hell tomorrow”. In other words, control your emotions and let go of issues that are not essential for your growth