You probably have a pretty good idea of IQ (Intelligence Quotient) – the standard measure of intelligence. However, emotional intelligence, or EI, measures a variety of traits and characteristics that can identify potentially-successful entrepreneurs – individuals with the characteristics that will help them succeed in growing a business long-term.

People with high levels of EI can recognize and use their emotions and the emotions of others to bring about successful business outcomes. Emotional intelligence measures five broad categories of personal traits:

  • Mindfulness: self-awareness of one’s impact on others
  • Self-regulation to manage and control emotional responses
  • Social skills to facilitate meaningful business interaction
  • Empathy to recognize emotional needs of others
  • Motivation: drive, a reason to get up every morning

Rutgers psychologist and author of several books on EI, Daniel Goldman, stated in The Harvard Business Review, “The most effective leaders are all alike in one crucial way: they all have a high degree of what has come to be known as emotional intelligence.”1

The Harvard Business Review called emotional intelligence a “key leadership skill,” and today, many employers look at personality traits more closely than in the past. EI is considered a yardstick by which employees move up, customers and clients are engaged, and, as a key leadership skill, it becomes one of the core qualities of a well-run business.

The Importance of EI

In the past, intelligence was considered the most accurate predictor of business success. Smart people make smart business decisions, right? Well, some do, some don’t. We’ve probably all met really smart people who don’t manage others as effectively as some with lower IQs.

Traditional definitions of intelligence are, indeed, one component of business success. The small business owner must know what he or she is doing, right from the start. Real world experience is also a part of workplace success. Experience often creates a network – a group of individuals and companies who will work with you as vendors, consultants, retailers, and employees.

Emotional intelligence, however, relies on a variety of traits. IQ may predict how effectively we learn, but it can’t measure how effectively you employ emotions to improve business performance – your emotions and the emotions of others.

Successful entrepreneurs and small business managers have high levels of EI. They empathize with coworkers, they recognize the emotional needs of clients, and they understand their own emotional needs and how to manage those needs to best effect.

Because there’s no ego involved with EI, managers with high EI aren’t threatened by a good idea that comes from an unexpected source, like a rival or a subordinate. Being open to input from others can give them an advantage over their competition.

Highly intelligent entrepreneurs often run out of energy before reaching business success. They may be smart, but if they’re high-strung and driven, they may have an emotional breakdown along the road to success. Being able to manage personal feelings lowers the flame-out rate and can keep entrepreneurs in the game longer.  

Emotional intelligence is an awareness of yourself, your strengths and limitations, your impact on others, your drive, and your ability to effectively engage others – all important aspects of a growing business, and important traits of many successful entrepreneurs.

IQ is not the only way to predict success. In fact, EI may even be more important.