Emotional Intelligence: The Key For a Successful And Effective Entrepreneurship in Exponential Corporates

“Emotional intelligence, more than any other factor, more than I.Q. or expertise, accounts for 85% to 90% of success at work… I.Q. is a threshold competence. You need it, but it doesn’t make you a star. Emotional intelligence can.” (Warren Bennis)

Let’s suppose a conflict situation is ongoing at the workplace and you are called to manage it for the positive outcome of your business activity. Which behavior will have a better chance to succeed? The one that gives orders and criticizes your teammates while putting them under pressure and threat or the one that understands controls, and peacefully evaluates the situation?

The answer is clear; indeed, the above example brings directly into the topic of this chapter defying the concept of emotional intelligence (EI); the ability to manage, lead, inspire, motivate, support, and influence others. Although EI was mostly discussed in psychology, recently it became also popular in different disciplines from leadership, management, human resources, to development, training, and organizational behavior [1].

Understanding how EI translates into an essential leadership skill is crucial when considering those challenges brought by Industry 4.0 and digital transformation. Thus, whether you are an entrepreneur, leader of small corporates, or a collaborator, in this chapter’s book you will learn how to adapt and manage exponential changes and disruptive innovations leading to great business success.

What is Emotional intelligence (EI)?

The concept of emotional intelligence (EI) or emotional quotient (EQ) first appeared in a publication by Michael Beldoch in 1964. However, a proper model of EI was coined in 1990 by John Mayer and Peter Salovey, and later the term became popular with Daniel Goleman’s book of 1995 titled “Emotional Intelligence – Why it can matter more than  IQ.” EI refers to the ability to understand and manage emotions, but also it relates to the ability to recognize and influence the emotions of people around us. Thus, Goleman identified EI as a relevant skill to be applied in leadership saying “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. It’s not that IQ and technical skills are irrelevant. They do matter, but...they are the entry-level requirements for executive positions.” [2, 3] In fact, individuals with higher EI are capable of managing emotions, while using them to facilitate thinking, understanding, and even perceiving others’ emotions. Thinking about entrepreneurs, this skill would give them an extraordinary advantage, being the key to greater success. However, to become effective, entrepreneurs need to learn how to control, perceive and manage their emotions to influence relationships and situations positively and constructively. The American poet, Maya Angelou, said: “people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” [4]

Emotional intelligence and core components

“It is very important to understand that emotional intelligence is not the opposite of intelligence, it is not the triumph of heart overhead - it is the unique intersection of both.” (David Caruso)

The understanding of EI core components/competencies becomes relevant when defying EI and its importance in promoting effective entrepreneurship.

1. Self-awareness: refers to the ability to understand teammates’ strengths and weaknesses, as well as, to recognize how an entrepreneurs’ emotions can influence the team’s performance. Asking for feedback is a good method to evaluate an entrepreneurs’ performance, as well as, gaining insight into his/her behavior and how is perceived in the corporate;
2. Self-management: refers to the ability to manage emotions, especially in stressful and ambiguous situations, while maintaining a positive outlook. Although thinking and reflecting before reacting can be difficult in certain circumstances, learning how to manage and control emotions is worth to maintain a good team atmosphere;
3. Social awareness: refers to the ability to read and interpret others’ emotions and positively interact with them. Indeed, through empathy entrepreneurs can understand collaborators’ feelings and perceptions, with clear and effective communication. Being empathetic is a key in entrepreneurship; hence, an entrepreneur with strong empathy would show higher performance in engaging, coaching others, and in decision-making. Empathy gives great support to the team, as well as, grows the individual performance of the entrepreneur.
4. Relationship management: relates to the ability to influence, coaching, mentoring others toward optimal conflicts resolution and goal-directed behavior. Hence, identifying issues and honestly discussing them would help the management of any conflicts, while generating a peaceful and calm team atmosphere.

In short, becoming self-aware, aware of others’ emotions, able to control one's own emotions while influencing and managing the emotions of others are the needed qualities that make any entrepreneur emotionally intelligent.

Emotional intelligence is needed to develop effective entrepreneurship, engage teammates, and enhance team performance

“Emotional intelligence is your ability to recognize and understand emotions in yourself and others, and your ability to use this awareness to manage your behavior and relationships.” (Travis Bradberry)

The development of EI in entrepreneurship is extremely important. Indeed, EI helps entrepreneurs in:

1. Adapting to changing environments, circumstances, workplaces, and structures while diversifying their role and guiding the role of others. Adapting to changes is an essential skill that entrepreneurs need to develop when facing a variety of situations and challenges (e.g., 21st-century) that require the regulation of emotions (e.g., stress, anxiety) to a proper outcome and team empowerment;
2. Empathizing with others’ emotional states would allow entrepreneurs to make responsible and thoughtful decisions. Supporting the team by sharing a common vision and mission. Entrepreneurs with strong empathy can even influence and direct the behavior of the team toward achieving long-term goals. Hence, building solid and trusted relationships with co-workers is central to a successful business.
3. Being internally aware of emotions, feelings, and weaknesses would help entrepreneurs to truly realize their capabilities but also accept their limits. Being more rational and self-aware will reinforce productivity, attitude toward the team, and judgment.
4. Self-regulate their emotions is essential when making conscious and delicate decisions. Training EI on regulating emotion would help entrepreneurs to “leave their ego out” while focusing on truly connecting with others, influencing and improving team performance and the corporate’s productivity.

Entrepreneurs that can connect emotionally with co-workers are effective because the ability to engage collaborators has the effect of positively enhancing the productivity and performance of a corporate, especially in managing and supporting each other in challenging situations (e.g., the Covid-19 pandemic). Emotions can be the protagonist in a variety of situations such as those characterized by change and uncertainty, interactions with colleagues, relationships, conflicts, effort, burnout, achievements, or failures [5].

Indeed, empathy was found to correlate with EI and positively related to performance, individual’s emotions, and the emotion of others. The true expression of emotion has a positive effect when connecting with others, even at the workplace. Team members that are emotionally disengaged bring disadvantages to the profit. Thus, to enhance empathy while supporting engagement, EI entrepreneurs should develop a few qualities such as considering the other’s point of view, being non-judgmental, trying to understand the other’s feelings, and communicating with more empathy (e.g., the understanding of the person’s feelings) [5].

Being aware of the emotional impact that behavior has on others is essential because it generates positive or negative emotions. Thus, to be effective, an entrepreneur should learn to assess his/her behavior and emotional status about the outcome to be achieved. Hence, positive emotions would support resiliency, creative thinking, learning new skills, and releasing negativity. On the other hand, negative emotions are an index of threats, issues, and provocations.

Learning to regulate negative emotions (e.g., the way to respond to an attack that would lead to conflicts and tensions), transforming them into positive feelings is a great capability that EI entrepreneurs should evolve to become effective. Furthermore, to strengthen emotional intelligence, team leaders might connect with their collaborators on a more personal level by understanding their motivation and encouraging it, valuing their point of view, embracing their perspectives and reasons through empathy. Focusing on building self-awareness, active listening, and willingness to understand and recognize the emotions of other individuals would transform a common entrepreneur into an EI effective entrepreneur that is able to understand him/herself as well as others based on authentic interactions and exchange of emotions [5].

Emotional intelligence and authentic leadership: the process of developing effective and successful entrepreneurs

“Emotions are a critical source of information for learning.” (Joseph Ledoux)

Despite the number of leadership theories and styles (e.g., authentic leadership, transformational leadership, transactional leadership, or inspirational leadership), what makes a leader effective are five elements: development of collective goals, supporting the appreciation of teamwork, encouragement of enthusiasm, confidence, positivity, trust, cooperation, valuing flexibility in decision-making processes and change, as well as, defying a concrete organization’s identity and profile [1]. Indeed, a successful entrepreneur (the group leader) is capable of developing goals that are shared by the team, while supporting members through self-confidence and positivity, welcoming and adapting to changes, likewise sharing a common vision and mission, toward the corporate’s purpose achievement.

Among different factors that differentiate leaders such as responsibility, flexibility, standards, rewards, clarity, and commitment, several leadership styles were identified and grouped into six main categories:

i) coercive/commanding: requires compliance and obedience;

ii) authoritative/visionary: influence people toward a vision,

iii) affiliative: aims to establish emotional connections and harmony within the team,

iv) democratic: encourage participation in decision-making,

v) coaching: develop and train people for the future while focusing on enhancing their strength and skills, and

vi) pacesetting: focused on the performance setting high standards [1].

However, different situations require the adoption of different approaches, and effective entrepreneurs can recognize the most suitable style to interface with that particular situation. Hence, EI represents this ability to recognize a circumstance and to adopt a particular leadership style accordingly. [1] In the table below (see Table 1) different EI characteristics, described by Goleman (2000) and revised by Stevenson (2014) [1] are described concerning a specific leadership style.

Table 1. Six Leadership Styles and Related Emotional Intelligence Skills - Revised by Steavenson (2014)

The importance of EI in organizations is mostly reflected in team performance. More work is usually performed in teams, but also teamwork requires discipline and persistence. Different leadership styles are needed to interact with different situations, tasks, and challenges that influence the interactions between co-workers. However, most of the time relations between colleagues lack friendship, trust, and mutual understanding, as well as, the importance of empathy is often underestimated (indeed, the status defines the power of someone). Likewise, a lack of active listening and clear decisions (mostly taken with ambiguity, without team participation), or a tendency to avoid difficult conversations are typically observed in the workplaces [1]. Thus, EI would be needed to reinforce effective communication and mutual support to enhance performance and productivity.

In this regard, a framework was proposed by Prati et al. (2003) [6, 1] to explain how EI influences leadership effectiveness. The framework works on three levels: 1) the leader, 2) the team, and 3) the effect of leaders and team, on the organization’s performance (see Table 2).

Table 2. How Emotional Intelligence Influence Leadership Effectiveness

Among the variety of leadership styles, authentic leadership appears very well related to EI, by sharing common aspects such as the importance given to self-awareness, genuineness, as well as, leaders with a mission-driven, goal-oriented behavior and focused on achieving long-term goals [7]. Indeed, EI is particularly relevant when developing authentic leadership [8] while promoting growth, success, and effectiveness. Thus, six EI skills should be considered and improved:

1. Self-actualization: development of clear plans, based on inspiring goals;
2. Reality testing: fair and unbiased;
3. Self-regard: aware of personal strengths and weaknesses, self-confident;
4. Emotional self-awareness: mindful and aware that their emotions have an impact on others and their performance;
5. Social responsibility: entrepreneurs but also team players able to influence, structure, and guide the team/corporate’s culture and rules;
6. Independence: decisive, and conscious about making decisions that fit the corporate’s purpose.

Lastly, EI supports entrepreneurs’ development and the attitude toward a more mindful leading process characterized by loyal commitment, alignment with people and community purpose, open-mind, integrity toward norms and ethics, willingness to overcome challenges, feedback acceptance, consciousness, and willingness to improve new skills, as well as, effective communications and active listening [1].

Emotional intelligence to transform into exponential entrepreneurs, group leaders, and teammates

“Emotionally intelligent leaders know when to display emotions and when to delay emotions.”

The Fourth Industrial Revolution (Industry 4.0) introduced enormous changes in our daily life, from how we work to how we live. Particularly, the development of advanced digital technologies from the internet of things (IoT), robotics, machine learning, or artificial intelligence (AI) systems had the effect of modifying the way we interact with the world [9]. Besides, the increased global market competition, the requirement for more automated and customized processes to promptly match customers’ needs leads to higher demand for innovation, creativity, and different skills to respond to rapid changes. Thus, collaborators and employees are asked about not only technical abilities but also more flexibility, awareness, adaptability, design thinking; all skills related to EI development [10]. In this regard, Industry 4.0 changes the way to interact with individuals, and where technologies represent the bridge. Hence, differently from the Intelligent Quotient (IQ), EI skills are essential to support this worldwide and digital connection [11].

The importance of EI in Industry 4.0 is mostly related to an environment characterized by constant changes and unpredictability, where adaptation is the key to success. Indeed, with a flexible, open, and growth mindset challenges would be transformed into opportunities while promoting the sustainability and the growth of a corporate, or even an organization. Resilience is in fact, a factor that enables individuals to resist adversities and conflicts while recovering from them. Andrew et al. (2011) [12] demonstrated that EI precedes resilience and those employees that develop these two behaviors tend to better adapt to changes, positively respond, and thus determine the organization’s success.

Whether facing Industry 4.0 requires entrepreneurs and teammates to evolve new competencies such as technical, and methodological, also social, and personal abilities are extremely needed [13]. Precisely, social and personal qualities are associated with EI and relate to traits like tolerance to ambiguous situations, flexibility, and adaptability, motivation to learn, growth mindset, compliance, cooperation, networking, effective communication, as well as, stress management [11]. Representing Industry 4.0 and the digital transformation processes of accelerating changes, forecasting future requirements (e.g., needed skills) and outcomes will be essential. Thus, training, educating, and preparing future entrepreneurs and teammates toward developing proper EI skills is the key to embracing and overcoming 21st-century challenges to transform and disrupt the world exponentially.

How to think like an Emotionally Intelligent Exponential Entrepreneur (EI-ExE)

In this century of digital transformation and advanced technologies, whether you already are a successful entrepreneur, a willing team leader, or a dreamer aspired to achieve high executive positions, you might find insightful the upcoming book by Mynor Schult called “Exponential Entrepreneur - Growth 10x by leveraging convergent technologies and your mindset.” In the book, you will learn how to become an exponential entrepreneur by applying exponential attributes to grow your business 10x, easily!

“In a sense, we have two brains, two minds, and two different kinds of intelligence: rational and emotional.” (Daniel Goleman)

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