David Meade explores the future of leadership development

June 24, 2020

David Meade on why top firms are turning to EQ to balance and boost their business.

Not just a key driver of engagement and loyalty, a manager’s ability to demonstrate and practice the principles of leading with what researchers have dubbed EQ (as opposed to IQ) have now been linked with turnover, profitability, and performance.

So how do we understand where our organisational EQ is today, and how do we develop our leaders to capitalise on its human and financial rewards?

No longer regarded as the fluffy stuff of the ‘smoothie-toting’ tech giants, evidence shows that today’s number one predictor of leadership success is emotional intelligence.

Ineffective leadership is rife and the evidence is all around us, but building and nurturing emotional intelligence is a useful pill for many management ill, and given it’s clear impact on the bottom line should be at the top of every leaders development agenda.

So, what is emotional intelligence? Put simply, it the ability to understand and manage one’s emotions and those around you. Those who have high levels of emotional intelligence understand their own feelings and emotions, and how they affect others.

It is widely agreed that there are five key elements to emotional intelligence: self-awareness, self-regulation, motivation, empathy and social skills, and it is current management discourse that says that leaders who exhibit the lion’s share of those behaviours have the ability to drive performance and engagement.


Emotional intelligence has been criticised as lacking evidence to substantiate the claims of those who say that emotionally intelligent behaviours are effective and improve performance. As the evidence grows at pace, however, the criticism is abating. More and more research is being published that links emotional intelligence to increased performance, retention, and even profitability.

A Carnegie Institute of Technology’s study found that 85% of a company’s financial success was down to what they called skills in ‘human engineering’ or emotionally intelligent behaviours, especially in their leaders. Technical ability, which of course is important, surprisingly only accounted for 15% of the success.

These findings have been replicated in a number of other recent studies. A highly principled and emotionally intelligent leader has been found to be a contributing factor to organisational success, and chief executives whose employees gave them high marks for character, had an average return on assets of 9.35% over a two-year period. Nearly five times as much as those they gave low character ratings too.

Although most of the research to date has focused on executive level leadership, there have been studies that show the impact at all levels of an organisation. In one study of jobs of medium complexity, such as a sales clerk or mechanic, top performers were 12 times more productive than their co-workers. And for those top performers of more complex jobs, such as an insurance salesperson or account manager, they were 127 times more productive. This increase in productivity was credited to technical skills, cognitive ability and crucially, emotional intelligence.

And those who hold senior level leadership positions who have high levels of emotional intelligence make over 80% of a difference to an organisations bottom line. But it doesn’t stop there. A study with sales people in a number of industries found that companies who selected staff on the basis of emotional intelligence sold between $50,000 to $90,000 more than other sales people, or as Dan Goleman quantified it ‘every 1% improvement in the service climate, there’s a 2% increase in revenue.’


One study tested EI alongside 33 other important workplace skills and found that it was the strongest predictor of performance. A further study found that 90% of the top performers were also high in EI. This doesn’t mean that you can’t be a top performer without EI, but this study suggests its less likely. Similarly impressive evidence shows those with high levels of EI can make $29,000 more per year than those with a low degree of EI, and senior leaders with high EI delivered $1.2m more profit for their organisation.

Executive derailment has also been linked to deficiencies in EQ. That’s because the three big reasons for executive failure are: a difficulty to handle change, and inability to work well within a team and poor interpersonal skills. This same study found that EI was more important to executive success than either IQ or relevant experience.


A leaders’ emotional intelligence has been shown to be positively correlated to employee job satisfaction. In one study when employees were selected based on emotional intelligence, such as empathy, self-awareness and initiative, only 6% of those they hired left within two years. This was a 42% increase in retention from when they used the standard method of recruitment and selection. What was even more interesting is that those who were selected based on emotional intelligence were more likely to perform in the top third of the company and outperformed their targets by almost 20%.


As a leader, here are some ways that you can develop your emotional intelligence to drive performance and productivity.

Self-awareness: Journal writing is a good way to improve your self-awareness. Research has demonstrated that when you put your feelings into words that it not only improves your self-awareness but can have a therapeutic effect on your brain.

Self-regulation: Hold yourself accountable. Don’t blame others when things go wrong. Stop and think carefully about what happened and if it’s your fault, accept it and move on.

Motivation: A motivated leader is usually an optimistic one, even when the chips are down. Adopting a growth mindset and being hopeful will put you in good stead to achieve the high standards and goals that you set yourself.

Empathy: Become the expert of looking at body language and learn to listen, and I mean really listen. Listening carefully to what people are saying and what understand what their body language is telling you will help you to understand how they really are feeling.

Social skills: Learn how to praise others. The thing is with praise, its free, and people like those who praise them. So use it when it’s earned.

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