The Importance of Emotional Intelligence

For most of us, when we think of intelligence, we actually mean IQ. We are suspicious of anything that involves emotions as traditionally, the world of business requires sound intellect and a rational mind. However, research has proved the common wisdom that intellect and technical expertise only go so far as predicting your future success. We can all remember the academically brilliant kid at school who never got anywhere in life or the one that failed every subject but is now running a profitable business. Emotional Intelligence (EI) counts for a big chunk of your performance and it seems that the higher you go up the corporate ladder, the more it matters. Memorable managers and leaders are usually inspirational, motivational, trustworthy and approachable. On the other side are those who think that training 'soft' skills is a complete waste of time and that companies are better off spending money on technical courses. They are unlikely to make good bosses. Even if their bottom line is healthy, their staff probably are not.

Emotional intelligence is not about being emotional. It certainly is not about not using your IQ. Reuven Bar-On, an EI researcher, devised a model of EI which consists of:

• Intra-personal factors – self-regard, emotional self-awareness, assertiveness, independence and self-actualisation;
• Inter-personal factors – empathy, social responsibility, intra-personal relationship, adaptability scales, reality testing, flexibility, problem-solving;
• Stress management factors – stress tolerance, impulse control;
• General mood factors – optimism, happiness.

As the above list of competencies show, EI is about knowing how to manage inter- and intra-personal relationships successfully. In order to get on in the work place, you need to know your own strengths and weaknesses, your own true beliefs and then you need to know those of other people in order to get on with them and motivate them to produce the best work they possibly can. You need to know how they perceive you and they need to be able to trust you.

Of course, there is no point in being emotionally intelligent at work for its own sake. It might make you a nicer person but that has never been the main premise of any business. The bottom line is that emotionally intelligent people make more money. It is a success that can be quantified and expressed in financial terms. For example, experienced partners in a multi-national consulting firm were assessed on the EI competencies plus three others. Partners who scored above the median on nine or more of the 20 competencies delivered $1.2 million more profit than their counterparts – 139 per cent incremental gain. Similarly, insurance sales agents who were weak in EI competencies such as self-confidence, initiative and empathy sold policies with an average worth of $54,000. Those who were strong in at least five out of eight key EI competencies sold policies with a premium of $114,000.

EI in the new economy
Did bosses 50 years ago need the same set of skills in order to succeed? Probably not. These soft skills are indispensable in the new economy. Fifty years ago, it was relatively easy for a boss to ignore his workers’ feelings. The prevalent mode of interaction was command and control, work was no place for feelings and jobs were for life. We all know how little of that applies today. People move between jobs more frequently. Employees are getting choosy. The knowledge intensive economy means that losing a member of staff or hiring someone unsuitable equals losing expertise and, therefore, money.

Emotional intelligence can help you retain staff because a good company is measured not by the number of benefits the staff gets but by how fulfilled, motivated and valued they are. It can also be indispensable during the recruitment process. Many companies undertake psychometric testing and EI testing could be next. This is more likely to happen in professions such as accountancy and law, where the overall intellectual strength of the candidates is generally high. In other words, EI could be a source of competitive advantage, something that will differentiate you from the crowd. For example, when a large beverage firm started selecting on the basis of EI, only 6% of people left in two years, compared to the previous figure of 50%.

Another defining feature of the new economy is the breakdown of old hierarchies and the emergence of flattened structures and team-based work. Many have been rendered truly global and fragmented by various web-enabled tools. Because of this, it is even more important to build and maintain good staff relations – inter-personal skills are crucial. Research which concentrated on why young executives ‘crash’ showed that the problem was not their technical expertise but their inability to maintain successful relationships with others and work in a team. They also had difficulties in handling change.

It could be said that the only permanent thing in the new economy is constant change. Research has shown that emotionally intelligent people cope with it better. They are able to pinpoint exactly what they are feeling and they can appraise others’ emotions. This means that, even if the future is uncertain, they do not feel bewildered and powerless. They are, therefore, able to move faster and take others with them. Unsurprisingly, people with high EI make good leaders.

Emotional intelligence is a cornerstone of good management. It shows you how to manage by building trust, empathy and understanding in the foundations of your organisational culture.

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This article is contributed by CIMA (The Chartered Institute of Management Accountants), the leading professional accountancy body in the world that trains and qualifies accountants in business. It offers the internationally recognised CIMA Professional Qualification in Management Accounting. Currently, CIMA has 155,000 members and students throughout the world.

source : http://www.jobstreet.com.my/learning/hr4.htm

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