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The ROI of Emotional Intelligence in Management

Emotional intelligence (EI) is defined as “the capacity to be aware of, control, and express one’s emotions and to handle interpersonal relationships judiciously and empathetically.” The three skills that, broadly speaking, make up EI are: 

  1. Emotional awareness, including the ability to identify and name your own emotions
  2. The ability to harness your emotions and use them constructively in critical thinking and problem solving
  3. Emotion management, including regulating your own emotions and expressing them appropriately and effectively and anticipating and influencing others’ emotional responses.

 Less formally, you can describe EI as “being smart about feelings.

What Soft Skills Are Signs of Emotional Intelligence?

Graphic Showing Helping to AidIn The Ultimate Guide of Soft Skills for Managers, we’re making the business case for soft skills. We’re equipping managers with tools and information for developing their soft skills. EI overlaps with soft skills. They’re interdependent. EI is the measurable outcome of well-developed soft skills. At the same time, honing soft skills builds strong emotional intelligence. Outwardly, these soft skills will show up and are good indicators of EI. 

  1. Paying attention to emotions and how they influence behaviors.
  2. Critical thinking to maintain objectivity vs. letting emotional responses preside.
  3. Giving and receiving constructive feedback and praise with poise.
  4. Listening to genuinely understand.
  5. Empathizing with others’ feelings even when those feelings are disruptive or uncomfortable.
  6. Focusing on how to move past conflict and strengthen relationships.
  7. Being authentic, transparent, and vulnerable.
  8. Admitting when you’re wrong or have caused others to feel badly.
  9. Living up to your promises and commitments.
  10. Being steady and in control of your emotions.

 If you’re working on soft skills, you’ll build EI. It’s like working on technical skills builds your intelligence about the field you’re in.

Emotional Intelligence in Management. Soft Skills. Too Much Fluff?

 Effective management is highly correlated with the ability to understand and manage moods and emotions in self and others. One researcher has studied how the ability to manage emotions contributes to five key areas of management: 

  1. Developing collective goals and objectives
  2. Instilling in others an appreciation of the importance of work activities
  3. Generating and maintaining enthusiasm, confidence, cooperation, and trust
  4. Encouraging flexibility in decision-making and change
  5. Maintaining a meaningful identify for an organization

 Each of these five outcomes contributes to morale, engagement, and a sense of belonging. For some, though, this may still seem too “soft.” That’s why a great deal of research has also been done to understand if and how EI improves management performance and business results. There is a strong case that bears out the ROI of improving your emotional intelligence.

One study, conducted with restaurant managers and reported in the International Journal of Contemporary Hospitality Management, proved that managerial emotional intelligence is positively related to: 

  • Employee satisfaction,
  • Customer satisfaction, and
  • Profit performance


Daniel Goleman, one of the foremost researchers in this field, reports in a white paper that: 

  • Over 80% of the competencies that differentiate top performers from others are in the domain of EI.
  • Companies who have executives with higher levels of EI are more likely to be highly profitable.
  • EI training reduces workplace accidents and significantly increases productivity.


The same paper draws this conclusion:

 “In hard times, the soft stuff goes away. But emotional intelligence, it turns out, isn’t soft… It’s a basic tool that, deployed with finesse, is the key to professional success.”

 Forbes recapped the findings of a TalentSmart study that underscores the importance of EI. According to that study, EI plays the biggest role in performance when compared to 33 other workplace skills. What’s more, EI influences 58% of success across every type of job. Chief among the EI attributes required for business success was self-awareness.

Self-Awareness Could Be Your New Superpower

The starting point of EI is self-awareness. Without self-awareness, you’ll be inept at managing your emotions and understanding others’ feelings.

Self-awareness starts with understanding your feelings and getting comfortable with them. When you’re feeling out of sorts, identify what you’re feeling. Are you angry? Scared? Disappointed? Embarrassed? If you don’t differentiate these emotions, you may respond inappropriately to situations and make things worse.

Once you identify the emotion, give yourself permission to feel it. Your feelings are valid. Managing your emotions does not mean you need to deny or suppress them.

Next, reflect on the emotion you’re experiencing. What triggered it? What magnified it (e.g. something in the past that was similar and uncomfortable)? What do you need to move through it and not be bogged down by it?

Check your outward expression of emotions. Are they proportionate to the situation? Do you release the emotion before considering the impact that reaction might have on others? Are you able to respond in effective ways or only in emotional ways? In moments of high emotion, are you able to pause and think through your options before reacting?

Be sure, too, to notice the impact of your emotions on others. How do your words, actions, and expressions influence your workplace relationships? How do people respond to you? Are they tentative and fearful, tiptoeing around the edges so they don’t trigger an outburst? Are they able to be candid and open with you? Are they braced and defensive or are they open?

Beyond emotional responses, self-awareness also includes the ability to honestly appraise your abilities. Knowing your strengths and acknowledging your weaknesses makes you more trustworthy. You won’t over-commit to work outside your wheelhouse. You will be able to contribute by doing work that is strengths-based and solid.

Your self-awareness will lead to social awareness. You’ll become more attuned to others and better able to identify and understand the emotions they’re experiencing, even those that are unspoken. It doesn’t work in reverse, though. You’ll have to start with the uncomfortable work of building strong self-awareness.

Here’s how self-awareness can become your newfound superpower. Research by Ginka Toegel and Jean-Louis Barsoux, as reported by MIT Sloan Management Review, is a good example of its importance: “A survey of 75 members of the Stanford Graduate School of Business Advisory Council rated self-awareness as the most important capability for leaders to develop. Executives need to know where their natural inclinations lie in order to boost them or compensate for them. Self-awareness is about identifying personal idiosyncrasies — the characteristics that executives take to be the norm but actually represent the exception.”

If you want to develop stronger self-awareness, consider starting with a 360-degree assessment. Other people will give you input about what they see you doing and how they perceive you. 360s are very effective in spotlighting any blind spots you may have. A Korn Ferry Institute study with 6,977 individuals in 486 companies reports that 79% of executives have at least one blind spot. This study also found that “poorly performing companies’ employees had 20% more blind spots that those working at financially strong companies.”

What you’re aiming for is a competitive advantage. Self-awareness is directly linked to business results, but the majority of executives are lacking awareness of their own blind spots. You can differentiate yourself and get an advantage by knowing yourself better than the average executive. With these insights, you’ll have a good starting point. You may also wish to work with a certified coach who can help you process these findings and discover high-value learnings from them.

How EI Helps Improve Team Performance

In addition to the person benefits you’ll enjoy by developing your emotional intelligence, there can be significant advantages for your team, too.

Ideally, you’d model EI for them and then help them to develop EI, too. Here are some indicators that EI may be lacking on your team. 

  • Personality clashes interfere with collaboration.
  • Cliques, siloes, or us/them thinking divides the team.
  • People aren’t speaking up at meetings.
  • Problem-solving and decision-making take a long time.
  • Communication is lacking or results in conflict and stress.


One study reported in the Journal of Human Performance explains how EI impacts team problem solving and conflict resolution. The study concluded that EI is linked to team performance, with the strongest teams comprised of members who have stronger EI indicators.

In another study, Hillary Elfenbein linked emotional intelligence with team performance at work. She found that “teams with greater average emotional intelligence have higher team functioning than  groups with lower emotional intelligence.” Moreover, in a team, “the ability to understand one another’s emotional expressions explained 40% of the variance in team performance.”

EI enables team members to understand each other, trust each other, and bond together as a cohesive group. As more work shifts to teams and requires collaboration, this becomes increasingly important.

In sum, your team will be more effective, you’ll have a competitive advantage, and your business will see ROI when EI is developed. Those “soft” skills are worth the investment and make a big difference.

If you want to get in touch with your emotional intelligence, contact us today to learn more about executive business coaching.

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