1) Emotional intelligence (EQ) refers to one's ability to understand and manage emotions and social relationships. It has been shown that EQ is often more important than IQ for success, especially in business leadership. 2) Daniel Goleman's research identified five key components of EQ for leaders: self-awareness, self-regulation, motivation, empathy, and social skills. Leaders with strong EQ in these areas tend to outperform those with lower EQ. 3) Studies have found a direct correlation between the EQ of top corporate executives and the financial performance of their companies. High EQ leaders were able to build effective teams and motivate employees, leading to greater productivity and profits.

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Sami Nassif
Professor Kuznetsoff
ENGL 145-02
18 March 2016
Emotional Intelligence: The Secret to Business Success
Why do smart people do dumb things? According to psychology Ph.D. Peter Salovey,
poor emotional intelligence (EQ) is part of the reason (Salovey, Ameriks, and Wranik).
Traditionally, emotion and reason are viewed as opposites, with emotion in particular garnering a
reputation for being haphazard and chaotic. In recent years, however, this perspective has
gradually been replaced by the idea that emotions are actually adaptive and functional ways of
organizing behavior. Since its emergence in 1990, EQ has served as the missing link as to why
people with the highest IQs are outperformed by people with only average IQs 70% of the time
(Bradberry). While this anomaly contradicts the traditional sentiment that IQ is the sole source of
success, it helps to explain how even people with high intelligence quotients can be led to poor
judgement.
Over the past two decades, a great deal of attention has been dedicated to quantifying
what it means to be emotionally intelligent. Academics have attempted to ascribe previously
inexplicable behavioral patterns to varying levels of EQ, and awareness of its relevance in
assorted professions has risen. Evidence suggests that increased levels of emotional intelligence
lead to more effective corporate leadership, as well as greater success in advertising and financial
investment, ultimately proving that emotional intelligence and business are positively correlated.
This awareness helps companies increase productivity and profit, validating the rising trend of
EQ over IQ.

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Emotional intelligence is a relatively modern concept given the amount of time that has
been spent analyzing human behavior and interconnectedness. The term was coined in 1990 in a
research paper by psychologists John D. Mayer of the University of New Hampshire and Peter
Salovey of Yale University (Zeidner, Matthews, and Roberts ). According to Mayer, “emotional
intelligence is the ability to accurately perceive your own and others’ emotions; to understand the
signals that emotions send about relationships; and to manage your own and others’ emotions.” It
was Daniel Goleman, however, who brought the concept of emotional intelligence to prominence
in his 1996 book on that subject (Ovans).
In the 20 years that have passed since that time, other definitions of EQ have emerged.
Most of them coincide with one another, collectively establishing EQ as the ability to perceive,
understand, interpret, regulate, and use emotions to assist thought and promote emotional and
intellectual growth (Coget and Haag). Alternatively, the idea may be defined as “an array of
noncognitive capabilities, competencies, and skills that influence one's ability to succeed in
coping with environmental demands and pressures” (Zeidner, Matthews, and Roberts). EQ does
not formally include many of the popularly ascribed traits with which it is associated, such as
initiative, optimism, and self-confidence, though these attributes are frequently present among
individuals with high levels of emotional intelligence (Ovans). This association will be
expounded in the subsequent discussion of EQ and leadership.
Two prominent EQ models emerge out of this mélange of definitions that are worthy of
note: the ability model and the mixed model. According to the ability model, “EQ is viewed as
the well-defined and conceptually related set of cognitive abilities for the processing of
emotional information and regulating emotion adaptively” (Ovans). This cognitive approach
focuses on intelligence and performance. By contrast, the fixed model views EQ as the mix of

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“competencies and general dispositions for adaptive personal functioning and coping with
environmental demands. The construct encompasses multiple aspects of emotional and personal
knowledge and personal functioning that are rather loosely related to emotion, including
motivation, personality traits, temperament, character, and social skills” (Ovans). This model is
rooted in personality and psychological adjustment, focusing on behavior rather than processes.
The remainder of this essay will adhere to the second of these two models, as it more closely
aligns with Daniel Goleman’s work and thus, much of the research in EQ that has been
conducted.
Chief among the disciplines to which emotional intelligence applies is business. To that
end, increased levels of EQ lead to more effective leadership, as well as greater success in
marketing and finance. This in turn contributes to the emerging theory that empathy and
interconnectedness in business are of incredible value. According to Goleman, “the most
effective leaders are 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 mainly as ‘threshold capabilities’” (Goleman, “What Makes a Leader”). This belief
that IQ is merely an entry level job requirement for executive positions contradicts the existing
value placed on being book smart. It even goes so far as to imply that a person will not be a great
leader without EQ, even if he or she has incredible training, an incisive mind, and a limitless
inventory of intelligent ideas. Goleman’s assertions come from a study he conducted that
examines what traits are encompassed by EQ as they pertain to leadership. The data was
compiled through reports from senior company executives on the behavior and success of their
workers. Results of the study break down emotional intelligence into five categories: self-
awareness, self-regulation, motivation, empathy, and social skills.

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The first three components of emotional intelligence in leadership have to do with self-
management. Self-awareness pertains to a deep understanding of one’s own strengths,
weaknesses, needs, drives, and emotions. Leaders with high levels of self-awareness typically
exhibit high levels of confidence and view themselves and their abilities realistically. They are
aware of how their feelings affect both themselves and others, as well as their performance at
work. Self-regulation has to do with the ability to regulate and anticipate disruptive impulses and
moods. Moreover, self-regulating leaders think before they act, suspending judgement of others.
Hallmarks of the self-aware leader include integrity, comfort with ambiguity, and openness to
change. Highly motivated leaders possess an intrinsic passion for work and thus pursue goals
with persistence and energy. Even in the face of failure, they are optimistic (Goleman, “What
Makes a Leader”; Akers). If leaders develop competency in each of these elements of self-
improvement, they will have the mindset required to be emotionally intelligent leaders.
The last two components of emotionally intelligent leaders, empathy and social skills,
concern people’s relationships with others. Highly empathetic leaders typically exhibit three
traits: “cognitive empathy—the ability to understand another person’s perspective; emotional
empathy—the ability to feel what someone else feels; [and] empathic concern—the ability to
sense what another person needs from you” (Goleman, “The Focused Leader”). Empathetic
people typically possess levels of cross-cultural sensitivity and can easily build new clients.
Social skills refer to people’s abilities to manage relationships and build networks by identifying
common ground. These people are effective in leading change and excel at building teams
(Goleman, “What Makes a Leader”; Akers). This last trait of leaders with high emotional
intelligence is in many ways a product of the first four capabilities.

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Goleman’s study is helpful in both defining EQ characteristics and showing how EQ is
beneficial in leadership. In using its results to compare star performers with average ones in
leadership positions, he makes it clear that nearly 90% of the difference in achievement relates to
these emotional intelligence factors (Goleman, “What Makes a Leader”). These findings
coincide with those of David McClelland, a renowned researcher in human and organizational
behavior. According to a study he conducted in 1996, “when senior managers had a critical mass
of emotional intelligence capabilities, their divisions outperformed yearly earnings goals by
20%. Meanwhile, division leaders without that critical mass underperformed by almost the same
amount” (Goleman, “What Makes a Leader”). The lesson that can be gleaned from Goleman and
McClelland’s work is that EQ among company leaders corresponds with company success.
The connection between EQ and leadership is even evident on a state level. Asked to
comment on important leadership traits, French advertising guru Jacques Séguéla made reference
to former French president Mitterrand, saying “I knew Francois Mitterrand well and he had, first
and foremost EQ, even though he hid it because you don’t have to reveal your emotions to be
emotionally intelligent” (Coget and Haag). Mitterrand’s high EQ undoubtedly contributed to his
ability to transform himself from being the most unpopular French president of the Fifth
Republic into the man people referred to as Tonton—French slang for uncle. Indeed, upon his
reelection for a second seven year term, Mitterrand was regarded as one of France’s most well-
liked and respected leaders (Francois Mitterrand). Although this example does not pertain
directly to business, successful businesspeople and successful politicians generally share many of
the same attributes, making this an excellent example of how EQ in leaders enhances the
admiration and respect of others.

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Mention of Séguéla segues into the strong correlation between marketing success and
high levels of EQ. Séguéla, the Chief Communication Officer of Havas, the world’s sixth largest
advertising and communications company, leads 800 designers worldwide and has garnered
enormous respect among advertising communities. According to him, whereas “IQ is being able
to think about things faster than others, thus putting yourself above others...EQ is putting
yourself in direct contact with others; touching each other’s fingers” (Coget and Haag). This
direct contact is invaluable in advertising, a world where success is achieved by playing off
people’s emotions. The ability to create an advertisement to which others can relate is incredibly
important. By allowing leaders to legitimize emotion in the workplace, helping them to
empathize with employees, and aiding them in seducing their clients to buy products, emotional
intelligence has an incredible impact on advertising success.
In a similar manner, evidence shows that EQ is of value in the world of investing.
Perhaps because investment is perceived as a more objective, numbers-based process however,
this interplay is less publicly known than that of EQ and marketing. The general consensus
among publications relating EQ to investment success is that development of emotional
intelligence is perhaps the best way investors can adapt to changing markets. This hypothesis
was tested by John Ameriks of the Vanguard Group, Tanja Wranik of University of Geneva, and
Peter Salovey, who conducted a study using data from an online survey of Vanguard Group
investors and Vanguard account balance records. Their results showed that investors with higher
neurotic tendencies were less likely to be overexposed to equities, whereas among investors
scoring above average in agreeableness there was significant correlation with low-equity and
greater financial success (Salovey, Ameriks, and Wranik). Such knowledge is useful because it

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allows investment companies to integrate investor personality information into their portfolio
models and thus enhance the likelihood of financial goal attainment.
Various wealth experts agree with these findings. According to Hugh Massie, a wealth
mentor who has published several works on investment, emotionally intelligent investors achieve
success because they “stick to their investment strategy in the long term” rather than allowing
fear or panic to take control in tense situations. Massie cautions that emotionally unintelligent
investors often go after the “quick kill” in hopes of finding “that one deal they’re going to be
able to talk about for years to come.” This, he says, can lead to detrimental effects (Massie). By
thinking rationally and maintaining commitment to strategy, two traits exhibited by individuals
with high levels of EQ, investors can achieve the greatest amounts of success.
Now that the benefits for EQ in business related areas has been established, it seems
natural to wonder how EQ is developed and if there exists any capacity for emotional
intelligence improvement. After all, this X-factor’s ability to seemingly boost leadership talent
and career success makes it an incredible asset to any individual. Because EQ is primarily shaped
by early childhood experiences and even genetics, it is relatively stable over time. In spite of this,
studies show that “a well-designed coaching intervention can easily achieve improvements of
25%,” indicating that long term changes in EQ are possible to attain with dedication. According
to Tomas Chamorro-Premuzicn, professor of Business Psychology at University College
London, different elements of EQ have different capacities for change. While interpersonal skills
proves to be the most coachable, increased levels of empathy are much harder to attain
(Chamorro-Premuzicn).
Improvement of EQ involves the increase in connections between the emotional and
rational brains. As a result of senses traveling through the limbic system before reaching the

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forebrain, emotional reactions are elicited before the rational brain is able to engage. As new
emotional intelligence skills are developed and practiced, axons increase in quantity and become
more myelinated, increasing the speed at which neurons travel and helping the brain to build
habits. Furthermore, as these new behavior pathways are enforced, neural connections in support
of old behaviors are eliminated as they are no longer used (Bradberry; Freberg). By
understanding the neuroplasticity of the body, individuals can actively engage in behaviors that
will facilitate increases in emotional intelligence.
While business may seem like a world where rational decision-making trumps all, an
examination of leadership, marketing, and financial trends makes it clear that emotional
intelligence plays a critical role in business success, increasing productivity and profits. Indeed,
as the corroborative contrasts throughout this paper make clear, the increasing value for EQ over
IQ is apparent. It is important to note that certain skeptics, such as Wharton professor Adam
Grant, do deny the attribution of success to EQ across different disciplines (Grant). Such views,
however, are inconsistent with Goleman’s findings and the overwhelming consensus among
authorities: that EQ impacts achievement to an incredible extent.
The rising awareness of EQ’s value is already making itself evident in reformed
employee training methods and educational institution vision statements (Coget). It is likely to
soon result in alterations in focus among higher education systems, with greater emphasis being
placed on EQ in addition to IQ. Perhaps this rising awareness of EQ will help to counteract the
present trend of automation, where technology is replacing human interaction. After all,
according to Seguela, “we live in a world that is increasingly passionate, increasingly human,
increasingly able to listen” (Coget and Haag).

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Coget, Jean-Francois, And Christophe Haag. "Leading Creative People: Lessons From
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"Francois Mitterrand: Consummate French Politician." UPI. N.p., n.d. Web. 11 Mar. 2016.
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(2012): n. pag. 2012. Web. 9 Mar. 2016.

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