EQ vs IQ: Importance of Emotional Intelligence in Leadership

Why a diversity of emotional intelligence and balance across leadership teams is important for portfolio companies to achieve their value creation plan.

By: Leadership Dynamics team


4 mins

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EQ vs IQ: The Importance of Emotional Intelligence in Leadership

Having a degree of emotional intelligence is important in any walk of life. It gives us the ability to connect emotionally with others, form and maintain relationships, and develop a level of self-awareness.

Yet the requirements of emotional intelligence in the workplace, and especially in leadership teams, are often misunderstood.

The best outcomes derive from a diversity of skills, competencies, personality types and behaviours; and a diversity of emotional intelligence is critical to the functioning of a high performing leadership team.

This article digs into the nuance of emotional intelligence in the workplace. Why it's important, but also why it's more important to have diversity and balance.

To learn more about what emotional intelligence is and what it means in the context of the workplace, have a read of our article: The Guide to Emotional Intelligence for Leadership Teams


  • EQ vs IQ

  • Why emotional intelligence is important

  • Why diversity and balance is more important

  • How to achieve the right balance of emotional intelligence

  • How emotional intelligence fits into your strategy

EQ vs IQ

IQ, or intelligence quotient measures our ability to work out problems with our reasoning. It’s not a perfect measure, because human intelligence is too complex to distil into one universal score. But it’s the best we have and determining how high someone’s IQ is works as a shorthand for understanding their cognitive abilities. 

IQ is important in the workplace in so far as it can safely judge how well someone will understand complex concepts, and creatively solve problems. In other words, it’s the bare minimum for being an effective leader.

EQ, or emotional quotient, reflects a person's level of emotional intelligence. It was begun by researchers John Mayer and Peter Salovey in the 90s, and popularised by psychologist Daniel Goleman.

EQ is important for interpersonal relationship management and social awareness. Somebody with a high EQ is what we call a "people person".

In terms of work, IQ gets you the job; EQ helps you keep it. So, rather than thinking about IQ vs EQ, it’s more important to consider IQ and EQ.

Why emotional intelligence is important

First, let’s answer the question: why is leadership important?

Running a successful organisation goes beyond effective administration. Leaders establish the vision of the company and have the power to bring people along with them to achieve it. They drive change, resolve conflicts and inspire a workforce.

Without good leadership, a company lacks a clear and defined direction, it stops innovating and the workforce simply goes through the motions to earn their paycheck.

All of those qualities of leadership we just mentioned would be nothing without relationship management skills. Emotional intelligence is the ability to recognise and control one’s own emotions, and understand the emotions of others.

At the very foundation of leadership, it’s critical that leaders are emotionally intelligent enough to know how to manage people, not just perform tasks.

Why diversity and balance is more important

Notice we said emotionally intelligent enough.

We say this because emotional intelligence in a workplace isn’t a more-is-better situation. It’s about having the right balance in terms of levels of emotional intelligence. In fact, very high emotional intelligence can sometimes even be a disadvantage. 

The way you get to balance is through diversity; not just cognitive diversity, but also educational, socio-economic, and of age, gender and experience.

Harmony does not always equal productivity

Through our work, we have seen that too much emotional intelligence across the board – while it makes for a harmonious workplace – can also lead to a kind of paralysis in decision-making. People with high EQ are very good at reading non-verbal cues and will be quick to self censor if they feel like their views will not be well received, holding back what they truly feel about a business decision. 

This is where someone who is less aware of others’ subtle social cues and is more direct can add value. 

In fact, when you have a team of people all very similar to each other, whether they are emotionally intelligent or not, they can veer dangerously toward group-think. Group-think leads to poor outcomes because the lack of opposing voices dampens creativity and encourages complacency.

As Harvard Business School says: "People with high EQ tend to be great at building relations and working with others but may lack the necessary levels of nonconformity and unconventionality to challenge the status quo."

While high EQ workplaces lead to higher job satisfaction, it is not always conducive to achieving a strict value creation plan if there is no diversity.

High EQ leaders are vulnerable to destructive behaviours

A key behaviour of emotionally intelligent people is called “self-monitoring”, which is the ability to adapt one's behaviour to an environment. It makes them excellent networkers and likeable people.

However, if everyone is constantly self-monitoring, then not only is no one taking the lead, but someone with high instances of People who tend to adapt to others are also susceptible to mimicking and even enabling the negative behaviours of people who lack emotional intelligence.

For high performance organisations, the right question to ask is: “why is having the right balance of emotional intelligence in a leadership team important, and how do we achieve it?”

This is especially salient for PE investors looking to keep organisations aligned to a value creation plan.

How to achieve the right balance of emotional intelligence

We know that we need IQ and EQ (or rational intelligence and emotional intelligence) to perform but how do we identify the optimal mix in a leadership team?

In private-equity backed portfolio companies, investors and chairs don’t have the luxury of waiting to develop the right balance of skills, competencies and behaviours. Having the right leadership team in place at all times is critical to the success of the value creation plan. 

Making sure you have the right people in the first place is key, followed by regular monitoring of the balance of emotional intelligence across the team throughout the investment journey. 

1. Use data and analytics

People analytics tools use data to build candidate profiles, making it quicker and simpler to identify external candidates as well as high-potential employees within an organisation.

However, two things are key to the success of these tools:

  1. The quality and relevance of the data – What kind of people are in the dataset?

  2. The focus of the assessments – What are you testing for?

Most psychometric assessments models, such as Myers Briggs, focus on testing for personality.

In our experience, personality is not an indicator of how well a candidate will perform in their role. At Leadership Dynamics, we focus on behaviours first, then skills and competencies. Understanding a person's default behaviours will tell you how they will react in certain situations, how they will interact with and impact other people on their team.

Our behavioural model, PACE (Pragmatism, Agility, Curiosity and Execution), denotes the ideal set of behaviours most conducive to a successful team.

Using data to find the right behaviours is critical to diversity and inclusion in a leadership team. You will only discover diverse viewpoints by looking outside somebody's background, personality and experience.

2. Focus on team dynamic

Don't stop at the individual, build a behavioural profile of an entire team so you can see the gaps. Where does a COO complement the CEO? Which role requires a high EQ, and will the strong behaviours of a founder positively or negatively impact an emotionally intelligent team member?

Identify the ideal behaviours of the C-suite that complement each other, with just the right amount of emotional intelligence to optimise productivity and create a positive culture.

In a high-performance business, hiring solely based on a CV and an interview are not enough. CVs only show how a candidate wishes to be perceived, and interviews come with a lot of assumptions made through the worldview of the interviewer.

We have found that somebody's time served within an industry is not a strong indicator that they will succeed in a role within that same industry. A track record of success within that industry is a good start, but it has to fit well with the rest of the team. As well as functional experience, there needs to be a balance between situational and domain experience.

  • Domain Experience: Market sector area experience, their experience of companies and their market and customer focus. 

  • Situational: How that business has created value whether inorganically e.g. M&A trade exits or organically, internationalisation, digital transformation, operational effectiveness etc.

  • Functional: The individual’s own role in those companies and markets, effectively their work history and their skills or function.

Looking at the balance of experience across a team, especially their situational experience, will help predict the success of a value creation plan. If there is one leader with considerably higher experience than the others, it could create a dependency upon that individual. And if everyone has the same level of experience, they won’t have anyone to learn from.

Here is an example of an individual positioning chart that we use:

In this example, the company sits high in domain experience.

3. Remove the emotion

This might sound glib, but emotion can get in the way of building a high performing team. Many founding teams and their investors get attached to each other, and it can cloud judgement when it comes to doing what is best for the organisation.

Using data-driven assessments is an objective way of identifying the optimal leadership team dynamic, and cuts through any emotive reasoning and bias.

How emotional intelligence fits with your business strategy

For businesses that must adhere to a strict value creation plan, making sure you have emotionally intelligent people in your leadership team is important to the smooth running of a company.

But too much or too little emotional intelligence leads to negative outcomes. Maximising is not the answer; optimising for performance is.

With our behavioural model, PACE, you can visualise the behaviours you need and then map them to your current team and those of your peers, to find the gaps.

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