When you think of successful entrepreneurs, you probably imagine a specific combination of skills and personality characteristics: You picture someone highly educated in their field. They have a great idea, an outstanding work ethic, and legendary determination. You’d probably be correct in nearly all cases. But you’re missing a key ingredient, one that researchers say might be more important than all other talents and traits: Emotional intelligence.
A recent study by the Indiana University Kelley School of Business found that emotional intelligence, or the ability to understand, use, and manage one’s emotions to help deal with stress, can be even more integral to success than IQ.
Regan Stevenson, assistant professor of Entrepreneurship and Management, and the John and Donna Shoemaker Faculty Fellow in Entrepreneurship, explained that “Entrepreneurs benefit much more from emotional competencies than other competencies — such as IQ — due to high uncertainty and ambiguity that comes with the world of entrepreneurship and even more applicable in a crisis”.
It makes sense when you think about it. No matter how great an individual performs at math or puzzles (typical portions of IQ tests), and no matter how knowledgeable they are in their field, an inability to regulate one’s emotions will negatively impact every aspect of a business. As the going gets tough, the tough must get going, as the saying goes. Those who can’t manage stressful situations will face an uphill battle; entrepreneurship is never easy.
Also, since emotional intelligence is directly related to empathy, those who work to develop emotional intelligence will be better equipped to motivate and manage their teams. As the study authors noted, “Emotional Intelligence is linked to social skills such as accurately perceiving other’s needs, making good first impressions, and influencing others in interpersonal interactions. These skills are important for developing business networks, which can aid in signaling legitimacy and in acquiring resources. These skills can enhance creativity and opportunity recognition; aid decision making in emotionally turbulent situations and enable adaptive responses to unpredictable events.”
It’s not that cognitive intelligence isn’t important. Prior research has led to the (somewhat obvious) conclusion that high intelligence often equals better job performance across all careers. But as study author Boyle said, “While IQ is unquestionably the better predictor of job performance and career success across all jobs and careers, within the domain of entrepreneurship, emotional intelligence was the stronger predictor of success. Those with high emotional intelligence tended to be more successful as business leaders and enjoy success than in more typical jobs and careers.”
So, do entrepreneurs work harder at developing emotional intelligence? Or are people with greater emotional intelligence naturally drawn to entrepreneurship? That could make an interesting topic for future research in this field. For now, those considering a business start-up would be wise to work on polishing skills such as emotional resilience, empathy, communication, and management skills. Ultimately, every business depends on people, from employees to vendors to lenders to clients. Working successfully with them can make the difference between a business that goes bust or a business that booms.