Emotional Intelligence: The Business Skill That Actually Moves the Needle

You can't lead what you can't feel. That's blunt, and yes, before you flinch at the emotional language, let me make my case, in boardrooms from Sydney to Perth, leaders who believe that numbers alone make a leader are increasingly out of touch. Emotional intelligence (EI) is not one of those woolly management trends. It is a useful tool kit for driving people, decisions and culture through complexity.

And, yes, I hear some of you saying that EI is overblown. I disagree, strongly. It is significant but it's interesting because organisations treat culture like a soft thing to do, when it should be business as usual. What I would like to do here is remove emotional intelligence from the self help aisle and really talk about it as a managerial skill that has been brutally hard won. Not because feelings are everything, they're not, but because what you do with emotion and how you manage it has a real, material impact on outcomes. In fact, TalentSmart research has shown that emotional intelligence contributes to 58% of a person's job performance. That's hardly trivial.

Why on earth is EI important now

Organisations are more and more networked and decision cycles are shrinking. Hybrid work, global teams and rapid change make mistakes of misreading people even more expensive. In other words: technical skill does the job well, people skill keeps the job solvent. If your best technical person can't herd your team cats to completion, that's an EI problem, not a spreadsheet one.

Another reason is wellbeing. One in five Australians will suffer from mental illness at some point each year. That statistic, and the lived reality to which it points, isn't just a human issue; it's also a business one. Unacknowledged stress piggybacking on teams diminishes productivity, creativity and retention. Leaders who can sense strain, intervene in constructive and empathetic ways and build psychological safety will achieve better outcomes, and retain their people.

Far too often Organisations regard emotional intelligence training as a "nice to have" that they never quite seem to get around to. I see global corporations running high budget one size fits all technical training and then purchasing a one off half day on Emotional intelligence (EI, or EQ) with the expectation that somehow everyone will emerge transformed. That's a mismatch. EI is a muscle that you can build, it takes practice, feedback and accountability.

What emotional intelligence is not

Let's clarify one thing: Emotional intelligence isn't some woo woo girl power thing. Most break it into its familiar parts: self awareness, self regulation, motivation, empathy and social skills. One way, which is of great utility in business situations, is to view them according to the four branch model: perceive emotion; use emotion to facilitate thinking; understand emotions; manage emotions.

Self awareness is the baseline. You keep making the same mistakes if you don't know how you respond under pressure. Self regulation is the ability to respond, instead of reacting, and not default to venting or avoidance. Empathy is being able to put yourself in someone else's shoes long enough to consider a viewpoint you wouldn't otherwise see. Social skills are the tools we have for focusing on cooperation and success with others: listening, feedback, influencing and conflict management.

Do not confuse EI with being soft. A leader who's afraid to make difficult decisions out of fear of conflict isn't emotionally intelligent. On the other hand, a leader who can have a candid conversation with someone and maintain that respect and dignity, when you are angry or in some work difficulty is checking off their EI list.

How EI changes leadership behaviour

So I'm going to make a few statements here that will annoy many in the old brigade:

• Technical expertise does not necessarily equate to leadership. Not all the best engineers are good managers. They could be great at their craft and terrible at moving people. That's all fine, until they get promoted into positions where people leadership is required.
• Empathy is not weakness; it's leverage. You can be empathetic and have backbone. Indeed, decisions are likely to stick longer and be more effective when you lead with Empathy instead of just Authority because people feel heard.
• Performance frameworks without relationship norms are brittle. You can put in KPIs until the cows come home, but if they don't trust it, people will game it. Leaders with high EI are adept in holding others accountable by inspiring them rather than punishing them.

They're better at reading team dynamics and anticipating where friction will arise. They are more resilient, a stigma releasing characteristic that they can use to save their own lives; it teaches them how to reappraise stress situations and keep perspective, which is contagious. You can think of emotional intelligence as a growth factor for your leadership impact.

Teams and EI: the hard business case

Have higher EI teams communicate more effectively, find solutions together, effectively manage conflict. Think about a typical work day: two senior members of staff publicly disagree during a client call. An E.I. challenged leader could either barge in and cut the discussion short, or leave the issue alone to fester. A leader with high EI would acknowledge the raw vs. herself, inquire about the deeper issues out of curiosity and share a brokered plan for how to re establish alignment on follow up. Different approaches, different outcomes.

There is a tangible cost to disregarding EI. Poor emotional literacy in leadership teams are downstream ills such as high turnover, low discretionary effort and innovation being stifled. On the other hand, organizations that make efforts to cultivate EI have higher engagement scores and better retention. These things are mixed; small relational fixes yield outsize returns.

Practical ways to nurture the development of emotional intelligence (not fluff)

If you are serious about developing EI in your Organisation, and you should be, here are some practical, evidence based strategies that really work.

1. Begin with self awareness exercises that don't suck. Have leaders maintain a short emotion journal for two weeks: the situations that create strong emotions in them, and what thought process accompanies those emotions, and the actions which follow. Simple, private, disciplined. Reflection plus data. It's low cost and eye opening.

2. Get real feedback, and not just anonymous surveys. Well structured 360 feedback, when combined with coaching, can be effective when it's honest and developmental. But don't make it punitive. Present it as data about growth and make sure leaders are supported by a coach who will help them turn feedback into active experiments.

3. Teach concrete emotional regulation strategies. Mindfulness and breathing exercises are good for the short term, but true effectiveness comes through weaving them into life habits. It's more effective to teach a leader an exercise like the pre meeting breathing practice that helps create clarity and calm than it is to talk about stress in the abstract.

4. Develop empathy through role playing and trying a new perspective. Get people to argue from another stakeholder's perspective in a risk free space. This isn't theatrical indulgence, it's rehearsal. If you practice seeing through another's lenses, it helps you perform in real world situations.

5. Incorporate EI into performance discussions and manager metrics. Don't leave EI as a checkbox. Incorporate relational behaviours into the leadership role. Reward the leaders who grow their teams, handle conflict productively and maintain psychological safety.

6. Normalise coaching and micro learning. But little you do is as important as this: short, focused coaching sessions and bite sized modules to help leaders practice new behaviours. To expect overnight transformation is to be naive; instead, it's the consistency of practice with accountability that counts.

Common pushbacks, and why they're misguided

"Isn't EI just soft skills? How do you measure it?" Yes, in part, but we have confirmed tools and behavioural signs. Measure trends, not absolutes. Consider employee engagement, turnover, conflict incident rates and qualitative feedback. Blend self assessment with 360 data and manager feedback. You'll get actionable intelligence.

"Can you teach empathy?" Yes. Not every one of us will be the next Mother Teresa. But the skills, perspective taking, listening and regulated responding, can be taught with practice. Behavior change is definitely doable with the proper coaching and organizational reinforcement.

"We have bigger priorities, revenue, cost control." Of course. Emotional intelligence is a lever for those. Better teams perform better. Leaders who know how to have tough conversations without creating collateral damage protect productivity and minimise hidden costs.

Organisational design and EI

We need to stop pretending that EI development is something that only HR or OD teams can do. It's a design issue. Take hiring for example: do you interview for relational competence? Do you care about technicals and people leadership in promotion decisions? In a system of performance, do you incentivise cooperation? If you miss these levers, EI programs will have a tough time being effective.

Small tactical adjustments lead to outsized consequences. Meeting norms, for example, a simple agenda, a start/finish bell, rules for speaking, minimise emotional friction. Frequent brief check ins as a team help prevent unobserved stress from boiling over. That's design, not psychology.

A quick aside on culture

Some companies are amazing at this. It's visible in the teams that allow for raw feedback, pass around credit, and escalate problems early. Other places are still running on fear and hierarchy, and EI training in those context becomes a bandaid. Culture change needs leadership modelling. Efforts will fail if leaders won't do the work.

One silver lining among all this: many Australian Organisations are waking up more quickly than their international counterparts. There's a pragmatic, no nonsense posture here, leaders want something that works, not platitudes. That's good. I have another positive (and somewhat controversial) view: typical performance reviews are highly overrated. Facilitate frequent, short form conversations that make the relational context EI needs.

A few caveats

• EI is not a replacement for good moral leadership. Well used manipulatively high emotional skill is scary. We have to marry EI with integrity and clear values.
• Don't look to move the needle on a single day of training. The price organisations pay for treating EI as a tick box is legitimate.

What success looks like

If you are running an EI programme, measure behaviour and also business results. Leading indicators: better 360 feedback, fewer escalations, higher psychological safety scores. Trailing indicators: retention, engagement, client satisfaction all the way back to performance measures related to revenue or productivity.

Here's one example of a tangible win: Generally speaking, teams that have higher empathy and self regulation in their leaders have greater discretionary effort, people go the extra mile. Which adds up to smoother rollouts, more referrals from clients and, yes, better bottom line results.

How to do it

The Implementer's Side of Leadership can be adopted in the form of a pilot by most organisations: a cohort of managers from a pivotal function, six months of coaching, micro learning modules and deliberate measurement. Don't boil the ocean. Begin small, test, iterate and scale when you have evidence.

If you are an HR leader, budget for continual coaching, not a one time workshop. So if you are a CEO, display the behaviours you want to see. If you are a manager, lead with curiosity, not certainty in your conversations. Simple.

Final thought, and rather squirmy advice

Train people ruthlessly but be ruthless in promoting them. This doesn't mean that being highly EI is a license to promote the technically brilliant but interpersonally tone deaf. Relational competence should be included in promotional criteria. That's a small structural shift for such a massive difference.

In other words: Treat emotional intelligence as if it were a job skill, not a warm and fuzzy, optional side project. Ingrain it in recruitment, promotion, performance metrics and daily rhythms. Invest in coaching and practice. Measure what matters. And, for heaven's sake, stop believing that it is optional.

We work with organisations all over Australia, from public service teams in Canberra through to sales teams in Melbourne, and the trend is clear: when EI is prioritised, results are better. Where it's dismissed, people are too. So, will you act on it? Or will it be yet another lovely idea on the learning shelf. The decision is very telling about how an Organisation values its people, and performs.