Monday, 02 April 2012
Is EQ More Valuable than IQ for Entrepreneurs?
What makes an Entrepreneur? How can an entrepreneur’s ability be measured? The first thought that popped into my mind is his resume, but experience alone cannot make an entrepreneur successful. IQ was my second thought, but studies have shown that after the threshold of 120 IQ, any higher IQ does not have a significant effect on the outcome of success.
A term called emotional intelligence seems to be the missing “X” factor.
What is emotional intelligence?
EI, or often known as EQ, is an array of personal, emotional, and social abilities and skills that determine how well the individual functions in any given environment. EI refers to recognizing how you and others feel and sensing what to do about it.
Emotional Intelligence is still a relatively new subject. Although it’s a growing topic of discussion, the general public is still mostly left in the dark.
From the literature on emotional intelligence, it is evident that the lives of people who have higher emotional intelligence are safer, happier and more successful. Altogether, people who are emotionally intelligent and optimistic have an attribute that enables them to focus on solution rather than cause. The attributes include: emotional self-control, delaying gratification, and looking at things in a bigger picture. Let’s see how EI contributes in the workplace and as an entrepreneur.
Emotional Intelligence in Important Entrepreneurial Traits
Longitudinal studies of Harvard graduates and Foreign Service Officers found that test scores on entrance exams did not predict career success. On the other hand, Daniel Goleman, a forerunner on studies in EI, did an analysis of 181 jobs in 121 organizations and found that emotional competencies were the best differentiations between star performers and typical performers. He found that EI is twice more important than technical skills and IQ for jobs at all levels. Goleman also reported that EI plays an increasingly important role at the highest levels of a company. Goldman said "When I compared star performers with average ones in senior leadership positions, nearly 90 percent of the difference in their profiles was attributable to EI factors rather than cognitive abilities."
To have an understanding of that, here are some key traits and skills needed by entrepreneurs that draw heavy influences from EI:
Part of emotional intelligence is about awareness, prioritizing, and the ability to look at the bigger picture without being carried away by the details. This is more important for entrepreneurs than most others. Emotions are a huge component of decision making as well. Most big decisions are made based on emotions i.e. choosing a college, spouse, or car. Although emotions should not be ignored, they should not overwhelm the decision making process. Check this chart to see the effects of emotions on financial risk taking.
Strategic and technical breakthroughs
Researchers have found that creativity is generated by emotion. Creativity is construed as the ability to cognitively construct an idea or concept inspired by emotions. For entrepreneurs, the ability to formulate original ideas triggered by emotions is of the most utmost importance. Creativity plays a huge role in problem solving as it is used to match the solution with the problem.
Open, honest communication
In every interaction, there are ways people usually interact, and then there are better ways a person with high EI can naturally achieve. When rewarding and reprimanding an employee or colleague, there is a whole process of understanding, getting the message across, and remaining in good terms.
Entrepreneurs are leaders and they must communicate their vision to others, accept responsibility for failure, build relationships, and be decisive.
Trusting relationships and team work
Relationships and connections are an important aspect of entrepreneurship. Knowing the right people and knowing who to count on, can make all the difference. While working with others, a high Emotional Quotient group would have a low number of interpersonal conflicts, high motivation, and easier communication.
Maintaining a good work ethic
Emotional intelligency isn’t just about understanding others and communication. It is also about self-awareness, the ability for an individual to be in tune with his/her feelings and actions and to recognize the impact this has on others; self-management, the ability to keep impulsive behavior under control and stay calm during stressful situations, maintain a positive outlook, emotional self-control, and achievement orientation. Understanding oneself also helps entrepreneurs build an A-Team according to his/her weaknesses and strengths.
Empathy helps understand what can be done differently in creating or delivering the product to make a customer happier. EQ helps understand consumer buying decisions and how to keep consumers engaged.
Still trying to find venture partners, employees, or wondering if you are up to the task? Keep EI in mind when you are on the lookout, and consider taking an EI test to measure your abilities.
Currently working on a startup, Arthur Wei hopes to break it big as a young entrepreneur. He also enjoys reading psychology and entrepreneurship articles and then compiling them into what he thinks are interesting posts on his blog Right of Wei.