It’s just not enough anymore to be great at what you do to become a great leader.  Outstanding leaders today are able to navigate change and conflict while promoting wellbeing for their team.  In Australia, the shift towards fostering emotionally intelligent and intellectually sharp leaders has become a top priority to drive business growth and boost employee retention. The whole package – both high cognitive intelligence (IQ) and high emotional intelligence (EQ)  is increasingly becoming the norm for top business professionals. Businesses are realising that effective leadership isn’t solely about making smart decisions but also about understanding, connecting, and inspiring teams.

At Uplift Recruitment, we pride ourselves on having a high EQ and personalised touch.  Today we are exploring why and how small business leaders must up-skill in both IQ and EQ. We’ll wrap with a few practical tips to help leaders build the emotional and intellectual competencies that drive lasting success.

The Evolution of Leadership in Australia

Australian companies, like many others worldwide, are operating in a more complex and dynamic environment than ever before. Remote work, technological disruption, and the changing expectations of the workforce are reshaping what it means to be a leader. No longer can a leader simply rely on past experiences or hierarchical authority. Leaders are now expected to demonstrate a combination of cognitive skills (IQ) for strategic decision-making and problem-solving, coupled with emotional intelligence (EQ) to navigate interpersonal relationships and lead with empathy.

The rise of EQ in leadership aligns with a growing body of research that highlights how emotionally intelligent leaders are more effective at managing teams, improving employee engagement, and driving overall organisational performance. Leaders who can read and manage their emotions, as well as those of others, foster trust and loyalty within their teams.

What Is Emotional Intelligence?

Emotional intelligence refers to the capacity to comprehend and regulate your own emotions while also recognizing and impacting the emotions of others. The concept was introduced in 1990 by researchers John Mayer and Peter Salovey and later gained widespread attention through the work of psychologist Daniel Goleman.

1. Self-awareness: The ability to identify what emotions you feel and why you feel them.
2. Self-regulation: The ability to keep your emotions, especially negative ones, in check.
3. Social awareness: The ability to read and interpret the emotions of others.
4. Relationship management: The ability to interact with others through the use of interpersonal skills.

Why Leaders Need Both IQ and EQ

For decades, leadership models have prioritised cognitive intelligence. Skills like strategic thinking, financial acumen, and operational excellence were seen as the key components of effective leadership. However, we now know that cognitive intelligence alone is not enough.

While IQ is crucial for technical problem-solving and understanding complex data, it is EQ that allows leaders to communicate their vision, manage conflicts, and create an inclusive, supportive culture. The ideal leader is one who not only makes sound, data-driven decisions but can also motivate and inspire teams. As LinkedIn’s resident workplace expert, Dan Shapero, explains, leaders who balance intellectual capabilities with emotional sensitivity are in demand.

The marriage of IQ and EQ in leadership can be described as both a science and an art. IQ helps a leader understand how to drive profitability, while EQ helps them connect with people in a meaningful way. Together, these two elements contribute to a thriving work environment where people feel heard, valued, and empowered to contribute their best work.

The Business Case for Up-Skilling in EQ

Emotional intelligence isn’t just a “soft” skill; it’s a business imperative. According to a report by TalentSmart, EQ is responsible for 58% of job performance, and 90% of top performers have high EQ. High emotional intelligence is linked to improved employee engagement, reduced turnover, and better decision-making—all factors that contribute to organisational success.

In Australia, where the job market is highly competitive and retaining top talent is a constant challenge, having leaders who can foster strong emotional connections with their teams gives organisations a critical edge. Leaders with high EQ are better equipped to build trust, navigate difficult conversations, and maintain a positive work culture.

For example, Google has long recognized the importance of EQ in leadership. Project Oxygen, a research initiative by Google, revealed that soft skills such as emotional intelligence were just as important as technical skills in making a great leader. By emphasising EQ in its leadership training programs, Google saw improvements in team performance and employee satisfaction. The ability of managers to understand and manage emotions effectively has helped Google create an innovative and collaborative culture that has fueled its growth.

Moreover, a McKinsey report found that companies with highly engaged employees outperform their peers by 147%. Engaged employees are more productive, more loyal, and more likely to be advocates for the company, creating a ripple effect that extends beyond the immediate team. This underscores why it’s essential for business leaders to invest in developing their emotional intelligence alongside traditional leadership competencies.

The Challenges of Up-Skilling in EQ

You may notice that when it comes to EQ, it seems like some leaders “just get it,” while others don’t.  We know emotional intelligence is important, but it takes practice and intention to develop. Unlike cognitive intelligence, which is largely stable throughout life, EQ is a set of skills that can be developed and honed with effort and practice. However, many leaders may find this more challenging, particularly those who have historically prioritised IQ-based competencies.

Some leaders might resist the idea of developing their EQ because it feels less tangible than IQ. Emotional intelligence involves self-awareness, empathy, and emotional regulation—areas that require deep introspection and a willingness to change ingrained habits. It’s not a skill that can be mastered overnight, and for leaders who are used to quick wins and immediate results, this can be a tough adjustment.

Practical Steps for Building EQ in Leadership

1. Develop Self-Awareness

   Self-awareness is the cornerstone of emotional intelligence. Leaders need to understand their emotions, what triggers them, and how these emotions impact their decisions and interactions with others. Mindfulness practices, regular self-reflection, and seeking feedback from peers or coaches can help leaders increase their self-awareness.

2. Practice Empathy

   Empathy—the ability to understand and share the feelings of others—is a critical skill for modern leaders. By practising active listening, leaders can better understand the needs and concerns of their team members, which can inform better decision-making and create a more supportive work environment.

3. Improve Emotional Regulation

   Emotionally intelligent leaders are able to manage their emotions, even in high-stress situations. This doesn’t mean suppressing emotions, but rather understanding them and responding in a way that’s constructive. Techniques like deep breathing, taking a pause before responding, and cognitive reframing can help leaders maintain emotional control.

4. Communicate Effectively

   Leaders with high EQ know how to communicate with clarity, purpose, and empathy. They tailor their communication style to meet the needs of their audience, ensuring that everyone feels heard and understood. This is especially important in situations that require difficult conversations or delivering feedback.

5. Build Strong Relationships 

   Emotional intelligence is about building authentic, trusting relationships. Leaders who invest time in building relationships with their teams, peers, and stakeholders will see better collaboration, more innovation, and improved morale.

IQ: Still Critical for Leadership Success

While emotional intelligence is gaining more attention, it’s essential not to underestimate the importance of cognitive intelligence in leadership. IQ is crucial for strategic decision-making, analysing complex information, and solving intricate problems. In the age of digital transformation, Australian leaders are increasingly required to navigate a wide range of data, from financial reports to customer insights, to make informed decisions.

Leaders who lack intellectual rigour risk making poor decisions that could have long-term repercussions for their organisations. Upskilling in IQ-based competencies such as data analysis, strategic thinking, and financial acumen is still a top priority for many Australian businesses, particularly those in sectors that are undergoing significant technological change.

Combining IQ and EQ: The Ideal Leadership Formula

The most successful leaders in Australia will be those who can combine high levels of both IQ and EQ. This balance enables leaders to not only make smart business decisions but also to inspire their teams, foster innovation, and create a resilient, adaptable workplace culture.

For leaders seeking to up-skill in both areas, the following strategies can help:

1. Continual Learning 

   Leaders should never stop learning. Whether it’s through formal education, mentorship, or self-directed learning, leaders need to stay on top of industry trends and continuously sharpen their cognitive skills. Simultaneously, they should engage in professional development programs that focus on emotional intelligence, communication, and interpersonal skills.

2. Mentorship and Coaching

   Finding a mentor or coach who excels in both IQ and EQ can accelerate a leader’s development. Mentors provide valuable feedback, model effective leadership behaviors, and offer guidance on how to navigate complex business challenges while building strong relationships.

3. Lead by Example 

   Leaders who want to foster a culture of learning and development within their organizations must model this behaviour themselves. By openly working on their own skills, both cognitive and emotional, leaders set the tone for their teams and encourage others to follow suit.

4. Create a Supportive Culture 

   Organisations need to provide opportunities for leaders to up-skill in both IQ and EQ. This can be through formal training programs, peer learning groups, or simply fostering a culture where emotional intelligence is valued as much as intellectual capability.

Forbes Magazine called Emotional Intelligence, “the No. 1 Leadership Skill for 2024.” The leaders who will drive the future of business are those who can master both the cognitive and emotional aspects of leadership. By up-skilling in both IQ and EQ, leaders can navigate the complexities of modern business while building strong, resilient teams. As businesses continue to adapt to a changing world, the need for emotionally intelligent leaders who can make smart decisions has never been greater. Organisations that invest in developing both IQ and EQ in their leadership teams will be better positioned to thrive in today’s competitive landscape.

Do you work for an organisation with leaders with high EQ?  Or low EQ?  How emotionally intelligent would you consider yourself?  If you’re leading a small business and want to learn more about building an emotionally intelligent team, contact us!