The importance of emotional intelligence in business turnaround

Emotional intelligence is the first skill business leaders need to apply when turning things around.

Failing businesses can be turned around if their leaders wield real emotional intelligence – a skill that can be learned and developed to become a powerful tool for business survival.

With the world in a state of permacrisis and a global recession looming, it’s more important than ever for business leaders to hone their emotional skills to achieve a proactive turnaround before it is too late. Emotional intelligence in business can, in times of crisis and decline, be more valuable than cashflow or brand equity. A growth or abundance mindset can be of immeasurable value when you need to overcome the greatest odds to survive.

A recent Statista survey in fact found that more than 40% of leaders believe emotional intelligence is must-have skill in business today.

Trustworthiness

Declining businesses that need to be turned around have a much greater chance of survival if the leaders in charge have high emotional intelligence and are able to use it to inspire real trust from the staff and stakeholders before embarking on a turnaround journey with them. I was once in a situation with a company where we were basically days away from the final liquidation and it was a very stressful time when everyone was questioning if it was even possible to save the business.

And the honest truth is, there was no Plan B. Everyone was scared and I knew I had to lead them out of the crisis. But it wouldn’t have worked if I did not have their trust. So, I had to make sure they knew I was the one they could trust to lead them out of crisis. I told all the staff: I am your Sherpa. I will get you through this to the summit of Mount Everest. Trust me. It was all I had at that stage, and they realised it too, but it made all the difference. If you can lead, and lead decisively, and your people follow you, you can survive through the crisis and turn things around.

Self-awareness

American psychologist Daniel Goleman, who authored the ground-breaking book Emotional Intelligence, describes self-awareness as the ability to recognise and understand your own emotions and the effect your actions, moods and emotions have on other people.

It is vital for business leaders to have real self-awareness about their strengths and weaknesses and the perceptions they evoke with people around them.

Sometimes a company needs a leader who can lead them out of crisis, who isn’t the nice guy. While it is important for business leaders to be empathetic and in tune with their people’s fears, anxieties, hopes and dreams, it doesn’t always pay to be nice and cosy with people. Sometimes you need a strong backbone and you need to let people know that they can’t mess with you, manipulate you or take advantage of a situation to get what they want. You need to sometimes be a prick quite deliberately, to ensure that you establish not only your own authority, but also that you are able to create a culture of accountability, respect and discipline within the organisation.

Professional boundaries

I have been involved in high level business turnarounds in Europe, the United States and South Africa for more than 20 years, and I have noticed a pervasive culture in South Africa to mix business with pleasure. In my experience, it is important to have rapport with your clients, but it is equally important to set healthy professional boundaries for business prosperity.

It is always more beneficial for a business’s long-term survival and sustainability to maintain totally transparent, honest and ethical business values. An honest and transparent business culture, where everyone from the CEO to the most junior team member are held to the same professional standards, quickly weeds out the bad apples.

Leaders who are able to create a culture of boundaries also enable healthy, supportive relationships between managers and employees. According to Goleman, healthy businesses foster a strong rapport between leaders and staff, and prize social skills such as active listening, verbal and non-verbal communication skills, leadership, and persuasiveness.

Conclusion

In the modern world of business, we operate in close-knit, inter-connected ecosystems, and in order to thrive and take a business forward, leader must use emotional intelligence to chart the way.

Businesses are all about people and the sooner we realise the power of emotional intelligence, the better off our businesses will be.