Improve Your Profit Margin by Sharpening Up Your “Emotional Intelligence”

“All things being equal, people will do business with, and refer business to, those people they know, like and trust.”  Bob Burg

Using hard data such as productivity and profit margins, psychologist and business specialist Dan Goleman has demonstrated the importance and power of “emotional intelligence” as a determinant of financial success. His work should not be confused with various fads that have ruined workplaces in the past. It’s serious business and should not be taken lightly.

Most people have run across the term “emotional intelligence” (also known as social intelligence), but understandings of it range from the vague and imprecise to the ridiculous and erroneous. Such tends to be the case with popular trends in business.  But let’s take a look at Goleman’s work and why it should be of interest to those who seek to improve themselves and their profit margins.

Goleman’s work:  Serious business

Rather than dabbling in theory, Goleman developed a data driven view of what he chose to call “emotional intelligence” (often abbreviated as “EQ”). He started with individuals whose performances were identified as stellar, and contrasted them with persons whose performances were mediocre to poor in search of what could account for the differences between these groups.

He then developed profiles of persons who were objectively identified as “good” or “not-so-good” at contributing to their companies’ success. From this he was able to determine what seemed to be most predictive of their performances. Included in his analysis were variables such as technical knowledge, IQ, various other cognitive skills, as well as assessments of emotional intelligence (EQ).

The best predictor of success

Let’s not downplay technical expertise— his results indicated that knowing the technical end of one’s business was indeed crucial. IQ scores were also somewhat predictive. But by far the strongest predictors of performance were his assessments of EQ. 

Lumping together employee data from the lowest to the highest levels of the organizations he studied, he found that EQ was twice as important at the other variables included in the analysis. No matter what level in an organization, higher levels of EQ predicted greater success. 

Granted, other factors did matter, but EQ was the most powerful single determinant of performance. Goleman suggests that higher levels of emotional intelligence allowed those he studied to put their other skills to more productive use.

EQ:  Essential for effective leadership

Perhaps most dramatic were Goleman’s findings as they related to leadership positions.  The higher up in the organizational hierarchy a person was, the more her or his level of EQ distinguished them from their more mediocre counterparts.

Among the highest levels of leadership, EQ accounted for about 90 percent of the differences between star performers and their more average counterparts. Yes, technical knowledge surely matters. But the world is full of technical experts who blunder through life offending others and doing immeasurable damage to their business.

Granted, there are those individuals who succeed despite their insensitivity and abrasiveness, giving rise to illusions that ruthlessness and sheer determination are necessary for success in business. But ruthless individuals rarely achieve the levels of success that they might have had they been stronger in those areas of function associated with EQ.

This behooves us ask some questions regarding just what EQ consists of and how it contributes to the success who are gifted with it.

The nature of emotional intelligence

Critics of Goleman’s work tend to be academics whose objections revolve around theoretical clarity and precision. The critics point out that rather than being a singular attribute, EQ is actually an array of separate and distinct abilities. I prefer to let the academic theorists worry about that. 

Goleman is a problem solver, not a theoretician. What is certain is that what he chooses to refer to as EQ is measurable and does indeed predict performance in real world business settings.  That’s what matters to most of us. 

Let’s take a look at what Goleman defines as the ingredients or components of EQ and why they would contribute to success in the world of business. Actually, it all adds up if regarded through the lens of what used to be called “common sense.” From my experience with academic theorists, that’s probably why they don’t like it.


This is the foundation for EQ.  Individuals who are high in this attribute are aware of their own strengths, weaknesses, moods, and drives.  They are not what we would refer as “in denial.” The old adage, “to thine own self be true” defines their outlook on themselves and their activities.

Their reality contact is excellent, and they tend not to be defensive regarding their own strengths and limitations. When they make mistakes, they are quick to identify and correct them. They value honest feedback and useful criticism. This is a great foundation for those who intend to perform at their highest levels.


Along with possessing a high degree of self awareness, those who are high in EQ are excellent managers of themselves. Knowing those areas in which they might be impulsive or defensive, they turn this knowledge into constructive action. 

They are good at deferring gratification and are very good at putting their time to very good use. In a world in which so many people are their own worst enemies, individuals high in EQ avoid self-destructive activities and channel their energy into the pursuit of realistic, predetermined goals. They know where they’re going and keep themselves on course.

Strong needs to achieve

Individuals Goleman identifies as high in EQ are also driven by a strong desire to be excellent at what they do.  This is to be distinguished from a drive for money per se. If they’re “only in it for the money”, that’s not EQ— that’s greed.

They succeed by excelling at what they do in an intrinsic sense, and not through cheating or deception. By knowing what their strengths and limitations, they avoid those activities in which they would have to cheat or employ deceptive practices in order to succeed.  Whatever they do, they’re in it for the long haul.


Critics of EQ generally reduce it to sensitivity and concern with the feelings with others, excluding the other dimensions.  To do so is to misconstrue its nature. Goleman is quick to point out that empathy alone is not EQ.

It is true that there are many people whose concerns with the feelings of others are neurotic and impractical. Research on leadership has long shown that attempting to please everybody is a formula for organizational disaster.

But coupled with self-awareness, self regulation, and strong needs to achieve, the ability to understand the feelings and perspectives of others is an invaluable business tool. In isolation, any of these attributes can be problematical. Together, however, they render one well equipped to deal with employees, clients, and potential customers.

Social skill

We all know that the ability to cultivate constructive long-term relationships with others is an essential in business. Goleman is quick to point out that social skills naturally flow out of being high in the other four dimensions of EQ. 

Can emotional intelligence be learned?

Research indicates that it can indeed be “sharpened up” in individuals who are highly motivated to improve in that area. But it doesn’t happen in response to one day seminars or reading self help books.  It takes effort, time, and some profound changes in personal routines.

Goleman warns that changes in EQ are rooted not in higher level “cerebral” brain centers, but is dependent upon changes in the limbic system, which is a much less accessible and mysterious area of the brain that is associated with gut emotional reactions.  Until recently, the limbic system’s role in higher functions was overlooked. 

Books and training seminars are designed to appeal to the verbal or “logical” brain functions.  This is why the bromides offered by so many self-proclaimed “experts” on leadership fail.  The keys to improving one’s EQ are rooted in much more obscure and mysterious brain functions that books and one-day seminars rarely touch.

Keys to change: Coaching and commitment

Goleman cites numerous cases of executives who, deciding that they had a problem, were able to improve by committing themselves in earnest to working with properly qualified business coaches over relative long periods of time.

They generally found that they had to make changes on a scale described by Charles Dickens in his fictitious account of the callous Ebenezer Scrooge in A Christmas Carol.  Now that’s dramatic!

Improving your levels of EQ is a serious undertaking, but can be well worth the effort in terms of improving your effectiveness as a professional as well as your relationships with family and friends.  But again, genuine improvement generally requires the services of a good business coach or other type of confidant.  Your other option, however, is to wait on visitations from the Ghosts of Christmas Past, Present, & Future.