EQ is the special ingredient to feed entrepreneurial success
Photo: Getty Images/LukaTDB

EQ is the special ingredient to feed entrepreneurial success

Research from the Indiana University Kelley School of Business found that IQ is unquestionably the better predictor of job performance and career success across all jobs and careers. However, within the domain of entrepreneurship, emotional intelligence — the ability to understand, use and manage emotions to relieve stress — was found to be the stronger predictor of success.

The findings were based on an empirical review of nearly 40 previous studies and a meta-analysis of 65,826 entrepreneurs observed through that research.

The research found that those with higher EQ are better able to self-motivate and recognize opportunities.

Higher EQ leads to better social skills, such as perceiving other’s needs, making good first impressions, and influencing others in interpersonal interactions that all help in developing business networks and signaling legitimacy.

Finally, EQ more than other competencies, such as IQ, was found to help in handling the “high uncertainty and ambiguity” and crisis resolution often involved with entrepreneurship.

“Being an entrepreneur is not a ‘traditional workplace setting,’” said Regan Stevenson, assistant professor ​of entrepreneurship and management and the John and Donna Shoemaker Faculty Fellow in Entrepreneurship, in a statement. “If you are an entrepreneur, you know that managing your business can often feel like you are screaming alone on an emotional rollercoaster.”

Daniel Goleman’s best-selling 1995 book, “Emotional Intelligence: Why It Can Matter More Than IQ,” is credited with igniting the debate around the benefits of EQ versus IQ for leadership.

The benefits of a high-IQ include critical thinking, problem solving and the attentional focus that can drive breakthrough innovation. Yet a number of recent articles likewise roundly promote the value of soft skills during challenging times.

In a 2011 Time Magazine article, Mr. Goleman said his EQ theory had been misinterpreted by many. He agreed that high-IQ is a “better determinant of career success,” but argued relationship-building becomes more essential once the executive or employee reaches a certain level. He wrote, “In a high-IQ job pool, soft skills like discipline, drive and empathy mark those who emerge as outstanding.”

Entrepreneurs benefit more from emotional intelligence than other competencies, such as IQ – Indiana University Kelley School of Business https://blog.kelley.iu.edu/2021/01/28/entrepreneurs-benefit-more-from-emotional-intelligence-than-other-competencies-such-as-iq/

BrainTrust

"Both IQ and EQ matter; ideally, they balance competence and compassionate confidence. The most successful, respected leaders are well-rounded."

Lisa Goller

B2B Content Strategist


"Emotional Intelligence enables a leader to maintain a higher level of verbal and non-verbal communication with co-workers, including those with high IQs."

Karen S. Herman

CEO and Disruptive Retail Specialist, Gustie Creative LLC


"Also, there is something to be said for the IQ gap between leaders and their employees."

Evan Snively

Director of Planning & Loyalty, Moosylvania


Discussion Questions

DISCUSSION QUESTIONS: In what ways have you seen EQ being key to entrepreneurial success vs. IQ? Do you find EQ or IQ is more overrated as a driver of effective leadership?

Poll

13 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Dave Bruno
Active Member
3 years ago

In my experience, high-EQ leaders are typically much more effective, for many reasons, not the least of which being they have the humility and self-awareness to recognize where they need to hire high-IQ talent to help drive overall performance.

Richard Hernandez
Active Member
Reply to  Dave Bruno
3 years ago

Thank you Dave, your statement is spot on.

Lisa Goller
Trusted Member
3 years ago

Business school focuses on rational managerial tasks and IQ. Yet business is all about relationships; the “real world” rewards our EQ.

Leadership and selling reflect EQ hallmarks like listening, empathy and solving clients’ issues with care to earn trust.

EQ also boosts entrepreneurs’ resilience. When starting out, everything is chaotic. Staying optimistic, diligent and focused on continuous improvement helps entrepreneurs persevere.

Both IQ and EQ matter; ideally, they balance competence and compassionate confidence. The most successful, respected leaders are well-rounded.

Andrew Blatherwick
Member
3 years ago

The two founders of Iceland Foods Group, one of the UK’s biggest retail success stories, had only one O Level (very little formal educational qualifications) between them, but their EQ was very high – they were great entrepreneurs.

Evan Snively
Member
3 years ago

With regards to leadership, I feel that IQ can reach a point of diminishing (or even inverse) returns once a certain level threshold is hit, whereas with EQ the positive impact is pretty steady the higher the EQ level goes (I think this benchmark is capped at 160?).
Also, there is also something to be said for the IQ gap between leaders and their employees. A leader with a really high IQ might find it difficult to move in lock-step with staff who are not operating on the same wave-length. EQ can help bridge that gap, but it is not a solve-all.

Raj B. Shroff
Member
3 years ago

I think the high uncertainty and ambiguity of entrepreneurship might be better handled by people with higher EQ. Although looking at the world’s top billionaires, Musk, Bezos, Zuck, Google guys — they likely have very high IQs. One of my professors in business school said in his experience the most successful over the years are the #1 student and the last (lowest grade) student. I suspect each of the guys listed above were at the top or close to it.

I think the significance of EQ vs. IQ depends on the industry and the size and scale of the business. For some of these innovative companies, you need high IQ, EQ can be a seat in the C-suite to bring in more balance. Don’t get me wrong, I’ve always felt EQ is more important but can see the argument for either being overrated.

Jeff Weidauer
Jeff Weidauer
Member
3 years ago

Some of the smartest people in the world make terrible leaders. IQ does not create leadership skills. EQ bridges the gap for most to be successful – this is more evident today than ever.

Rick Watson
Reply to  Jeff Weidauer
3 years ago

“Some of the smartest people in the world make terrible leaders.”

I agree with this. Haven’t I read a story which suggest a high correlation between CEOs and sociopaths? 🙂

Joan Treistman
Joan Treistman
Member
3 years ago

Many high-level jobs require the intelligence that IQ typically suggests. And there may be some specific education involved, e.g., lawyers. Including entrepreneurial success and leadership as a consequence of EQ or IQ blurs the skills. EQ is often gauged by gut decisions made (and of course some decisions made with more thought), whether it’s about people hired and promoted or products/services supported or let go. You need a certain IQ score for education and skill acquisition. And being a successful lawyer is one occupation where I see an illustration of that combination. You can be successful on your own or within or running a practice. But let’s say you decide to open a gym, a restaurant or a flower shop. To be successful reliance on EQ will be more critical in the long run than IQ. People who are considered leaders in for profit and nonprofit organizations have attained that acknowledgement because of their EQ.

Gene Detroyer
Noble Member
3 years ago

Entrepreneurship is a 24/7 endeavor. The focus must be on the enterprise and personal wants and needs must come second.

Entrepreneurship is waking up at 2am in a cold sweat with a concern about an employee, customer, vendor, technology or most of all, cash flow. It is taking a deep breath and suddenly seeing an obvious solution to a nagging problem.

Entrepreneurship is making sure your vendors and employees are paid before you are. Entrepreneurship is the ultimate “Buck Stops Here.”

It takes a cool hand and a cool head to be successful in that environment. It takes a high level of EQ. But, in the long run, hirer some IQ.

Karen S. Herman
Member
3 years ago

As an entrepreneur, I find that both Emotional Intelligence and a high IQ are important facets of the teams I interact with, and in a leadership role, Emotional Intelligence is essential to successful interpersonal interactions that drive positive results. Emotional Intelligence enables a leader to maintain a higher level of verbal and non-verbal communication with co-workers, including those with high IQs. Interestingly, as the use of AI becomes more popular, machines are being built with Emotion AI, because to truly be successful, decision-making needs to embrace the emotional aspects, whether it is human or AI.

Ricardo Belmar
Active Member
3 years ago

There’s an old sales adage that “people buy from people” — in other words, even if you’re led by IQ, you’ll make the decision to buy based on EQ. For entrepreneurs, that couldn’t be truer!

Rick Watson
3 years ago

One reason is EQ creates better leaders – keeping teams together and knowing what motivates them, and EQ is absolutely critical in sales. Which is essential for an entrepreneur. 😉