The Growing Importance of Emotional Intelligence in Leadership

By Lori Moffatt, Managing Director, Waterstone Culture Institute

In the past, emotions were often seen as irrelevant in the workplace. However, the landscape has shifted dramatically in recent years. The convergence of the global pandemic and a workforce increasingly composed of Gen Z and Millennials—who now make up 70% of the workforce—has fundamentally changed the skills required for effective leadership. Today’s workforce demands purpose-driven, transparent, and empathetic leaders who engage in a more humanistic approach.

Emotional intelligence (EI) has emerged as a critical skill for leaders, distinguishing good leaders from great ones. It’s not just about handling the “soft” aspects of leadership—EI equips leaders to navigate the tough challenges with greater effectiveness.

When leaders are aware of their emotions and manage them effectively—whether they’re dealing with a tough day, overcoming a setback, or celebrating achievements—they consciously decide how they want to present themselves to their team. They avoid reacting impulsively in challenging situations and instead choose the most appropriate response after careful reflection. Emotionally intelligent leaders are not only attuned to their own emotions but are also highly aware of how their team members are feeling and behaving.

These leaders have a profound impact on organizational culture, fostering trust, collaboration, and ultimately, improving performance.

In his 1995 book, Emotional Intelligence: Why It Can Matter More Than IQ, Daniel Goleman highlighted the importance of prioritizing emotional intelligence to boost employee performance and satisfaction. While the importance of EI has been recognized for years, a 2022 survey by Harvard Business Publishing Corporate Learning revealed a significant gap: although nearly 60% of senior leaders claimed their culture emphasized authentic leadership, fewer than half of lower-level employees agreed. This gap underscores the need for a renewed focus on developing EI skills among leaders.

Key Markers of Emotional Intelligence for Leadership Assessment

When assessing leadership, whether for recruiting new talent or developing existing leaders, consider focusing on these two key aspects of emotional intelligence:

1. Emotional Awareness in Leadership—Self and Others

Understanding and identifying emotions in oneself and others is crucial for effective leadership. Empathy, the ability to deeply connect with and understand the emotions and perspectives of others, is foundational for building trust, fostering open communication, and creating a psychologically safe work environment—all of which are essential for driving team engagement and performance. To evaluate a leader’s emotional awareness, consider asking:

• How do you recognize when your emotions are impacting your decisions or those of your team?
• Can you share an example of how you managed your emotions during a particularly stressful situation?
• Describe a situation where you disagreed with a team member’s approach or idea. How did you handle the conversation, and what steps did you take to understand their perspective?

2. Regulation of Emotions

The ability to think before acting ensures consistency in leadership behavior and better management of emotional responses. Leaders who self-regulate are also more attuned to the emotions of others, fostering a caring and supportive environment. They handle their emotions in healthy, constructive ways. To assess a leader’s emotional regulation, consider questions such as:

• How do you stay calm and composed during challenging situations?
• Can you provide an example of when you had to manage your emotions to achieve a positive outcome?

Reflecting on Your Emotional Landscape

Developing emotional intelligence begins with self-awareness. Reflect on these questions:

• How do I act when I feel good versus when I don’t?
• How do I respond when triggered?
• What emotions am I feeling right now?
• What do I aim to achieve with my emotions and feelings?
• What does my body language currently say? What is the body language of others telling me?

Download our ebook for more questions!  

The good news is that emotional intelligence is a skill, and one that can be developed over time. At Waterstone, we offer a suite of independently verified, evidence-based leadership assessments and surveys, including an EQ assessment that uses five factors to measure an individual’s emotional quotient. Find out more by booking a call with our team today.