Why Is Emotional Intelligence Important for SMB Morale?

Posted on January 24, 2024 | Updated on January 24, 2024

Everyone knows an intelligence quotient — the potential intelligence ceiling individuals can reach. But what about an emotional quotient? EQ leads many SMB managers to ask why is emotional intelligence essential for them and how it impacts resiliency.

Emotional intelligence is how people manage, analyze, and understand emotions of themselves and others. People with high EQ can read others and lead with the most impactful response for their emotional well-being. Additionally, when under stress, people with a well-tuned EQ navigate it gracefully. 

Learn why this resource is necessary for all SMB owners and how to cultivate it through practice and your work environment.

How Do Emotional Intelligence and Business Management Relate?

Let’s start by defining EI more completely. Multiple definitions and models exist for describing the nebulous concept. For our purposes, we are using the model posed by Daniel Goleman from his bestselling books on the subject. 

He defined EI as an umbrella term that includes several competencies. With expertise and balance between these five components, one can attain truly high EI. The skills include:


  • Self-awareness: The ability to objectively analyze the self, acknowledging everything from strengths to weaknesses or biases to proficiencies.
  • Social skill: Connecting with others with rational, controlled relationship management.
  • Motivation: Understanding what drives you and defines your values.
  • Empathy: Parsing and taking others’ emotions and potential reactions into account. This is not to be confused with sympathy, which is more of a feeling of pity without the ability to understand the circumstances.
  • Self-regulation: Being able to control and be flexible with emotions based on the situation in a productive manner.

Each skill requires unique building practices. Self-awareness requires more introspection against external feedback. Self-regulation requires patience. These skills add up to high EI but need individualized attention that needs multiple solutions.

The benefits of refined EI are extraordinary in the workplace. Research proves these astounding highlights, which are enough to convince SMB owners to make it a priority:

  • There is a correlation between top-ranking employees and high EQ — 90% of the best staff score well.
  • EQ influences 58% of your workplace decisions and performance.
  • People with lower EQ earn less than high-performing colleagues. The difference is around $29,000.

1. It Reduces Negative Customer Responses

Having a high EQ means you have more attuned conflict resolution abilities. If you can navigate tense or customer- or client-induced, rage-fueled circumstances calmly, it is more likely to be understood, and a compromise will arise from the issue. It not only creates a trusting atmosphere, but it translates to business performance and external metrics — like customer reviews.

Happy customers leave positive reviews, but upset customers do, too, when they feel their concerns were heard productively. There may have been an honest mistake on your part, and you were able to correct it. The customer may want you to change how you operate your SMB, and the suggestion was worth implementing. 

The point is to ensure you are not a pushover, but you are fair and attentive. Customers will notice and respect the adaptability, honesty, and community-based collaboration.

2. It Creates a Positive Environment and Team

EI is essential for the owner and manager, but it is equally — if not more important — to the rest of the team if that applies. Even if you are a solopreneur, you can still cultivate an atmosphere of high emotional intelligence if you hire third-party assistance, like an accountant or temp. If you have even one other staff member, good EQs lead to positive workplaces.

Team members develop a greater sense of respect for those in authority positions. Additionally, they trust the owner more because of their ability to self-regulate and maintain composure despite stressors — it levels out of the moods of the rest of the team. 

What this atmosphere achieves is excellent goal orientation. The staff will be aligned and more likely to work toward company-wide goals. Plus, they will feel the goals are important to them and align with their personal work achievements. When the team accomplishes these tasks, it feels monumental and meaningful, motivating them to strive higher.

3. It Drives Research on Customer Journeys 

One of the most pivotal points in an SMB owner’s progress is knowing their customer’s journey. It is critical to understand everything from customer motivations to purchasing behaviors. How can you learn more about these metrics and use them to foster brand identity with emotional intelligence?

The empathy and motivation aspects of EI are going to be key here. You will only be able to see your customers or their drive to participate with your brand as valuable if you come at their journey from their point of view. 

It also makes the data collection process more humanizing to see customers are more than a number. It makes your organizational commitment more transparent to know more data about the patrons of your products and services for future developments or business ideas.

4. It Meets Challenges With a Proactive Mindset

People with EI see opportunities in obstacles and failures. Instead of meeting resistance with complaints or despair, they have enough self-awareness to realize these emotions are not beneficial for business. Anger, frustration, or a combination of negative emotions that cause dwelling only delay progress. 

SMB managers combine their robust self-regulation with awareness to not only rationalize the purpose of their emotional responses but to transform them into something that incites action. People with low or no EI would allow themselves to dwell on the negativity, potentially spreading it to the rest of the business, lowering morale in every corner.

High EI recognizes the optimism behind a challenge because issues reveal growth. SMB owners know it feels better to put in the effort that people with low EI do not want to make than to remain stagnant. 

What Are Tips for Boosting Emotional Intelligence in an SMB?

EI works inside and outside of the workplace, but these tips are the most influential for small business owners and their staff:

  • Do communication exercises and learn how to convey emotions with clarity.
  • Encourage an atmosphere of positive, constructive feedback that is balanced.
  • Perform self-analysis on how you react to situations and pay attention to your behavior.
  • Practice self-soothing techniques for grounding yourself and your team’s emotions.
  • Be open to questioning why things are the way they are.
  • Practice gratitude and accomplishment as much as others might focus on drawbacks or obstacles.

You don’t have to attend traditional seminars or hold workshops, but you can instill these expectations in your team members by being present on the floor instead of in your office all day. You can also alert prospective employees during onboarding that these principles are essential for a thriving business, and those who cannot embrace them will not be fit for the role.

Why Is Emotional Intelligence Important?

SMB leaders must embrace emotional intelligence as a part of their leadership style so much that employees associate them with a high EQ. Emotional awareness and proficiency improve business resilience while improving yourself outside of work. 

Customers will notice the camaraderie and emotional regulation, feeling more proud in supporting a small business. It is a win-win situation, especially when it can influence others and make their working life more positive and emotionally nourishing.


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