As investors, mentors, and coaches to hundreds of founders, the last year has only deepened our conviction that emotional intelligence (or EQ) is beyond just essential for any entrepreneur—it is perhaps even the single greatest factor in success. In fact, EQ can have a very real impact on a company’s bottom line; Gallup estimates that employee disengagement costs the economy $350 billion per year.
In an effort to understand the subject more deeply, we conducted a survey of about 100 founders on emotional intelligence, how 2020 impacted them, and how they’re growing their own EQ.
- More than 95 percent stated that EQ in leadership matters more than IQ.
- Nearly 60 percent of our founder respondents reported that in a year shaped by the pandemic and a crisis of racial justice, incorporating EQ into culture is more important now than ever.
So, knowing how deeply valued EQ is, how are these founders changing their approaches to accommodate a remote workforce? Two main themes emerged:
Connection and communication: Founders noted an increased lack of internal alignment and the need to rethink and amp up communications to improve understanding and connection. “It’s easier to fall out of touch now, and harder to read body language, [and] tone of voice. [We] must be more explicit about feelings and intentions and sometimes feels awkward,” one founder said.
The need for awareness of and empathy for employee mental health: Many founders commented that they felt an increased sense of responsibility for the emotional well-being of their teams. “COVID-19 has brought on heightened levels of stress and anxiety for everyone so it’s vital to possess more EQ to make sure teams are emotionally supported,” a founder said.
Building a founder’s EQ muscle
If we all agree that EQ is vital, how are we working to develop and/or improve those skills?
While we’re pleased to see that 41 percent of founders surveyed have a coach or therapist, we felt there’s a disconnect between the stated importance of EQ and a concerted effort to work on the many skills that make up emotional intelligence.
This may be because most of our respondents self-reported high EQ. Of course, studies have found most people don’t have the level of self-awareness (the cornerstone of EQ) they think they do.
In many ways, emotional fitness is like physical fitness. You build it through intention, practice, and habit. Mindfulness and breathing exercises, journaling to identify and process emotions, and practicing self-care are just a few suggestions we have for hitting the EQ gym.
Building a company’s EQ muscle
Building EQ into company culture also takes intention. Here are some of the ways our survey respondents have approached building EQ when it comes to:
- Hiring and operationalizing: “We screen during interviews, have an etiquette guide during onboarding, and it comes up in performance reviews.” —Milana Rabkin, STEM
- Communications, getting feedback, and checking in: “Daily stand-ups have been crucial because they allow us to see the state of the team, and keep a check of the overall mood and motivation levels of the company. We also do one-on-ones each week, as well as weekly retrospectives to not only help assess productivity but also get a better pulse on the things that worry or excite our team. “ —Alejandro Quilici, REEL
- Honesty and transparency: “We discuss the ups and the downs of the business so no one is kept in the dark, have open discussions when conflict arises, and evaluate constantly on what’s working and what’s not in terms of strategies with customers and in supporting the communication within our team.” —Heidi Hertel, Fritz Frames
- Coaching and development: “We invest time and resources in helping people fulfill their potential. We have a specific metric to make sure we constantly ask ourselves how much we’re expressing of our potential.” — Federico Pomi, Fabrica
- Listening, trust-building, and empathy: “When you truly have empathy for others, they confide in you. That creates trust. Trust creates honesty. Honesty is the root of creativity as it allows confident expression of self. Creativity comes from the self. So in short: Listening = next-level creative expression and product innovation.” —Joe Vezzani, LunarCRUSH
Startups, by nature, are stressful, fast-moving, and ever-changing environments. We believe emotional and social competence will be a deciding factor in what sets apart the strong, successful leaders and companies of 2021 and beyond.
Methodology: The EQ for Entrepreneurs survey was conducted by Anna Barber and FounderForward CEO Robyn Ward from June to September 2020 among 105 founders of established and up-and-coming startups, including Ordermark, The Cut, Comparably, Toucan, Jukin Media, HopSkipDrive, and Beekeeper’s Naturals. Respondents skewed toward the early stage, with roughly half leading companies at the angel or pre-seed stage and 30 percent in the seed through post-Series C stage. Research assistants Jama Mohamed and Oliver Hirshland contributed to this survey.