Why Companies Fail without Leaders with Emotional Intelligence

Leadership requires much more than business smarts. Poor decision-making, breakdowns in communication, knee-jerk reactions to employees, taking credit for another's work or a lack of engagement are a few examples that can be problematic. These behaviors can act as a disease in business and undo even the most prominent companies. And what do these behaviors represent? Low emotional intelligence!

What is becoming more and more corroborated is that a leader's success depends not on a business degree but much more heavily on emotional intelligence: their ability to get along with people, and to lead and inspire people in the workplace.

Estimated reading time: 6 minutes

Managers discussing with employees the latest priorities

Table of Contents
The Breakdown of Communication Is the Death Knell for Companies
Why Emotional Intelligence Is Crucial in Leadership
How to Increase Emotional Fitness in Leaders
Focus on Employee Engagement
Promote Effective Communication in the Workplace
Invest in Employee Training and Development
Get Intentional with Company Culture and Teambuilding

The Breakdown of Communication Is the Death Knell for Companies

Harvard Business Review referred to communication failures as "The Silent Killer of Big Companies." Why would the demise be silent?

Often there is an unnoticed disconnect between employees and leaders that builds. A lack of employee engagement makes it easy to overlook problems smoldering. When there is a breakdown in communication between employees and their leaders or managers, the disconnect negatively usually affects customer service as well.

Employees face the public so if employees are unhappy, they convey their discontent subtly (or blatantly) to everyone they come into contact with.

In one company I worked with years ago, a resentful employee was stealing regularly to wreak havoc, and another was embezzling for over a year before it was discovered!

Leaders and company owners that don't pay attention and create a culture of engagement incur the biggest costs.

An upset businesswoman reading the latest reportA disgruntled employee's effect can be heard in a short exchange with a friend they meet for coffee or a beer after work. Or their resentment can ooze out in a remark while taking orders from customers on the company phones. It can also be a snide comment to a vendor.

When a leader ignores the needs of their employees, doesn't give them adequate validation or constructive feedback, or puts productivity over creating a healthy work environment, the unraveling can be a game of Russian roulette.

Recent studies reveal that the number one reason employees leave companies is due to "bad" management. Even when employees love their work, they wear down under poor leadership. It boils down to interpersonal skills.

Trust is the foundation of all our relationships, including in the workplace.

Some of the things employees voiced in the study were a lack of appreciation, leaders not taking responsibility for mistakes, and not acknowledging employees' improvement.

These actions may appear straightforward, but a CEO or manager needs an awareness of other people to engage employees at this level. They also need an understanding of how they impact others.

Both of these skills are emotional competencies. It turns out that such simple actions require emotional fitness.

Maintaining an awareness of employees' challenges and attitudes, inspiring a group, galvanizing a team, communicating effectively, or showing empathy for an employee's difficulties all require emotional intelligence far more than a high IQ.

Why Emotional Intelligence in Leadership Is Crucial

The Harvard Business Review called emotional intelligence “ a revolutionary, paradigm-shattering idea.” This concept—and practiceis especially critical in leadership; without it, teams don't thrive.

Daniel Goleman, an internationally known psychologist, debunked the idea that abilities stem simply from IQ. He speaks to this critical need and EQ's importance:

"Without it, a person can have the best training in the world, an incisive, analytical mind, and an endless supply of smart ideas, but he still won’t make a great leader."

When running a company, no matter its size, leaders can fall into the trap of getting so busy that they ignore the cues of employee unrest. Or at other times, leaders become reactionary toward situations. Another common mistake is to allow conflicts to go unresolved merely because leaders are overwhelmed. Regardless of the reasons, these reactions and festering resentments build. Sometimes reversing employee attrition comes too late.

Quote by Simon Sinek

Once a company starts unraveling from within, employees have sometimes reached a place of no return. Their emotional bank account is empty or overdrawn. Employees stop engaging and do as little as possible to make it through the day. There is a dramatic upturn of dissatisfaction and discouragement that leads to more mistakes, lower productivity, and higher costs.

When employees feel undervalued or that their contributions don't matter, these feelings eat away at the morale of a team. Employees start brushing up their suand putting feelers out to the market. They start looking elsewhere for a new job and are ready to jump ship when an opportunity arises. Even the most loyal employees will begin to move into a survival response because their livelihood and their family's well-being depend on their employment and the stability of their employer.

If leaders are preoccupied and unaware of the problem brewing, this "silent killer" breaks communication down further. When employees' nonproductive behaviors and workplace drama increase, such as complaining, gossiping, sloppy work habits, squabbles between co-workers, and excessive chit-chat, companies can mimic a middle school more than a workplace.

For an in-depth look at ways to increase emotional intelligence in the workplace, check out our article: "27 Best Ways to Raise Emotional Intelligence in the Workplace."

Successful leaders aspire employee engagement.

How to Increase Emotional Fitness in the Workplace

So what is needed to be a successful leader? 

Below are actions that are important for any leaders seeking to build a unified team with engaged employees. However, for every leader, raise your self-awareness and build EQ skills to be a better leader. Leadership is first about leading yourself and aligning your behaviors with your core values. Next, hire an executive coach to give you new perspectives and mindsets while learning skill sets you may be missing.

Then, turn your attention to your company culture and start investing in your employees and teams. Make it a joint growth journey together toward greater emotional intelligence and fitness!

Focus on Employee Engagement

Leaders and managers take time regularly to build their relationships with their employees. They get to know their employees as people as well as what motivates them in their work. The company invests in creating a culture of trust, openness, and creativity. Employee engagement is rooted in leadership commitment to culture.

Promote Effective Communication in the Workplace

Effective communication is first and foremost modeled. When a company invests and reinforces open communication, it cultivates an environment where authentic, respectful, and honest interactions are commonplace. How is openness fostered?

  • Mindful responses
  • Deliberate actions are taken to resolve conflicts quickly.
  • Difficult conversations are embraced.
  • Problems are seen as opportunities in business and relationships.
  • Effective feedback and follow-up are given to shift and repattern inappropriate employee behaviors that don't support teambuilding or the company's mission and values.
  • Employees are encouraged to give honest and constructive feedback about management.

Invest in Employee Training and Development

A growth mindset is promoted as an overall atmosphere of learning. Opportunities for development are prevalent, and employees' requests are seriously considered by leaders. Training is tailored to the needs of employees while also targeted to the ongoing success of the company.

Get Intentional with Company Culture and Teambuilding

For employee contributions and talents to be valued, utilized, and recognized, it's imperative that leaders and managers are intentional. There is a regular celebration and acknowledgment of efforts and accomplishments. Collaboration becomes a way of doing business.

There is a sense of team and belonging. Employees feel like they're part of something worthwhile and bigger than themselves. Work is meaningful and tied to a vision and mission.

Be a teambuilder, not just a leader.

"Emotional intelligence is a powerful tool critical for exceeding goals, improving critical work relationships, and creating a healthy, productive workplace and organizational culture." says Brent Gleeson in his article, "5 Aspects of Emotional Intelligence Required for Effective Leadership.

Group of office workers collaborating and sharing their ideas.


Take action today by reaching out to connect with your people. Leadership means showing employees that they're worth your time and attention, even if it's only a friendly "Good morning!" or asking about their family. Sometimes it's the small gestures that go a long way. An authentic leader cares. Leaders are not only building a company; ultimately, they're growing people. Investment in people pays tremendous dividends through strong, happy teams and higher creativity and performance.

To learn more about how to be an authentic leader and manage employees with ease and skill, check out Heartmanity's business programs.

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Jennifer A. Williams / Heartmanity for BusinessJennifer A. Williams / Heartmanity for Business
Jennifer, the founder of Heartmanity, is an Executive Coach and Relationship Strategist. Her two decades of expertise in training leaders and teams give her amazing insights. Jennifer's primary focuses are authentic leadership, effective communication, and emotional intelligence in the workplace. Jennifer teaches a holistic approach, specializing in transforming unproductive behaviors into emotionally intelligent actions, which creates thriving work relationships and catapults a company to success.

Posted in Business and Leadership, Emotional Intelligence

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