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Emotional intelligence (also known as emotional quotient or EQ) is the ability to understand, use, and manage your own emotions in positive ways to relieve stress, communicate effectively, empathise with others, overcome challenges, and defuse conflict.
Emotional intelligence helps you build stronger relationships, and succeed at school or work, and achieve your career and personal goals. It can also help you to connect with your feelings, turn intention into action, and make informed decisions about what matters most to you.
Emotional intelligence is commonly defined by four attributes:
- Self-management – You can control impulsive feelings and behaviours, manage your emotions in healthy ways, take initiative, follow through on commitments, and adapt to changing circumstances.
- Self-awareness – You recognise your own emotions and how they affect your thoughts and behaviour. You know your strengths and weaknesses and have self-confidence.
- Social awareness – You have empathy. You can understand the emotions, needs, and concerns of other people, pick up on emotional cues, feel comfortable socially, and recognise the power dynamics in a group or organisation.
- Relationship management – You know how to develop and maintain good relationships, communicate clearly, inspire and influence others, work well in a team, and manage conflict.
(You can read more here; https://www.helpguide.org/articles/mental-health/emotional-intelligence-eq.htm)
These days, a lot of parents are using their resources and time on development of their children’s intelligence, or as we call it, being ‘book smart’. However, lack of focus on the emotional intelligence create a lot of high-flying individuals who are good at their jobs and professions, but not necessary achieving the best in other aspects of their lives.
As a society with 90% small to medium businesses (more one-man band, trades people and little family businesses), history has proven a lot do not survive after 2–5 years. Why?
The characteristics of a business is like the personality of the owners. Usually you’ll see local bakery owner who is heart-warming, community oriented, passionate about his/her business, will reflect on the value of the bakery, e.g. never use expired ingredients, upholds the quality of the products, genuinely cares about their local community needs etc.
The opposite would be people buying a bakery for the sake of earning money, tends to use expired ingredients and do whatever it is necessary to cut down cost and waste, thinking they can fool the customer with less fresh produce. Their sole purpose is to maximise profit, not a single care of the whether baking is their passion or enjoying the fact that they can bring a smile on their customer’s faces.
Business owners who believe that as long as they can throw the orders around, and instruct their employee to carry out the tasks, will eventually see results, but just short-term ones. For example, employees doing the bare minimum, not treating his/her customers or clients as he/she would like to be treated. That is the vicious cycle of treating people like numbers, they will turn into just numbers, instead of a friend or a team player who is proud of what they do, proud of delivering the business values.
The ultimate test on small business owners are their financial literacy and soft skills. Owning a small business requires certain level of financial literacy. I have seen owners looking the amount of revenue they are generating and developed a large spending habit based on it – they have not looked at any tax obligations, paying their employee or future preparations. They then take on a business loan to cover the cashflow needs – because they still think the company’s ‘good position’.
They end up with huge interest expenses and a weakened business position and outlook. Especially, under the current economic condition, uncertainty is a norm with the worldwide chaos, without thinking about how to weather the storm, businesses tend to be running in a very delicate state.
Not everyone is financially literate, that is where we as accountants come into the picture. The soft skills, such as keeping an open mind, putting trust into other people’s professional judgements and skills, tend to play a big part into safeguarding the business. Good communication and having a will to listen applies to every aspect in our lives, including dealing with kids at home, asking for an honest opinion from your spouse and partner, having a honest conversation with your staff or employees about how things are going, etc. Asking your accountants about how your company is doing in terms of financial health, sustainability etc, needs a lot of trust. If there is no trust, there is no teamwork, it only works if you had multiple brains and can show up in multiple locations!
A well-rounded person tends to manage business more effectively. Because it is never about what we don’t know, it is always about admitting what we don’t know, and seeking professional help. For example, a lot of business owners find it onerous, your job never stops when you get home, and your worries and anxiety don’t disappear when you shut your eyes at night. It often interferes with other aspects of your life.
The stress associated with business ownership, managing money and your staff, can take a heavy toll on your mental health. That is when a lot of people call it quits. Eventually they realise the profit they are earning is not even more than the decent salary they would get from a full-time employment. Not to mention, the negative impact on their mental health, physical health, their families etc. That is when some people start to realise the soft skills they are lacking might be the potential solution to continue to follow their dreams.
Let’s be honest, life is full of struggles, every path we choose will have its pros and cons. If a business owner can:
- Realise the ability or skills to prioritise and better manage time,
- Brush up on communication and interpersonal skills to build a happy and effective team, and
- Have the willingness to talk strategy with professionals to be steps ahead for the business,
all these areas will gap the bridge, solving the problem in the end.
Like anything in life, there is no absolute winning or losing, it is always about the journey. Enjoying the roller coaster ride, or should we say, the ultimate expanding learning experience, is the key altitude in making the best of proudly and successfully owning a business.