For years, organizations treated Emotional Intelligence as a desirable “soft skill” that is useful for building relationships, managing difficult conversations and improving teamwork. That view is changing rapidly.
Progressive organizations increasingly see Emotional Intelligence as a business capability because business today is conducted through human relationships: leaders influencing people, teams solving problems together, managers handling pressure, employees navigating change and organizations asking people to perform in increasingly uncertain environments.
Strategy may determine where an organization wants to go. Emotional intelligence often determines whether people will travel there together.
EI has become a business asset
Emotional Intelligence is fundamentally about four capabilities: understanding oneself, managing one’s emotions, understanding others and managing relationships effectively. These capabilities become commercially important when translated into leadership behaviour.
Consider two technically competent leaders facing an underperforming team. One reacts defensively, pressures people, dismisses concerns and creates fear around mistakes. The other remains composed, diagnoses what is happening, listens without lowering performance expectations and creates accountability without damaging trust. Both leaders may understand the business equally well. Their teams, however, can produce very different results.
Research supports this connection. A large meta-analysis covering approximately 30 years of EI research found positive relationships between Emotional Intelligence and job performance. These are meaningful relationships in organizational behaviour. They suggest that EI should not be dismissed as personality polish. It has measurable connections with how effectively people perform and cope with workplace pressure.
The manager is where EI becomes economics
One of the strongest reasons organizations invest in leaders’ EI is the multiplier effect of managerial behaviour. A manager’s emotional state rarely remains personal. An anxious leader can create an anxious team. An emotionally volatile leader can make people defensive. A leader who cannot receive disagreement eventually creates silence. Conversely, emotionally intelligent leaders can create conditions where people speak honestly, recover from setbacks, challenge assumptions and take responsibility.
Gallup has found that management accounts for approximately 70% of the variance in team engagement. That statistic deserves attention because engagement connects directly with business outcomes. Gallup’s latest large-scale meta-analysis reports that highly engaged business units, compared with low-engagement units, show 23% higher profitability, 18% higher sales productivity, 10% higher customer loyalty and 32% fewer quality defects.
This does not mean EI alone creates 23% higher profits. The relationship is more sophisticated. EI influences leadership behaviour. Leadership behaviour influences employee experience. Employee experience influences discretionary effort, collaboration, retention, customer behaviour and execution. Those factors influence business performance. That is the economic chain progressive organizations increasingly understand.
Growth creates emotional complexity
Organizations often discover the importance of EI precisely when they begin growing rapidly. Growth means restructuring, ambitious targets, new leaders, different generations working together, competing priorities, greater interdependence and constant conversations around performance.
Technical competence tells managers what decisions may be required. Emotional Intelligence helps them decide how to carry people through those decisions. This becomes even more critical during transformation. People rarely resist spreadsheets. They resist what change makes them feel—uncertain, threatened, ignored, undervalued or powerless.
Emotionally intelligent leaders can acknowledge those reactions without surrendering business requirements. Empathy is not lowering standards. It is understanding people well enough to raise standards intelligently.
EI training matters even more in the age of AI
As technology becomes more sophisticated, human differentiation increasingly shifts toward capabilities technology cannot simply replace: judgement, trust, influence, empathy, conflict navigation and emotionally intelligent decision-making. This is particularly important now. Gallup’s 2026 workplace research estimates that low employee engagement cost the global economy approximately $10 trillion in lost productivity—around 9% of global GDP. Manager engagement globally had fallen to just 22% in 2025.
Organizations therefore cannot afford managers who are technically capable but emotionally depleted, disconnected or unable to mobilize people. The future leader will need both digital intelligence and emotional intelligence.
The encouraging news: EI can be developed
Perhaps the strongest argument for investing in EI is that it is developable.
A 2024 systematic review and meta-analysis of workplace emotional-competency interventions examined 50 studies, including 27 controlled trials. The controlled studies produced an overall training effect size of approximately 0.51, considered a moderate effect. Progressive organizations have recognized that it is now imperative to train managers and leaders in building emotional intelligence.
But development requires more than conducting a two-day workshop. Effective EI development combines assessment, feedback, reflection, behavioural experimentation, coaching, workplace application and repeated practice. Leaders need opportunities to recognize their triggers, examine their impact on others and consciously practise different responses.
This is why progressive organizations do not treat EI as an event. They treat it as leadership infrastructure. Organizations ultimately grow through decisions, relationships, conversations and execution. Every one of these contains an emotional component.
The question for organizations, therefore, is no longer simply, “Should we develop Emotional Intelligence?” The more commercially relevant question is: “What is the business cost of leaders who never develop it?”
This blog has been written by the Leadership Development Practice team at GrowthSqapes.