Leadership in Small Businesses – Part 3 // Emotional Intelligence

Leadership in Small Businesses – Part 2 // Leadership Styles
April 9, 2019
Leadership Development in small businesses and beyond – a Brief Overview
April 23, 2019

Leadership in Small Businesses – Part 3 // Emotional Intelligence

There is a difference between a small business and a large business manager. Different skills are needed whether I start a new business or lead an established entity.

The rather “turbulent, competitive” external environment in an age of globalization requires the small business leader to advance skills, such as “empathy, self-awareness, cultural sensitivity, behavioral flexibility” (Yukl, 2013) and more. Given this statement and the previous observation that small business leaders tend to have high technical skills and to be more task-focused, it seems appropriate to examine the relevance of emotional intelligence for small business leaders.

High levels of emotional intelligence enhance leadership effectiveness by a higher capacity for problem-solving, time management, situational behavior adjustment, and crises management. The competencies of emotional intelligence include self-awareness, self-regulation, motivation, social awareness or empathy, and relationship management or social skills (Goleman, 2002; Yukl, 2013).

SELF-AWARE leaders understand their own emotions, they are aware of their values, their strengths and their weaknesses, and have self-confidence. They reflect on themselves and are open for feedback. Understanding themselves helps to improve and to let go of flaws that might hinder their business success. According to Leitch et al. (2009), small business leaders tend to be dominant, lacking both reflection and openness. Having no one to be accountable to might bear the risk of developing “blind spots”, such as, according to Goleman (1999), setting unrealistic goals, “relentless striving…, pushing others too hard”, micromanagement, and being “overly concerned with public image”. However, self-awareness is more likely to a create positive change of a leader’s performance (Goleman, 1999).

The second competency of an emotionally intelligent leader is SELF-MANAGEMENT which involves emotional self-control, transparency, and adaptability (Goleman, 2002). Leaders who can manage their emotions well, meaning to “channel them in useful ways”, stay calm under pressure and remain focused. They admit to misbehavior and do not let high demands get them overwhelmed. Considering the high pressure and demand on small business leaders in highly competitive markets and the dependence of their business on them (Bolden & Terry, 2000; Burns, 2016), it is crucial for the success of their business to manage themselves well.

Another component of emotional intelligence is MOTIVATION, the “emotional tendencies that guide or facilitate reaching goals” (Goleman, 1999). One’s achievement drive, commitment, initiative, and optimism determine the performance of a leader. The rather task-oriented behavior of small business leaders might imply their higher commitment to the business itself and possibly to customers instead of to their employees which constrains their leadership effectiveness (Goleman, 1999). And to stay optimistic despite setbacks is also essential for positive self-management.

While the first three competencies of an emotionally intelligent leader were focused on the leader, social awareness and social skills focus on the leader’s relationship management. SOCIAL AWARE leaders employ empathy to “sensing others’ feelings and perspectives” (Goleman, 1999), they look out for others instead of being egocentric and are service oriented to the people around them. They listen attentively and are able to detect why people behave in a certain way (Goleman, 2002).

These skills are crucial for the final competency, SOCIAL SKILLS, which include communication, conflict management, inspiration, leading change, and developing others (Goleman, 1999, 2002). They are fundamental for effective leadership that includes delegation, one of the main challenges of the small business leader, as mentioned in my previous blog. According to a study by Holloway and Schaefer (2014), “skills that allow sustainability beyond 5 years” in small enterprises are “collaboration and forms of communication, mentoring, as well as people skills and motivation”. Bolden and Terry’s (2000) study shows that small business leaders tend to rely “more on informal relationships than formal meetings and briefings” for effective communication. In summary, emotional intelligence is as essential for the small business leader to be effective in leadership as it is in larger organisations, it might just look different. The small business leader might have to look for a mentor outside of the organisation or establish an atmosphere where constructive feedback is appreciated from subordinates.

Since leadership is highly people-focused BEYOND Leadership Coaching highlights these intra- and inter-personal skills.

As it has been shown in various studies, leaders are both born AND made. Meaning, some people are naturally ‘good with people’ while others are not.

However, it is certainly possible to develop those leadership skills, it is just not enough to sit in a seminar or read a book about it. It needs to be applied, reflected on and then applied again etc.

Coaching offers the ideal support for this improvement. It requires courage and a teachable attitude to step into this sphere but it might determine the rise and fall of your leadership.

I’m here to help you go BEYOND in your leadership. If Emotional Intelligence is an area you would like to work on, please book a FREE 45-min Leadership Roadmap Session and find out which road to take from here.

Happy Tuesday again (or whenever you’re reading this)!



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