The Most Undervalued Predictor of Success
In this column, authors comment on economic and financial topics.
Emotional intelligence is defined as the ability to recognise, understand and manage our own emotions, while skilfully perceiving and influencing the emotions of others.
To understand why EQ is so important in high-pressure environments, we need to consider what happens in our brains when we are stressed. The amygdala, which acts as the brain's alarm system, can trigger a stress response faster than the prefrontal cortex, which is responsible for strategic thinking, can evaluate a situation rationally.
Emotional Hijacking
This process happens in milliseconds. During moments where much is at stake, clear thinking matter most, yet it is precisely at such times that our cognitive capacity is reduced unless we are trained otherwise.
In a hijacked state, we experience impaired focus, increased emotional reactivity, compromised judgement, and heightened reward-seeking. None of these traits are conducive to top performance or productive collaboration.
«Self-awareness is not about eliminating emotions; it's about recognizing them as valuable data.»
Research consistently shows that people with average IQs outperform those with high IQs 70% of the time. EQ is the critical differentiator here, accounting for 58% of performance across all job types. EQ is not just about being nice or emotionally aware; it's about understanding the critical competencies required for managing volatile markets and demanding clients, as well as working effectively across hierarchies, cultures, functions, and stakeholders.
Self-Awareness: The Foundation
Before you can manage your emotions, you must recognize them. This means understanding your triggers, values, and stress responses. Suppressing an emotion takes more energy than expressing it, so self-awareness is not about eliminating emotions; it's about recognizing them as valuable data, as «energy in motion.» Tightness in the chest or queasiness before a big presentation, for example, are symptoms related to the activation of our sympathetic nervous system. These symptoms let us know that something new is happening, that something big is at stake, or that risks are inherent. Whether we label these feelings as «fear» or «excitement» stems from our beliefs, interpretations, assumptions, experiences and judgments, usually a story linked to the past or fear of the future, which is often not related to the actual situation. Our thoughts are – in fact – not facts.
The simple act of emotional labeling deactivates the activity of the amygdala, a part of the emotional brain, and shifts activity to the prefrontal cortex, the thinking brain. Deeper work requires us to get to truly get to know ourselves: why we are who we are today and which neural programming (beliefs, cognitive distortions, perspectives, mindest, etc.), generally established between three months before birth through age seven, is running the show automatically 95% of the time. We need to bring our brain «online» through conscious reflection and thought.
Leveraging Daniel Goleman’s model, EQ rests on 12 competencies across four areas: a view of self and social in terms of awareness and management.
Self-Management: Emotional Regulation
Once you are aware of your state, the next challenge is to manage it effectively in order to stay present, balanced, and clear, and maintain peak cognitive function under pressure.
The fastest way to create space between a trigger and a reaction is to control your breathing. Slowing our breathing and extending the exhale directly stimulates the vagus nerve, activating our parasympathetic nervous system (also known as the rest-and-digest system) within 30–90 seconds. This shifts us from fight-or-flight mode to a state where strategic thinking is possible.
Self-management especially requires understanding Stephen Covey's circle of control, or as I call it, our circle of responsibility. We must focus our energy and attention on what we can actually influence and control: our preparation, commitment, thoughts, tone, attitude, habits, choices, actions, rest - not market volatility, client reactions, the weather, social media and other people’s opinion. This shift alone reduces stress and increases our sense of agency.
Social Awareness: Reading The Room
Ultimately everything is about relationships, whether with clients, colleagues, or business partners. Social awareness involves accurately perceiving other’s emotions and understanding group dynamics. It means recognizing when a client's aggressive question stems from fear rather than dissatisfaction, or when team tension is affecting the quality of decisions. which can be developed through perspective-taking, active listening, and, most importantly, recognizing that not everything is about us. A difference in opinion is just that – not a personal attack. A frown may be a thought about a sick child or elderly parent, not annoyance with you. Before assuming, ask. Social awareness also requires understanding that emotions are contagious. Your openness can inspire innovation and productivity, while your anxiety can freeze the room into fearful silence.
Relationship Management: The Multiplier Effect
The highest level of EQ involves using your awareness of your own and others' emotions to manage interactions successfully. Google's Project Aristotle, which studied what makes teams successful, found that psychological safety (Amy Edmonson: «a belief that one will not be punished or humiliated for speaking up with ideas, questions, concerns, or mistakes») was the single most important factor in high-performing teams. Creating this safety requires relationship management skills that go far beyond technical expertise. Whether you hold the function of a leader or not, you must influence, coach, mentor and inspire, work in teams and manage conflict. You not only read the room, you adapt your communication style to the audience, create connection through empathy and ensure clear, non-defensive language.
«The question is no longer whether we can afford to develop our emotional intelligence, but rather, whether we can afford not to.»
Our Brain is The CEO of Our Entire Being
EQ, unlike IQ which is more or less fixed at birth, can be developed with deliberate practice through neuroplasticity, the brain’s ability to form new neural pathways. This development requires the same commitment as building physical fitness: consistent daily practice with the right techniques:
- Get to know yourself: What are your top five values, and how do they manifest in your life? What emotions have you experienced, and where in your body have you felt them? What triggered them? How did these emotions influence my decisions?
- Prepare: Our brain cannot tell the difference between what’s real and what’s imagined. Use visualization techniques to prepare for high-stakes situations and challenging conversations.
- Listen to understand, not to answer: Summarize, paraphrase, reiterate, acknowledge, and clarify.
In a world where stress and triggers are the norm, we must actively manage our emotional brain to prevent it from overpowering our unique human abilities: thinking, making decisions, regulating emotions and social behavior, managing impulses, and pursuing goals. The question is no longer whether we can afford to develop our emotional intelligence (EQ), but rather, whether we can afford not to. Our brain is the CEO of our entire being. If the CEO is not fit, the entire organization suffers. Enhancing our EQ enables us to thrive, not just survive.
Patricia Ordody is a senior corporate professional, coach & advisor with two decades of experience in banking. As Team Head at a leading private bank and founder of Health is Wealth in Zurich, she combines her corporate expertise with holistic leadership, transformation and health strategies. Furthermore, she champions mental health awareness through articles, impulse presentations, panel discussions, and workshops about EQ, mental fitness, resilience, stress management and empowerment.
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