By John Lightfoot, Head of Relationship Management & Client Service at Ultimate Finance
British small businesses all face the same headwinds and in many ways, it can be argued they are turning into a full-blown storm. Barclays’ annual ‘SME Hopes and Fears’ report found rising inflation and cybercrime are two of the biggest worries for small businesses this year, while the introduction of GDPR will currently be causing headaches across the country.
While the natural reaction for some may be trying in vain to not pull their hair out in frustration, a strong business leader will react effectively to find a solution, rather than buckling under the pressure. This is made possible by what I believe is THE most critical component of a small business leader – emotional intelligence. Without it, leaders may be completely unaware of how their words or actions impact their workforce and customers, which can prove hugely detrimental to a business.
So how can SME leaders transform their business by embracing emotional intelligence?
- Driving customer relationships
Emotional intelligence is made up of five key areas: self-awareness, emotional control, self-motivation, empathy and relationship skills. Each of these elements is key to successful, long-term customer relationships.
Take face-to-face meetings for example. The standard approach is to produce an agenda, share it with customers in advance and stick to it rigidly – sound familiar? Ask yourself what value you’re adding to that customer during the meeting. How much would they be willing to pay you for that visit if you were paid per visit? Not a lot.
An emotionally intelligent leader will focus on meetings which aim to solve issues the customer is struggling with. If you can leave a meeting having resolved one or two of their key problems, not only will the customer be in a better position, but the relationship will have been improved too. The next time they have an issue, it will be you they turn to. That’s true added value thanks to emotional intelligence.
- Transforming the office
It’s not just customer relationships which can be transformed with emotional intelligence – it can have a vast impact on a business internally too. Take David Brent from ‘The Office’ potentially the perfect example of a business leader without an ounce of emotional intelligence. When tasked with telling the workforce redundancies are being made he makes it about himself, telling them that the bad news is there will be job losses and those who stay will have to relocate. The good news? He’s getting a promotion. Unsurprisingly, it went badly.
The most successful leaders will have an acute awareness of what motivates their workforce and how their actions impact colleagues. For example, if career progression is a key motivator for staff, building a learning culture is a clear way to show you respect the wants and needs of the workforce. People benefit on a personal level and will quickly become more loyal as a result. The team will become more close-knit, productivity will increase and the company will grow – strong relationships lead to strong businesses.
- Embracing emotions
Whether in an external or internal setting, emotional intelligence is the most important skill a small business leader can have. No leader can afford a “one size fits all” approach to management, when the working environment and customer-base are as diverse as ever. Failing to recognise the differences between how different people can react to circumstances can be the difference between success and failure in the long run, whether it’s an angry customer or an employee leaving due to what they feel is unfair treatment. Such issues will be diminished by embracing emotional intelligence, the skill that really sets leaders and their businesses apart from the competition.