What’s Most Important for Entrepreneurial Success?

In a recent study, What Matters More for Entrepreneurship Success? (Allen et al, 2020) authors argue that GMA increases entrepreneurial alertness, providing an avenue for entrepreneurs to recognize and exploit opportunities effectively; however, EI helps entrepreneurs to make better decisions and build strong relationships for the long-term success.

General Mental Ability (GMA) is defined as a general information-processing capacity that enables reasoning, problem-solving, and other higher-order thinking skills (Gottfredson, 1997). This is often referred to as the Intelligent Quotient.

Emotional Intelligence (EI) is the capacity to monitors own and others’ emotions and use this information to understand and regulate one’s emotions and behavior, enabling more effective self-management and effective management of relationships with others (Goleman, 1995).

With over 40 different studies and sixty-five thousand observations, the authors concluded that EI plays a much larger role in the entrepreneur’s long-term success than GMA. While initial success often relies on sheer brainpower to imagine a new process or product to innovatively respond to a market need, the next stage of entrepreneurship requires sustained energy and emotional balance to build strong relationships within and outside the company.

Under extreme emotional stress, the study showed that entrepreneurs with higher EI were able to regulate their emotions, stay calm, collaborate with others, and make good decisions. However, individuals with low EI had difficulty managing their emotions, leading to suppressed use of their rational thoughts and cognition. They get into tunnel vision, get angry quickly, or withdraw when threatened, keeping them from forming positive connections.

The study also showed that GMA does not add to an individual’s resiliency, effort, and motivation; negatively impacting adaptive strategies in stressful times. “I am smart enough to get through these problems.” EI, on the other hand, enhances the entrepreneur’s ability to seek help and bond with others to get through uncertainty and stress, thereby, increasing the group’s resiliency and sense of purpose. When you get through something with people, everyone is stronger and more capable as a group. 

As we come to the end of an incredibly challenging year, it feels appropriate to pay attention to what this study has discovered. 

Do not assume that if people have high intelligence, they automatically know how to work with people in times of volatility and stress. 

Do take the time to learn to express emotions so that you can create safety for people to share their worries and concerns and feel heard and understood. And perhaps, share some of your own vulnerability and fears. Finally, as an entrepreneur, to keep people motivated and focused, be explicit about how much you care and how important they are to you and your company. 

Since innovation and entrepreneurship are often synonymous with individuals exhibiting high IQ and General Mental Ability, this study especially crucial as it explains the importance of emotional intelligence as the other key human capital to be present in successful entrepreneurial ventures. EI when combined with IQ, can produce exceptional results within the companies that can also withstand stress and volatility.

As an entrepreneur, whether you feel stuck or alone, improving your EI skills and engaging in emotional connection will help you and your team thrive. 

At EmC Leaders, we help entrepreneurs maintain their innovative drive through a proven process of emotional connection to help build durable relationships.

For more information, on our programs and services, please contact us at [email protected].

 

Allen, J.S., Stevenson, R.M., O’Boyle, E.H., Seilbert, S. (2020) What Matters More For Entrepreneurship Success? A Meta-Analysis Comparing General Mental Ability and Emotional Intelligence in Entrepreneurial, Strategic Entrepreneurship Journal, Wiley: New York, NY.

Gottfredson, L. S. (1997). Why g matters: The complexity of everyday life. Intelligence, 24(1), 79–132.

Goleman, D. (1995). Emotional Intelligence. New York, NY: Bantam Books.