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In 2024, Forbes called out emotional intelligence (EI/EQ) as the #1 leadership skill of the year, and based on a quote from Inc.com, 2025 is shaping up to be more of the same:

“If you could improve just one skill in 2025, what should it be??Ask Richard Branson, Jeff Bezos, and a bunch of psychologists this question, and they’re all likely to give you the same answer: emotional intelligence.”

So, what’s all the hype about? Well, emotional intelligence is key to effective leadership. Research from O.C. Tanner shows that leaders and organizations with high EQ benefit in several ways:

• Employee burnout decreases by 90%
• Employees’ sense of well-being improves by 120%
• Employees’ sense of appreciation improves by 921%?

Yes, you read that right—employee appreciation skyrockets when organizations and leaders exhibit high levels of emotional intelligence. And as you can imagine, that boost helps in other areas (such as employee engagement and productivity) as well.?

Ahead, we’re taking a deep dive into the connection between emotional intelligence and effective leadership. We’ll discuss the impact of emotionally intelligent leaders on organizational outcomes, as well as what happens when people in positions of power lack EQ, and how you can best develop this skill.?

How Emotionally Intelligent Leaders Shape Stronger Organizations

Over ten years ago, psychologist Daniel Goleman, who brought emotional intelligence into the mainstream, told Harvard Business Review:

“The most effective leaders are all alike in one crucial way: They all have a high degree of what has come to be known as emotional intelligence. It’s not that IQ and technical skills are irrelevant. They do matter, but… they are the entry-level requirements for executive positions.”?

In other words, technical acumen may get someone in the door, but it’s emotional intelligence that sets transformative leaders apart.

Data continues to back this up: 71% of employers say they value emotional intelligence more than technical skills when evaluating candidates. Why? Emotionally intelligent leaders create environments where people want to stay, grow, and contribute.

Consider this: Managers with high EQ retain 70% of their employees for five years or more, and their teams report feeling more inspired and engaged at work. The ability to manage emotions, empathize, and communicate with clarity directly impacts team morale.

Further research confirms just how far that impact reaches. A report in the Journal of World Business analyzed more than 6,300 leader-follower relationships, revealing that:

• Employees with high-EQ leaders perform better and report higher job satisfaction.
• They’re also more likely to go above and beyond, demonstrating traits like courtesy, conscientiousness, and civic responsibility.
• They recognize the value of EQ in leadership across cultures and industries, underscoring its universal relevance.

At a time when workplace dynamics are evolving faster than ever, emotional intelligence is a strategic advantage. The most effective leaders don’t just manage teams; they build cultures of trust, accountability, and sustained performance. That starts with EQ.

What Happens When Emotional Intelligence Is Missing at the Top?

If emotional intelligence drives performance, then its absence can just as powerfully stall progress. A lack of emotional intelligence within leadership isn’t a neutral trait—it’s an organizational liability.

Leaders with low EQ often struggle to manage their own emotions, let alone navigate the interpersonal dynamics of a team. They may dismiss concerns instead of acknowledging them, default to defensiveness in moments of feedback, or sidestep difficult conversations that require empathy and nuance. Over time, these patterns erode trust, and the effects ripple outward.

Workplace conflict and miscommunication are often rooted in this emotional disconnect. When leaders lack the ability to recognize or respond to the emotional cues of others, tensions go unresolved, collaboration suffers, and teams fracture. Even seemingly minor behaviors (frequent blame-shifting, reactive communication, emotional outbursts) signal a deeper issue: an inability to lead with awareness and emotional regulation.

According to O.C. Tanner, when employees perceive their leaders as low in emotional intelligence:

• Their sense of well-being drops by 43%
• Their sense of appreciation falls by 42%

That kind of emotional disengagement translates to increased turnover, decreased productivity, and widespread employee burnout. People stop raising their hands, stop offering ideas, and start looking elsewhere.

The stakes get even higher in moments of transition or disruption. In a recent survey of people managers conducted by LHH:

• 44% said EQ is most important when leading teams through change
• 37% cited it as crucial when addressing employees’ personal issues
• 31% leaned on it when giving feedback or conducting performance reviews

To sum it all up, emotionally intelligent leaders are able to hold space for hard conversations while maintaining clarity and composure. They know when to step in, when to listen, and how to make people feel seen. And in doing so, they create cultures that don’t just retain talent—they develop it.

Emotional Intelligence Can Be Cultivated, and It Starts with Leadership

One of the most encouraging truths about emotional intelligence is that it’s highly trainable. As Daniel Goleman puts it:

“Unlike IQ, which changes little after our teen years, emotional intelligence seems to be largely learned, and it continues to develop as we go through life and learn from our experiences.”

While EQ is learnable, it’s often overlooked. A recent LHH survey of 500 people managers revealed that 68% of organizations have no formal tools in place to identify, develop, or leverage EQ, and only 42% offer specific training to cultivate it.

This represents a major missed opportunity. If leaders want to create resilient, high-performing teams, they need to lead by example—and that begins with their own self-awareness, emotional agility, and interpersonal effectiveness.

Let’s look at the four core components of emotional intelligence in leadership and how you can start building each one.

Self-Awareness

Self-awareness is the foundation of emotional intelligence. It’s the ability to recognize your emotions, understand their impact, and know how they influence your thoughts and behaviors. Research from organizational psychologist Tasha Eurich states that 95% of people think they’re self-aware, but only 10% to 15% actually are.

To develop self-awareness:

• Practice naming your emotions without judging them.
• Journal regularly to reflect on emotional triggers and reactions.
• Ask for honest feedback from people you trust—and take it seriously.
• Pay attention to how your mood influences others in meetings or conversations.

Self-Management

Once you’re aware of your emotions, self-management is about responding to them in intentional, productive ways—especially under stress.

To develop self-management:

• Pause before reacting. Count to ten or take deep breaths to create space.
• Reframe negative self-talk into a more constructive internal dialogue.
• Use visualization techniques to prepare for emotionally charged situations.
• Prioritize sleep and mental recovery to stay emotionally regulated.

Social Awareness

Social awareness is the ability to read a room, notice body language, and understand the emotional dynamics at play in group settings.

To develop social awareness:

• Practice deep listening—don’t just hear, strive to understand.
• Observe nonverbal cues like tone, posture, and eye contact.
• Learn the cultural and emotional norms of your team or organization.
• Ask open-ended questions to gain perspective, not just information.

Relationship Management

The ultimate test of emotional intelligence lies in how we manage relationships—whether that’s motivating a team, giving feedback, resolving conflict, or creating psychological safety.

To develop relationship management:

• Address conflict directly, but respectfully.
• Align your tone and body language with your message.
• Build trust by being transparent and following through on commitments.
• Take time to understand what matters to others, not just what needs to get done.

Closing the Emotional Intelligence Gap

Despite its importance, emotional intelligence in leadership remains underdeveloped in most organizations. In fact, research from Korn Ferry found that only 22% of leaders demonstrate strong emotional intelligence.

That gap presents a real challenge, but also a major opportunity. With the right support, leaders can deepen their emotional insight, build more authentic relationships, and lead with greater purpose and presence.

At Co-Active, we’ve seen how coach training can spark this kind of transformation. By creating space for honest reflection, skill-building, and growth, the Co-Active Framework helps leaders turn emotional intelligence from an abstract concept into a daily practice—and a powerful leadership advantage.

Interested in experiencing it for yourself? Explore Coach Training Pathways