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.
A strong business leader will react to the headwinds 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 an SME leader – emotional intelligence. Without it, leaders are unaware 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 a successful, long-term customer relationship and should be at the forefront of every leader’s thoughts.
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 for the 90 minutes you’re talking. If that sounds 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 instead 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. Just look at David Brent from The Office, who is the perfect example of a leader without emotional intelligence. When tasked with telling the workforce redundancies are being made he makes it about himself, with the bad news being those who stay will have to relocate. The good news? He’s getting a promotion. It went badly.
The most successful SME leaders will have an acute awareness of what motivates their workforce and how their actions impact colleagues. Something as simple as running a regular satisfaction survey can prove invaluable, giving direct insight into what’s working and what can be improved. It’s the ability to act on this data which truly sets leaders apart however.
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. I believe this is key, as people who embrace the culture will continue to progress and by running knowledge sharing sessions, the learnings of one person soon equates to a more well-rounded team.
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.
Whether in an external or internal setting, emotional intelligence is the most important skill an SME leader can have. No leader can afford to take 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.
John Lightfoot is head of relationship management and client service at Ultimate Finance
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