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Why you need EQ to unlock your IQ

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 / Reading time: 8 minutes

For a profession whose success depends on seeing something that others don’t, cultivating the habits that improve EQ should be in every investors’ toolkit.

After two decades working in and around the investments industry, I’ve witnessed the sharp intellect of successful investors and the pride they take in it. In this industry, IQ reigns supreme. But what about emotional intelligence (EQ)? That ability to recognise, understand, and manage your own emotions, as well as those around you. For many, it’s barely on the radar. Mostly due to an inability to detect the full range of emotions that are running us all the time.

Yet the truth is, to fully unleash your intellectual capacity, and the collective intelligence of your team, you need to develop the emotional maturity that comes from building emotional intelligence. Why? Because investing isn’t a solo game; it’s a team sport where collaboration, communication, and leadership are essential. Plus, emotions are running markets. If you can’t skilfully work with yours, you’re more likely to be hijacked by them. 

IQ will only take you so far

Impairing our IQ by failing to develop our EQ is one way we create "The Intelligence Trap," a concept explored by David Robson in his book of the same name. 

Robson argues that relying solely on IQ can lead to a dangerous kind of intellectual arrogance where we overestimate our abilities, dismiss the perspectives of others, and fail to recognise our own blind spots. The irony is that the very thing that makes us “smart” can also make us blind. We become so focused on processing information and getting it right that we overlook how much our decision-making is influenced by our ego, identity, biases, and interactions with others. 

Check your ego and unlock your and your team’s potential

The ego, in particular, can be a silent saboteur of EQ. Often used as a euphemism for arrogance, and therefore something other people have, truth is we all have an ego. Ego is essentially our identity, meaning how we view ourselves. The nature of the human condition and our tribal survival tendencies have conditioned humans to be sensitive to how we’re viewed by others. This approval seeking means feelings are generated when our ego or identity is triggered by positive or negative judgements by others or self-judgement. That’s why being skilful in EQ requires us to understand how our ego is almost always running the show.   

In a high-stakes environment like investing, where individuals are often rewarded for being the smartest person in the room, ego regularly disrupts team dynamics. When unchecked, it hinders collaboration and closes off opportunities for learning and growth. It's easy to become attached to being right or to holding onto ideas simply because they originated from us, rather than engaging in the critical thinking and open dialogue that truly benefits the team.   

But here's where EQ becomes the game-changer. When you intentionally practice EQ, you develop a self-reflection habit so you can recognise when your ego is getting in the way. It empowers you to see who or what you’re dismissing, talking over, or otherwise not including. You break the veil of self-deception and self-interest that we are all be blinded by to some degree.  

Why EQ is essential to building and levering diverse teams

Our Path to parity report found mediocre leadership and transactional team cultures are the biggest barriers to achieving gender parity. While incredibly rewarding, being a professional investor is a classic ‘greedy job’ that’s intellectually demanding, emotionally taxing and financially rewarding. For women who are primary carers and working in a heavily male dominated ecosystem (i.e. nearly all women working in investments) the greedy elements of the job are compounded by the structural and cultural barriers that being an outsider in the minority creates, making it harder to manage the intensity and succeed. 

By and large, women are up for that challenge because they also love the work. But if they don’t have a supportive, emotionally aware leader or if the team is transactional, dysfunctional or toxic (i.e. driven by ego threats), then it’s just not worth the upside, and they will leave.  

How to develop EQ

The good news is EQ can be developed. Here’s how: 

Intention and commitment  

Like any development goal, you must first want to become more self-aware and emotionally intelligent. Motivations will vary and for many the purpose may be more personal than professional. In addition to making wiser decisions and being a better leader and investor, improving your EQ supports all your relationships, including your relationship with yourself. So if your intellectual arrogance masks insecurity and anxiety, then practicing EQ will help you free yourself from those shackles.  

Personality and psychodynamic profiling 

Humans are fabulously predictable creatures, making personality and psychodynamic profiling eerily accurate and insightful. A good profiling tool will reveal how your fear-based emotions create self-limiting beliefs and habits aligned to your personality structure ie how your ego is running you. Once you know what to look for, you’re better able to manage the downside and downstream effects. In this endeavour we use the Enneagram. 

Developing emotional literacy and reasoning  

If you’ve been living and leading from the head up, then you probably struggle to label your emotions or understand where they come from. Here’s what you need to know.    

Emotions are almost always created by stories not facts, specifically stories we make up about facts. Facts are what a video camera would record and stories are labels, judgements, interpretations and assumptions. Feelings are felt in the body, and therefore need to be processed in the body. When you feel feelings fully by consciously moving them through your body, and investigate the stories that are triggering them, they move through fairly quickly and reveal incredible wisdom. If you don’t, they will drive a wedge in your relationships, disrupt your team dynamics, distort your reality and negatively impact your health – either a little or a lot. 

Now that’s a big claim! And the science on this is clear: “emotions constitute potent, pervasive, predictable, sometimes harmful and sometimes beneficial drivers of decision making.”  

That’s why EQ habits profoundly enhance our perspectival range and ability to grasp reality. For a profession whose success depends on seeing what others don’t, cultivating the habits that improve EQ should be in every investor’s toolkit. 

Identifying other’s emotional frequency 

Connecting with your own emotions makes it easy to then read others’, which is vital for being a leader who empowers people. You can’t sustainably inspire and motivate others if you can’t understand them. And you can’t understand them (or groups of people) if you can’t read their emotions (and the room). Every human craves to be seen and heard, and when we are, extraordinary levels of engagement, commitment, productivity and creativity are unleashed.  

Creating a common language 

Having this conversation across a team creates a shared language that builds trust-based cultures where everyone can do their best work. If you work with a bunch of really smart people, I can guarantee you their greatest growth edge is to develop their EQ. Just imagine what that could mean for your team or organisational culture. Game changing. 

Want to strengthen your EQ and elevate your team’s performance? Book a call with me today to discuss how we can help.

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