Emotional intelligence is a term that is constantly popping up in business conversation, especially when talking about the skills needed to succeed and become a good leader. By now, most people probably agree that IQ, technical and theoretical skills won’t cut it in today’s competitive business landscape. In fact, studies have found that people with average IQs outperform those with the highest IQs 70% of the time. To secure career longevity and develop into a great leader, a set of soft-skills – or what has come to be known as “emotional intelligence” – is needed.

But what exactly is emotional intelligence? Simply put, it is the ability to identify and manage your emotions as well as the emotions of others. As a leader, it is particularly important to possess a high level of emotional intelligence. Why? It enables you to better understand your employees and clients — the old-school philosophy of management by intimidation doesn’t work anymore. Today’s ever-changing business landscape requires workplaces that model teamwork, open communication and mutual respect between colleagues, leaders and employees.

Failing to recognize, or at least try to understand, other people’s emotions can have devastating consequences in the long run. As a leader you should develop components of emotional intelligence such as self-awareness, self-regulation, motivation, empathy and social skills, as these abilities can help you better motivate your employees, solve problems more effectively, reduce misunderstanding and conflict, and help build more cohesive teams. After all, a leader’s mood and actions drive the moods and actions of the employees.

Analyzing the emotional intelligence of future and current employees can be a great tool for determining leadership strategy and also help mold the future C-suite. In my opinion, all organizations should consider establishing some sort of emotional intelligence training as it can help both current and future leaders build stronger skills, fostering the ability to see things from other people’s point of view; recognize and understand personal emotions; consider the causes of other people’s emotions, prevent hasty and irrational decision-making; distinguish between thoughts and feelings; and take responsibility for individual feelings and actions.

It is evident that emotional intelligence is vital for the wellbeing of an organization. A ruthless executive who lacks emotional intelligence will most likely create a toxic environment where employees are negative and filled with resentment, preventing them from grasping opportunities and achieving success. An inspirational, respectful and inclusive leader who understands his or her employees on the other hand, creates a harmonious workplace where employees care about their work, feel trusted and inspired to learn. This significant influence that emotional intelligence plays on company culture is the exact reason every company should make it an important part of their overall business strategy.

Championing the components of emotional intelligence, both in your inward and outward business strategy and making sure you truly understand your customers, colleagues and employees might be the final pieces of the puzzle – ultimately helping your company achieve its financial and higher business goals.