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Leading with emotional intelligence in an increasingly AI-driven world: How to successfully navigate business change

Photographic portrait of Peter Whealy
Peter Whealy

Partner, People Advisory Services | EY Switzerland

3 minute read 20 Oct 2023

In an increasingly AI-driven world, leaders are required to navigate business change and drive success at speed. EY research provides clear evidence of the importance of emotional intelligence for not only leading but delivering successful transformations.

In brief:

  • EY research emphasizes the critical role of emotional intelligence (EQ) in successful organizational transformations.
  • We found key drivers are linked to the emotional journey during a transformation.
  • EQ is a powerful compass to guide the organization in the future as AI accelerates the pace of change.
  • Leading with EQ and the right mentality and capabilities provides the foundation for employees to navigate the emotional journey throughout the transformation life cycle.

Leading with emotional intelligence in an increasingly AI-driven world: How to successfully navigate business change

In an increasingly AI-driven world, leaders are required to navigate business change and drive success at speed. EY research provides clear evidence of the importance of emotional intelligence for not only leading but delivering successful transformations.

In our rapidly evolving business landscape, organizations frequently navigate complex transformations. These initiatives often involve significant changes that disrupt the status quo and, consequently, leaders and employees ride an emotional rollercoaster with highs and lows throughout the change life cycle. In turbulent times, it becomes increasingly crucial for leaders to not only possess the relevant technical capabilities, but also the EQ necessary to lead and inspire effectively.

EQ is the ability to understand and manage one’s own emotions and effectively navigate interpersonal relationships. While deep technical skills and IQ are clearly critical, it is EQ that can make the difference between a leader who merely manages and one who inspires and therefore successfully guides people through long-term transformation. Through EY’s research, we know that leaders who leverage EQ will significantly increase an organization’s chances of transformation success.

EQ as a crucial leadership skillset

Many leaders have the tendency to over-use rational and logic-based decision-making to guide a project or team. However, if they don't tap into and develop their emotional intelligence, they risk being blind to the emotional challenges their teams face on a daily basis. This oversight can have detrimental long-term effects, but it is especially damaging during periods of change where emotions run high and sustaining motivation and positivity is critical.

During long term transformations, our research shows teams initially experience excitement and enthusiasm. However, this enthusiasm can wane, leading to anxiety, uncertainty, and resistance. Emotions are rarely measured and often referred to as ‘soft’ and therefore less important, but through our research, we can track how this emotional rollercoaster can be a significant impediment to success if it is not addressed effectively.

Effective leaders understand the dynamics of these emotions and use their EQ to connect in the right way with the right information at the right time. They create an environment where employees feel heard, understood and supported, even when facing uncertainty and stress. Leaders who manage this journey effectively can reverse a potential downward spiral and elevate the success curve of their transformation.

Leaders should leverage the following EQ layers to drive transformational success:

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How EY can help

AI's impact on leadership and the growing importance of EQ

Particularly since ChatGPT’s launch in November 2022, we are seeing exponential growth in the use and number of business applications for AI. Leaders are increasingly coming to terms with the current and future impact of AI both on their roles and the transformation projects that they lead. With AI now not only automating routine tasks, but also many parts of core job roles, we must question everything and therefore adapt rapidly to a new reality. The benefit of having more time for strategic decision-making and human interaction is clear, but we must double down on the things that AI cannot yet help us with, and that is EQ capabilities and skills.

 

EQ brings the human touch to leadership through empathy, understanding, and effective communication. As AI continues to reshape the workplace, leaders with high EQ are better positioned to harness the technology's capabilities while ensuring that their teams feel supported and understood during periods of change. Emotional intelligence therefore will complement AI, creating a powerful combination that enables leaders to thrive in the face of AI-driven automation while fostering a culture of engagement, feedback, and collaboration.

 

Conclusion

Fortunately, EQ is not a fixed trait: it can be cultivated and developed through training and self-awareness. Our first priority should be to enhance our EQ, to cultivate self-awareness, practice self-regulation, stay genuinely motivated, empathize with others, and excel in social skills. Then, to complement these skills, we must leverage our IQ and technical skills, and then finally embrace the AI advancements through all areas of our transformations, teams and organizations.

 

These combined competencies and qualities, presented with a clear vision, a culture of engagement, feedback, and collaboration, will form the foundation for effective leadership and will allow leaders to better navigate the emotional rollercoaster of transformations.

Summary

EQ should become the compass to guide leaders through the complexities of change. With it, they can create a holistic leadership approach that inspires and empowers teams to achieve transformation success. Despite a future of AI advancements and a future we do not yet fully understand, we know that EQ will become even more critical and will separate exceptional leaders from the rest.

The good thing is we all have the ability to learn and develop ourselves as leaders with EQ and understanding, and this will help us navigate and succeed in an increasingly automated world.

Acknowledgments

We would like to thank Catalina Rozmarin for her valuable contributions to this article.

About this article

Photographic portrait of Peter Whealy
Peter Whealy
Partner, People Advisory Services | EY Switzerland
Peter’s focus is learning strategy and implementation, emphasizing design on solutions that improve behavior, mindset and long-term performance. In his spare time, he likes triathlon, skiing, cycling.
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    EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Limited, each of which is a separate legal entity. Ernst & Young Limited is a Swiss company with registered seats in Switzerland providing services to clients in Switzerland.