Emotional Capital: Why it Matters

by Lachlan Cunningham

At ISC, many people often ask us about Emotional Capital and why it’s such an important ingredient to the everyday success of elite sportspeople, whether they be coaches or administrators. We thought we would give you some detailed insight about why Emotional Capital matters, how you build it, and how it delivers results.

What is Emotional Capital?

Today we’re working with a new balance sheet. Knowledge, or intellectual capital has been and is the highly valued stock in most businesses. It’s what businesses know and use to create products or solve problems and ultimately create wealth. Yet knowledge is only the first of two important assets in business.

The second is emotional capital – the feelings, beliefs, perceptions and values that people hold when they engage with any business. It’s the emotional assets in your organization that determine whether or not people will work well for you, buy from you, employ you and enter into business with you.

Why Emotional Capital Matters

First, emotional capital is valuable because it creates strong relationships that enable people to achieve effective collective outcomes. Research shows that the key factors driving job satisfaction are relationships with managers, company culture, advancement opportunities, and opportunities to work with others. Employees are simply more and more unwilling to stay in an unhappy work environment. Therefore, leaders who create cultures of passionate people maximize the productive potential of the human capital in the business.

Second, everybody knows that attracting and retaining talented people is the most important strategic issue for every company today and tomorrow. The most competitive market of the future is the labor market. To attract the most talented people, companies and organizations must focus on building exceptional workplace cultures where passionate people can innovate and drive change.

How Do You Build Emotional Capital?

In the last ten years, the most sensational strategy for building emotional capital has been to focus on developing emotional intelligence. Emotional intelligence is an indispensable set of social and emotional competencies for leveraging knowledge and emotions to drive positive change and business success.

Emotional Capital Report (ECR)

There are many ways of gaining feedback on performance, but by far the most credible and compelling way is to benchmark emotional and social competencies and provide feedback using high-quality psychometric assessment tools. Comparing our skills against a well-established benchmark of peer performance clarifies where we currently stand and has the effect of engaging our internal drive to improve.

Rigorous scientific research has identified ten emotional skills that drive leadership performance and separate great leaders from the rest. These ten skills can now be accurately measured by the Emotional Capital Report (ECR)– the world’s first scientifically developed psychometric for measuring emotional intelligence and leadership. The ECR™ offers a unique assessment of the components of emotional intelligence that are empirically linked to leadership performance and provides a wealth of coaching strategies tailored to each individual’s development needs.

Emotional Capital Delivers Results

A large telecommunications client who recently completed an emotional intelligence training program reported a 19% improvement in leadership performance, a 6% improvement in employee engagement, and a 6% improvement in customer focus scores in six months.

We believe that the primary role of leadership is create emotional wealth for competitive advantage. It’s knowledge and talent driven by emotional skills that are the foundation for growing an exceptional business today. Nothing in business is more rewarding or exciting!

Learn more about ISC’s Emotional Capital testing program here