Tight margins, decreased profitability, increased stress, labour shortages, and supply chain disruptions – these are just some of the issues that business owners have reported on in our latest Pulse Check. And while there’s no doubt that the dial on these has been turned up over the past eighteen months – these pressures are likely to exist after we get back to ‘normal’ (whatever that might look like). So how do you deal with them?
I feel like a lot of what we’ve been seeing over the past eighteen months have been reactive responses to these issues – but in order to enable long-term growth, businesses now need to start thinking about how to be more proactive about these issues moving forward. Those that take a step back and try to think differently about these issues, and are creating strategies to deal with them moving forward will be better positioned than those who don’t.
Easier said than done though! As business owners, we have the tendency to spend too much time working ‘in’’ the business – particularly during tough times like through COVID – rather than working ‘on’ the business.
And, without getting into the political side of things too much, here in Auckland there seems to be a growing consensus that not enough is being done to support our SME community – both from a financial and wellbeing perspective – despite restrictions continuing (if you feel differently though, I’d love to hear your thoughts!).
With all of this, it’s easy to understand why business owners are feeling stressed, anxious, and having sleepless nights.
Now, you might be wondering why I’ve titled this post “why EQ is more important than ever”, and what any of that has to do with what I’ve just spoken about above.
Recent research has shown that, despite trending upwards prior to 2020, there’s been a rather worrying downward trend in EQ over the past year – despite research suggesting that it is even more important than IQ for predicting business success, particularly during times of uncertainty (i.e. a pandemic).
It’s fair to say that EQ has a bit of a ‘soft’ reputation, that it is only about being nice and empathetic to other people – but while empathy certainly is a key component of EQ, it’s actually about being smart with our emotions.
While eight measurable and, importantly, learnable EQ capabilities have been defined, only one has increased over the past year – consequential thinking (i.e. the ability to evaluate the associated risks and benefits of our options).
And while this is typically a useful skill to have, it can also lead to increased risk aversion from business owners – which, consequently, makes it harder to be proactive about solving for some of the struggles they’re facing.
For SMEs, one of the most crucial EQ capabilities to focus on is optimism. Not the kind of optimism that sees us holding hands and dancing round in a circle – but the kind that shifts our thinking to be future-focused, “what are my options?” or “what is my best possible outcome?”.
Understandably, it’s been a struggle for many to tap into that optimistic mindset of late – but with things looking unlikely to change anytime soon, it’s vital that business owners adopt this mindset in order to drive their businesses forward.
There are significant opportunities to be had for those businesses who get ahead of the curve now and start thinking about solving for some of these challenges differently. Lifting up these pressures and planning for them strategically is imperative.
And it’s where optimism comes into play. By analysing and considering these challenges through the lens of “what are my options” and “what is my best possible outcome”, business owners can tap into these opportunities.
At The Alternative Board, a lot of our time is spent helping business owners strategically plan for their businesses – which means a lot of our time is spent adopting this optimistic mindset so we can try and determine the best path forward.
It means that even if you can’t tap into that mindset at the moment – which, believe me, is more than understandable – there’s a support network of peers behind you who can adopt it for you.