Next-Gen Development: The Role of Emotional and Cultural Intelligence

by Paolo Morosetti

The era when technical expertise and strategic acumen alone could ensure leadership success is long gone. In today’s interconnected business environment, next-generation leaders in family businesses expanding internationally must be more and more equipped to navigate cultural complexities, manage multinational teams, and build trust across borders.

To achieve this, they must master two often-overlooked yet essential skills: Emotional Intelligence (EQ) and Cultural Intelligence (CQ).

While EQ enables leaders to understand, regulate, and leverage emotions in business interactions, CQ determines how well they adapt to different cultural environments.

Why Emotional Intelligence Defines Leadership Success

The belief that emotional intelligence is merely a "soft skill" is outdated. Research consistently shows that EQ is a strong predictor of leadership effectiveness, with traits such as self-awareness, empathy, and social adaptability enabling leaders to build stronger relationships, resolve conflicts, and guide their organisations through uncertainty.

A leader with high EQ is better positioned to:

Inspire teams by understanding and responding to individual motivations.
Manage conflicts effectively by controlling emotional triggers and fostering collaboration.
Navigate crises with composure, helping organisations remain resilient under pressure.

Boardrooms and leadership development programmes are increasingly recognising that EQ is not a “nice-to-have” but a critical business imperative. When leaders fail to regulate their emotions or misunderstand those of others, they risk losing credibility, weakening team morale, and making poor decisions.

However, measuring EQ remains a challenge. While tools and tests exist, true emotional intelligence is best assessed through real-world leadership performance rather than psychometric scores.

Why EQ Matters Even More in Family Businesses

In family businesses, emotional intelligence is even more crucial. Unlike corporate settings, where leadership decisions are often business-driven, these type of businesses are characterized by additional layers of complexity —from navigating family dynamics to balancing personal relationships with professional responsibilities- which can be better tackles though an high EQ, not merely an high IQ.

Furthermore, family ownership brings a unique influence that shapes the company’s vision, purpose, and culture. Uncovering the ownership strategy and values is extremely important to be good leader of the business or the family and turn stakeholders in enthusiastic followers.

Why Cultural Intelligence Matters for Global Expansion

Emotional intelligence alone is not enough. A leader with high EQ but low Cultural Intelligence (CQ) may be effective within their own culture but struggle to build credibility in international markets or within multicultural organisations.

CQ measures a leader’s ability to:

Adapt to unfamiliar cultural contexts.
Interpret and respond appropriately to different business etiquettes.
Manage and motivate multicultural teams.

Given that 70% of cross-border ventures fail due to cultural misunderstandings, cultural intelligence is a non-negotiable skill for global leadership.

The three main Dimensions of Cultural Intelligence includes:

Cognitive CQ – An understanding of different cultural norms, values, and behaviours.
Motivational CQ – The willingness and confidence to engage across cultures.
Behavioural CQ – The ability to adjust leadership style, communication, and decision-making to fit different cultural contexts.

Leaders who fail to develop CQ often fall into the trap of assuming that what works in one culture will work in another. The history of multinational expansion is filled with failures caused by cultural misalignment.

The Problem with Leadership Development in Family Enterprises

Despite widespread agreement on the importance of EQ and CQ, still a few family businesses actively incorporate them into their leadership development frameworks, which are a relevant part a well planned succession process. When the family ownership invests in the future of their next generation, we observe that the initiative still remain overly focused on technical knowledge, financial acumen, and strategic problem-solving, quasi a neglecting the interpersonal and cultural adaptability needed in any family business, but even more in those who compete in international markets or that are owned by a medium and large families made of members coming from different cultures.

To ensure their next-generation leaders are equipped for international success or be part of international families, the leading generation either working in the business or engaged int he governance of the family could take the following steps:

Align Family Legacy with Global Business Realities – Family ownership should ensure that their legacy are adaptable allowing to marry tradition with innovation.
Create Immersive Cross-Cultural Experiences – Young family business leaders should be sent on international assignments early in their careers, allowing them to develop real adaptability rather than relying on theoretical knowledge. Education for families should included initiative to go beyond the national boundaries to live the differences among cultures and gain a sense of adaptability
Prioritise Emotional Intelligence Coaching – Next-gen development programmes should include personalised coaching focused on self-awareness, relationship management, and resilience.
Adopt a More Flexible Governance Model – Family businesses must ensure their governance structures enable next-generation leaders to learn how to adapt to evolving market conditions and cultural expectations early in their career.

In closing

In a world where geopolitical tensions, shifting labour dynamics, and ESG (Environmental, Social, and Governance) considerations increasingly influence business decisions, leadership is no longer just about value creation—it is about adaptability and relationship-building.

To remain competitive, family enterprises must abandon outdated leadership models and embrace the reality that EQ and CQ are not “soft skills” but fundamental business skills that determine long-term success in an interconnected world.

The real question is no longer whether family businesses should invest in emotionally and culturally intelligent leadership—but whether they can afford not to.

Photo: Credit: iStock # 2194441206