<img height="1" width="1" style="display:none;" alt="" src="https://px.ads.linkedin.com/collect/?pid=536004&amp;fmt=gif">

Culture Building

How Empathy Can Help Leaders Build Companies That Last

By ROHEI
22 November 2021

In a Nutshell

  • In order for organisations to enter into the future of work effectively, certain traits become increasingly critical.
  • Empathy has always been needed for businesses to function well, but it has since taken on a new level of importance because employees are facing multiple kinds of stress from the pandemic.
  • Having empathy at the workplace creates an emotionally safe environment, which helps to alleviate anxiety felt by employees improving engagement and performance.
  • Empathy is inherent in trusted and relational leaders.

Leading a company in COVID-19 times has forced many successful leaders to come to this harsh truth: What got us here won’t get us there.

Many C-Suites have an impressive record of successful leadership roles with lists of remarkable results, but this pandemic has rocked the world in an unprecedented way and even the best leaders have been struggling with how to steer their companies forward.

What new leadership qualities are needed in these unique times to bring the company to a new level of breakthrough? How can leaders use this period as an opportunity to build an even stronger company than before? What is required to build a company that lasts?

 

“In the same way that the pandemic prompted a digital workplace transformation that will shape the new normal, it also triggered a shift in the outlook for empathy - one that will reverberate long after the crisis passes.” — 2021 EMPATHY STUDY, BUSINESSOLVER

 

In order to drive positive impact at scale, especially in today’s VUCA world, leaders need to build empathy within the culture.

Empathy is the ability to recognize how others feel, and to understand other people's perspectives on a situation.

According to Forbes, empathy has always been needed for businesses to function well, but it has since taken on a new level of importance because employees are facing multiple kinds of stress from the pandemic. Businessolver even goes on to say in their 2021 Empathy Study that “in the same way that the pandemic prompted a digital workplace transformation that will shape the new normal, it also triggered a shift in the outlook for empathy - one that will reverberate long after the crisis passes.”

 

Empathy has always been needed for businesses to function well, but it has since taken on a new level of importance because employees are facing multiple kinds of stress from the pandemic.

 

Research makes a strong case that the practice of empathy in the workplace can be the catalyst for incremental results all across the organisation. 

 

A Culture with Empathy Nurtures Innovation

The use of empathy at work can be understood as applying a design approach to business, which is the understanding of user needs and creating solutions to meet those needs. Studies by McKinsey and DesignSingapore Council (Dsg) have found that organisations that take this approach enjoy improved financial performance. Companies taking a design approach have been proven to beat the industry benchmarks by almost 2X in McKinsey's The Business Value of Design study.

 

Companies taking a design approach have been proven to beat the industry benchmarks by almost 2X — THE BUSINESS VALUE OF DESIGN, MCKINSEY

 

Central to the idea of empathy is putting ourselves in the shoes of other people. When empathy becomes a core mindset of every employee, the needs of the customers will be the starting point of everything the company produces. New products will be developed to solve customers’ problems, and existing products will be improved to be a better solution. In Microsoft CEO Satya Nadella’s words, “the source of innovation comes from having a deep sense of empathy. The more we can invoke our ability to meet unarticulated or unmet means, the more that will be the source of innovation.”

Download the playbook to help you ignite and sustain innovation for business growth

On a relational level, when leaders and team members have empathy, it breeds trust. This creates a safe environment that allows creativity to flourish.  

For example, Project Aristotle, a study released by Google in 2017, proved that empathy was a key behaviour that unlocked the most important and productive new ideas. The project analyzed data across teams and found that the teams at Google which generated the best innovative ideas were surprisingly not the A-teams who had the most specialized knowledge and proven smarts. They were instead teams that exhibited a range of soft skills that included empathy.

 

 

On a relational level, when leaders and team members have empathy, it breeds trust. This creates a safe environment that allows creativity to flourish. 

 

 

Displaying Empathy Builds and Retains Top Talent

According to David Rodriguez, executive vice president and global CHRO of Marriott Hotels, “companies that make empathy and human connection part of their culture can have a winning formula for attracting, engaging and retaining talent.”

This is further seen in findings from the 2020 State of Workplace Empathy Study, which reported that 74% of employees would be willing to work longer hours for an empathetic employer, and 73% would choose an organisation with a strong culture of empathy even if it meant changing current job roles, industry or career path. 77% would consider leaving their current organisation if offered a similar job with a more empathetic organisation.

Having empathy at the workplace goes a long way in helping to alleviate the anxiety felt by employees. It cultivates trust, which improves engagement and performance. These all contribute to building a great place to work that employees will want to stay in.

This is especially important when the pandemic has resulted in many feeling burnt out, isolated, and overwhelmed by the pace of change. Creating a more empathetic workplace has never been more needed in continuing to build a high-performing team.

Empathy reduces the amount of time needed to resolve conflicts at work. When every team member commits to understanding the different perspectives present, collaboration increases and energies are channelled to developing solutions rather than engaging in disagreements. Retention naturally increases.  

The Gen Z workforce is now entering the market and will soon form a significant segment of employees. Businessolver’s 2021 Empathy Study found that 90% of Gen Z say they’re more likely to stay with an empathetic employer. Embedding empathy as a mainstay at work will be key to engaging and building the next generation of leaders.

 

An Empathetic Workforce Increases Financial Results

The 2016 Empathy Index measured the empathy levels of 170 companies on major financial indexes via categories that included ethics, leadership and company culture. Findings revealed that the top 10 companies in the Global Empathy Index 2015 increased in value more than twice as much as the bottom 10, and generated 50% more earnings (defined by market capitalization). The study also showed a correlation as high as 80% between departments with higher empathy and those with high performers. 

This is a tangible outcome from the earlier points where we saw how empathy increases innovation and grows a strong, consistent pool of talent. As Businessolver wrote to CEOs in the 2020 State of Workplace Empathy Study, “empathy is 360 degrees. Empathy doesn’t only impact engagement and productivity for employees. It impacts everyone, at every level. Your focus on building a more empathetic environment just might help inoculate your organisation against the inevitable change we always face.”

There is a strong case for how empathy is needed at work in order for leaders to build a company that lasts the test of time. Empathy is caught, not taught, and a culture with empathy begins at the top. To build a culture with empathy, leaders must lead the way.

 

Empathy is caught, not taught, and a culture with empathy first begins at the top.

 

Leaders must go deeper than cognitive empathy with courage

There are practical ways leaders can practise empathy such as using verbal cues that include paraphrasing what they are being told, as well as displaying nonverbal cues that include nodding, smiling, and maintaining eye contact while speaking with employees. Though these are good, it is only at a cognitive level. According to psychologists Daniel Goleman and Paul Ekman, there are three components of empathy: Cognitive, Emotional and Compassionate empathy. By going deeper, beyond the cognitive level, leaders and team members can better build trust and strengthen relationships. This is when the benefits of empathy come to fruition.

 

By going deeper leaders can better build trust and strengthen relationships. This is when the benefits of empathy come to fruition.

 

Cognitive empathy enables better communication and collaboration. However, what people crave is authentic connection—even at work. This is what fosters a sense of belonging and is key to retaining talent and motivating for high performance. To build connection and belonging leaders must have emotional empathy. Connecting at this level takes courage, effort and real intentionality. It requires that leaders be genuinely interested in people. They must sincerely care and value them. Only when the outward expressions of empathy are carried out with inward authenticity will staff feel heard and acknowledged.

Learn more about having the Courage to Connect here

 

Empathy is inherent in relationally competent leaders

Empathy is part and parcel of the first responsibility of a relational leader: recognising reality. This builds trust and paves the way for more meaningful conversations, which in turn lead to agreement, alignment and conviction in taking action. Relational leaders do more than just lead the organisation. They have a particular set of leadership qualities that enable them to build strong relationships. They build trust, resolve conflicts and create safe environments, driving engagement and performance in a more sustainable way. The stakes have never been higher to have a culture with empathy catalysed by trusted and relationally competent leaders.

 

To learn about relational leadership, download this free E-book:

2021-08-19 News&Press - EngageRocket x Praise

 

You May Explore:

relational leadership

How ROHEI can help you with Developing Leaders

We take a relational approach to leadership development. Find out more about how you can develop relational competencies for leaders here.

Learn more

Other Insights

22 November 2021 ROHEI

Ignite Innovation for Business Survival and Growth [E-Book]

Sustaining innovation requires culture transformation. This playbook contains the “22 Principles for Building a Design-Led Culture” and is the result of a year-long qualitative study in collaboration with DesignSingapore Council.

22 November 2021 ROHEI

How Empathy Can Help Leaders Build Companies That Last

In order for leaders to bring their people and organisations into the future of work effectively, empathy has become increasingly critical.

12 October 2021 ROHEI

4 Ways Leaders Can Help their Languishing Teams

Your people are wading through a pandemic fog at a time when companies need to be firing on all cylinders. Our languished workforce needs resilience. Here’s how leaders can help.