Why empathy is a must-have business strategy

“Empathy is important, but not enough to put significant investment behind it”. That sentiment, expressed to me by a senior banker, was the dominant position before the COVID-19 pandemic. Empathy was seen as a “nice to have”, something that was warm and fuzzy and made you feel good as a leader, rather than as a tool to expedite growth. For many, it was a tick-box exercise. Management would run empathy training and then everyone would go back to their day job.

Fast-forward 18 months to a global pandemic that resulted in workforce burnout, and empathy is taking on a critical role in company culture. Driven by respected CEOs, such as Jane Fraser at Citi and Satya Nadella at Microsoft, empathy has risen to the top of the board’s agenda.

What’s changed? COVID-19 has pushed us all to our limits. Talent is leaving businesses in droves. Many of us are exhausted emotionally and physically, giving rise to workplace burnout, a WHO-recognized condition described as “chronic workplace stress that has not been successfully managed”. It is now accepted that burnout resides in workplaces and cultures, not in individuals. Harvard Business Review states that “the responsibility for managing it [burnout] has shifted away from the individual and towards the organization”. It’s the company's responsibility.

One of the main issues has involved the blurring of home and work life, leading to increased loneliness and social isolation. As Microsoft’s Nadella says: “Work from home feels like sleeping at work.” This lack of boundaries, greater financial pressure and fears about job security have resulted in a decline in mental health coupled with increased anxiety. In a global study by Qualtrics, two in five (41.6%) respondents said their mental health had declined since the outbreak of COVID-19, while 57.2% reported higher levels of anxiety.

Empathy can play a vital role in addressing these issues. It helps create a sense of belonging, reinforcing the belief that employees’ perspectives matter and their voices are heard.

Addressing the empathy deficit is good business. New research from Catalyst highlights the negative impact unempathetic leadership can have: 61% of people surveyed with highly empathic senior leaders report often or always being innovative at work compared to only 13% of those with less empathic senior leaders. Meanwhile, 76% of people surveyed with highly empathic senior leaders report often or always feeling engaged, compared to only 32% of those with less empathic senior leaders.

As study author Tara Van Bommel explains: “Our findings demonstrate that not only is empathy an effective business strategy, it is a strategic imperative to respond to crisis, transformation, and a critical ingredient for building inclusive workplaces where everyone can belong, contribute and thrive.”

The survey’s findings also suggest women are disproportionately affected by unempathetic leaders. Those with highly empathic managers experienced less COVID-19-related burnout at work (54%) than women with less empathic managers (63%). Women of colour are even more adversely affected, reporting lower levels of general workplace burnout (54%) than those with less empathic senior leaders (67%). This can cause employee productivity, engagement and organizational commitment to plummet.

The feeling of being valued and respected in the workplace was also significantly less for women of colour (40%) and white women (42%) compared to white men (64%). Empathy has a significant role to play in creating inclusive and diverse cultures and leaders often fail to realize the proximity between diversity and empathy.

Show your commitment

Start by debunking some of the myths around empathy. Show that you are serious about empathy and realize it’s not just a gimmick. It’s not about bringing your dog to a Zoom call but about being committed to making empathy part of everyday culture. Include empathy as one of your metrics, appoint a chief empathy officer, add empathy to your investment decision criteria – show your people that empathy is here to stay and not just a tick-box exercise.

Use data to measure progress

It’s crucial to introduce a series of data-driven metrics to help measure your progress. Use polls to measure empathy levels in online meetings. Make sure there’s a direct question about empathy in your employee and customer surveys and run them monthly not yearly. Break down empathy into its essential components: empowerment, meaning, belonging, reassurance, authenticity, collaboration and ethics. Data is critical to empathy, enabling you to pinpoint your empathy deficits and strengths.

Start with small-scale nudges

Empathy is not about grandiose gestures; it’s about multiple, small-scale “empathy nudges”, which are low-cost, high-impact measures. In one company, we developed more than 40 nudges as part of an empathy programme. Individually they may seem trivial but together they combine to generate an empathy revolution. An empathy nudge could be measuring the amount of time people get interrupted in meetings or sending out a monthly email from the CEO recognizing those who have gone above and beyond. It could be changing a job title to reflect the impact the person has rather than the status of the role. Disney receptionists are called “directors of first impressions” in recognition of the importance of their role. These small changes have a huge impact on empathy levels.

The world has changed and leaders need to adapt. Mental health, stress and burnout are now perceived as responsibilities of the organization. The failure to deploy empathy means less innovation, lower engagement and reduced loyalty, as well as diluting your diversity agenda. The good news is that leaders can fix this. You need to show your commitment to empathy; measure progress and implement a series of nudges that will stimulate an empathy revolution. The time is now.