3 Ways Developing Empathy Supports Business Acumen

    

Earlier today, I was co-facilitating a leadership development workshop for a group of global leadersempathy-business-acumen intensely preparing and developing their skills to be more effective leaders both today and tomorrow.

One of the discussion topics of the day was developing empathy skills. As I was listening to my co-facilitator do a great job of explaining the concepts and engaging with the group, I started to notice the dialogue in the group and among participants was different than any I have ever heard before. In listening to the great conversations, I picked up on two interesting themes coming from 42 leaders in the virtual session:

  1. The group had a deeper sense of the value of themselves than I’ve ever experienced.
  2. They had a purer empathy for others than I’ve ever heard.

Since the pandemic, it has become crystal clear to me that there are two types of leaders; those who are empathetic and care deeply about others, and those who are driven by selfishness and see other people as a means to an end. Their end.

One of the participants shared that she had learned the hard way that having a lack of empathy was bad for business. It destroyed relationships and caused irrevocable damage to the value of her business. She shared a story of a business unit that became toxic with new product failure after another until it was eventually shut down and everyone lost their jobs.

The intense conversation went on for over 30 minutes and I was able to capture 3 key learnings to share in this blog.

What is Empathy?

Before I share the 3 key learnings, it’s important to have a clear and concise definition of empathy in the business environment:

Empathy is the process of understanding, being aware of, being sensitive to, and vicariously experiencing the feelings, thoughts, and experience of others without those others specifically telling you how they are feeling in an objectively explicit manner.”

The Business Acumen of Empathy in 2021 and Beyond – 3 Learnings

1) Drives better and more profitable revenues

No matter which industry you are in, organizations that are deeply empathetic will generate more revenue. To support this claim, I did some research and found a fascinating thesis published by a PhD student at Rutgers named Gary Cherniss. In his thesis, Cherniss cites some research about the success of insurance agents. In a national insurance company, insurance sales agents who were weak in emotional competencies such as self-confidence, initiative, and empathy sold policies with an average premium of $54,000. Those who were very strong in at least 5 of 8 key emotional competencies sold policies worth $114,000.

In speaking with participants of my session, they shared example after example of how the salespeople within their organization were no longer getting meetings with customers because the customers feel there is a complete lack of observable empathy.

We concluded that the only way to be successful in this new normal is to adjust your tone, listen more, and really show that you care (not fake act like you care).

2) The work feels more rewarding

When a work environment is led by empathetic people, everyone gets along better and are more productive. The drama and politics are lessened and there is much less of the “blame game” because empathetic / authentic people care more about the work and the happiness of the environment then being driven by hidden agendas.

Great leaders create and support an empathetic environment because it is more productive, and employees are significantly happier working and working with others. And when this happens, turnover is reduced significantly.

3) Learning more quickly from mistakes

Every business makes mistakes. Sometimes the mistakes are choosing the wrong price, or focusing on the wrong marketing message, or innovating a product nobody wants to buy. Organizations that are oriented around having an empathetic approach are able to learn quickly and move on as opposed to organizations that wallow in their own self pity and blame each other for the mistakes. The business impact of not learning from mistakes through an empathetic culture could be devastating.

In summary, I think developing empathy skills is going to be one of the hottest and most important competencies during the rest of 2021. Being aware of how you show up and present yourself is going to be more important that setting a strategy or reading an income statement. Without empathy, revenues will decline, costs will go up, and great employees will leave your company to find opportunities where empathy skills are embraced and celebrated.

why business acumen matters

Robert Brodo

About The Author

Robert Brodo is co-founder of Advantexe. He has more than 20 years of training and business simulation experience.