Effective leadership, organisational agility and high-performance in uncertain times all rely on excellent behavioural skills, and above all empathy.
The Empathy Manifesto is a three-part series by Catalyst Thinking Partners, Joss Mathieson and Oliver Hansard. In this first part, they explore the need for leaders to use a new suite of behavioural skills to navigate our uncertain world. In part 2, they will consider how empathy can be used as a compass to create a modern, inclusive and high-performing workplace for the future. In part 3, they will explain how leaders can develop the ability to lead more empathetically.
Part 1: Empathy – the essential leadership skill to navigate uncertainty
As we write this, organisations are having to adapt to massive and unprecedented change from the global pandemic and whiplash economy resulting from it. The familiar structures of the modern workplace are looking increasingly unfit for purpose, but there is still a lack of clarity about what is needed in their place.
In addition, employers are having to consider their position on social issues, being scrutinised more than ever on whether they are living their stated values and taking appropriate actions to be in tune with employees’ and other stakeholders’ expectations.
The challenges organisations now face to adapt, survive and thrive in this age of uncertainty are massive. It is our belief that only businesses with highly-developed and resilient behavioural skills will be equipped to successfully navigate these challenges.
Critical behavioural skills for times of change
VUCA has become a popular acronym in recent times to describe the world we are living in. It stands for Volatile, Uncertain, Complex and Ambiguous. It certainly describes the challenges that most organisations face as industries are disrupted on a daily basis, which has been further accelerated by the coronavirus pandemic.
Disruption from technology, which was already changing faster than we humans could adapt, has been further accelerated by the necessity this crisis has brought. As a result, the nature of work has already changed for millions of employees, and their expectations are shifting as a result of working differently.
The reality is that the pace of change we are experiencing now is the slowest we are going to experience; it is only going to accelerate. Faced with economic reality and ongoing uncertainty about what recovery will look like and how long it will take, many organisations will have to make some difficult decisions and significant changes in response. Some organisations may need to do ten years’ worth of organisational change in the next ten months.
Therein lies a big dilemma. Newfound levels of trust, built up as many organisations have shown that they care about their employees, their safety and wellbeing during the pandemic will quickly turn to suspicion if survival decisions signal that making money is more important than people.
Faced with this challenge, we are convinced that leaders and organisations will need the right skills and behaviours to survive, adapt and thrive. As organisations respond to the challenges of our VUCA world, we believe that the next generation of successful leaders will be VUCA too – Valiant, Understanding, Compassionate and Authentic.
These are the bold new leadership skills which will be essential to inspire their people through the ambiguity and gain the trust of customers and other stakeholders:
- Valiant – courageous, passionate and determined, both to be curious about other perspectives and to do the right thing
- Understanding – seeking to understand how others think and feel, including colleagues, customers and communities
- Compassionate – thoughtful, caring and kind to others, even in the most challenging of circumstances
- Authentic – genuine, honest and transparent, being true to your values, showing vulnerability as well as strength
Crucially, there is one key behavioural skill that will underpin this new VUCA leadership, help organisations navigate the uncertainty and win out in the future. That skill is empathy.
Empathy – the soft skill with hard edges
Empathy is often misunderstood. Some see it as soft, maybe a sign of weakness. Others may think they are empathetic, but in practice offer only token gestures or a few words of compassion to make people feel better.
By contrast, we believe empathy is a fundamental leadership skill that has hard edges, boosting performance in multiple ways and impacting the bottom line.
Greater empathy supports the development of a more supportive and inclusive workplace. By doing so, it enables more honest conversations and boosts curiosity, creativity and collaboration. Creating a more positive, empathetic work culture allows employees to be the best version of themselves and helps the business to thrive in the long term.
Research supports this view. An empathy index published in the Harvard Business Review found that the 10 most empathetic companies increased in value more than twice as much as those at the bottom of the index and they generated 50% more earnings defined by market capitalisation, from one year to the next.
Even before the current pandemic made empathy and trust an essential for organisational success, awareness of the importance and impact of greater empathy has been growing among senior executives. However, many CEOs and organisations have some significant empathy blind spots.
According to Businessolver’s 2020 State of Workplace Empathy Survey:
- 91% of CEOs say their company is empathetic, but only 68% of employees agree
- Overall, 83% of CEOs say that organisations as a whole are empathetic, but less than half of employees (48%) say the same
- 78% of employees say empathy leads to greater motivation, and 76% say it results in greater productivity. Unfortunately, CEOs often do not see that connection – just over 50% of CEOs agreed that empathy inspired productivity and motivation
- However, 82% of CEOs believe a company’s financial performance is tied to empathy, which calls out the disconnect related to the impact of workplace empathy
In addition, the same survey reveals that organisations are not doing enough around employee wellbeing and mental health. 92% of employees say companies should be doing more to address the overall well-being and needs of their workforce. Most CEOs think they are doing a good job, with 86% of the view that their organisation is openly discussing mental health, but less than two-thirds of employees (58%) agree. Given current uncertainty and high levels of anxiety for employees, addressing this is critical.
A great example of the impact that increased empathy can have is Microsoft’s performance turnaround in recent years, where empathy is driving better understanding and collaboration that has fuelled innovation. CEO Satya Nadella embodies how empathetic leadership can drive greater customer centricity and a more inclusive culture, which combined lead to business growth.
Empathy is also essential for building brand loyalty and trust with customers through emotional connections. In a 2018 survey conducted by PwC, consumers said they would pay up to 16% more for better customer service, yet 59% of all consumers feel companies have lost touch with the human element of customer experience.
How can empathy be used as a compass to successfully navigate all this change?
There is growing evidence that empathy is a critical skill for leaders to be successful in the future. The good news is that we can all develop and improve our empathy. In our coaching work with leaders and their teams, we have seen the transformative difference that empathy can make to individual, team and organisational performance.
In part 2 of this series, we will consider how empathy can be used as a compass to guide the creation of a modern, inclusive and high-performing organisation for the future. Then, in part 3 of this series, we will explain how leaders can develop the ability to lead more empathetically.
Want to learn more? Contact Joss or Oliver:
Call Joss on +44 (0)7717 801205 or Oliver on +44 (0)7703 168082