Why Empathy above all else can help you win at business — and what you can do about it today.
By: Ziv Haklili
Tags: Empathy, Entrepreneur, Business Leadership, Entrepreneurship

The business world is notorious for being a dog-eat-dog world. Everyone is out to succeed, and if that means “eating a dog or two” on the way, the end often justifies the means.

I think that many newer business leaders cringe at this, but the truth is that we often define what is acceptable in a business leader, CEO or even our own employees in terms of hard hitting, uncompromising brashness. Some research as recent as a few years ago, even suggests this is great, and that being a jerk can pay off big time in business leadership.

But while we tend to pay more attention to these “hard” skills, there’s an increasing body of research that suggests it not only pays to show empathy, it can be a catalyst for significant business success. Yes. Empathy is not just great for the soul, it can also bring a powerful advantage to business.

As a person who strives to lead with an empathy-first approach in every aspect of business, I’ve witnessed the benefits firsthand; and I encourage you to do the same. This year especially, we could all use a bit more empathy in our lives. In the following quick article, I’ll lay out why empathy is so important for you success as a business and a leader within your business.

What role does empathy play in business?

Empathy is often regarded as one of the highest human virtues, and for good reason. It is at the core of what enables us to identify with the struggles, fears, motivations, and hopes of others, and to respond accordingly. It is at the core of what makes us human — the ability to connect and relate with others.

In recent years, it is an increasing requirement that brands have human faces. Research indicates that 65% of people say they become emotionally connected to a brand that shows them it cares. They are more likely to trust these brands because the brands identify with them and understand what they go through.

But it goes even beyond this. Being able to meet the needs of customers, or create products that truly solve their problems, requires a degree of empathy. The example is often given of Steve Jobs, who reportedly never paid for market research during his time at Apple. What he did instead was put himself in the shoes of his customers, and try to determine how they think, the challenges they face and how best to solve these problems.

Writing for the Harvard Business Review, Belinda Parmar asserts that empathy now tops the lists of “soft” skills employers should look for. According to her, “Empathy should be embedded into the entire organization. There is nothing soft about it. It is a hard skill that should be required from the boardroom to the shop floor.” Writing in the same vein, James Allworth also concluded that empathy was “the most important thing he learned at the Harvard Business School.”

The truth is that empathy is critical, not just as a human emotion, but also as a business leadership skill.

Why is empathy important in the workplace?

As mentioned above, empathy is critical to creating workplaces that make people feel heard, valued and involved. But the benefits of empathy are much more profound, and quite varied. And there’s a lot of research that backs this.

Help develop and market relatable products : One of the most fundamental benefits that empathy has to a company’s bottom line is its role in creating products that people want to use. The impact of empathy on Ryanair’s business is well documented. The company found that it was able to increase net profits from €867 million to €1.24 billion by implementing a program that removed many customer annoyances like hidden charges and restrictions to carry-on baggage. It was so effective, the CEO, Michael O’Leary, is reported to have said, “If I’d only known being nice to customers was going to work so well, I’d have started many years ago.”

: One of the most fundamental benefits that empathy has to a company’s bottom line is its role in creating products that people want to use. The impact of empathy on Ryanair’s business is well documented. The company found that it was able to increase net profits from €867 million to €1.24 billion by implementing a program that removed many customer annoyances like hidden charges and restrictions to carry-on baggage. It was so effective, the CEO, Michael O’Leary, is reported to have said, “If I’d only known being nice to customers was going to work so well, I’d have started many years ago.” Accelerate productivity and innovation : Empathy is related to increased job performance and productivity. A study released by Google, called Project Aristotle, found that while it had focused primarily on bringing people with technical skills, the company’s best and most innovative ideas came from “B-teams” made up of people with qualities including generosity and empathy. An analysis by the Center for Creative Leadership across 38 countries confirmed this, showing that managers who demonstrated empathy received higher performance reviews.

: Empathy is related to increased job performance and productivity. A study released by Google, called Project Aristotle, found that while it had focused primarily on bringing people with technical skills, the company’s best and most innovative ideas came from “B-teams” made up of people with qualities including generosity and empathy. An analysis by the Center for Creative Leadership across 38 countries confirmed this, showing that managers who demonstrated empathy received higher performance reviews. Become more successful : Since they have better functioning teams and more relatable products, companies with high empathy levels are also high-performing. According to the 2016 Empathy Index, the top 10 companies on the list earned 50% more and increased in value at twice the rate of companies in the bottom 10.

: Since they have better functioning teams and more relatable products, companies with high empathy levels are also high-performing. According to the 2016 Empathy Index, the top 10 companies on the list earned 50% more and increased in value at twice the rate of companies in the bottom 10. Bolster company image and culture: Every company wants to be perceived as being a great place to work, with a great culture and satisfied people. Empathy can be critical to achieving this as having high levels of workplace empathy results in better engaged workers, who feel valued and listened to.

Overall, there’s a very strong argument that empathy is not just a good quality to have in a company and its leadership. It should be a prerequisite for the entire company, from top to bottom.

How to improve on your empathy levels

Although empathy is an innate human emotion, the good news is it can be learned and improved upon. Proactive management practices that teach skills like active listening, compassion and open communication can be beneficial. The following can also be key: