What role does empathy play in Leadership? Why is empathy important in transforming businesses? How can the Board facilitate innovation?
Some years ago, I had two global FMCG clients (fast-moving consumer goods) in fierce market competition with each other. I was familiar with the individuals on each board. Levels of empathy between board members and the people who worked for the companies were dramatically different. Did it matter? Let’s compare them.
If we receive empathy, we are more confident to take risks and to accelerate innovationClick to tweet
Two different approaches to Board Leadership
In Company A, the board had headquarters north of London with over 4,000 professional and operational staff. They were based on an industrial estate, which included many of their factories. The board had recently moved from a bespoke, stand alone building into the main operational headquarters, alongside their 4,000 colleagues. This was revolutionary but the new offices were still “ring fenced”. What does this actually mean?
The stand-alone building had been variously called “The Palace”, “The Lost Kingdom” and “Pandora’s Box”. Staff whom I met from across the business felt that the Board were disconnected from the business, narcissistic and totally self-absorbed. Other than an outlet in the same village where the CEO lived, I did not meet any staff in the factories or retail outlets who had ever met him. There was only one Board member whom they knew by face and name. It was no surprise that key decisions and innovation bottlenecks disappeared into the Lost Kingdom. The thoughts, ideas and feelings of staff were unacknowledged.
In Company B, The Board members were required and expected to visit at least one retail outlet or distribution hub each week. It was stunning to go from one site and one retail outlet to another to hear staff, including janitors and forklift drivers, tell me positive tales of the Board members. Even more stunning was the way in which Board members interacted with staff. If Board members heard complaints or stories about operational problems, they would resolve the issue immediately. They would work with the staff member, make calls, delegate responsibilities and identify actions on the spot. They would then follow-up with personal phone calls to that employee, regardless of role or level, making quick decisions, listening to staff members, seeing what they do, even trying what they do, and remembering names was part of the day-to-day life of the second company.
Consequently, the second company could implement change, identify innovation and engage staff at lightening speed. Staff were confident to approach Board members to introduce themselves, highlight an issue, an opportunity, or mention a great win. With Company B, I had run a project where we had created a new model for the integration of IT skills and knowledge. The Board level sponsor said that he was not 100% convinced of the model, but I seemed convinced so he would give me and his staff 3 months to prove him wrong. The model worked and delivered multi-million dollar savings. The Board member worked with risk, supported innovation and we knew that we could safely trial innovative solutions. He also understood the feelings and emotions of staff in taking those risks. Company B, at the time, had profits well ahead of their competition. They were significantly outperforming Company A in two of the nine categories where they competed.
So what lessons are to be learned?
If we build trust and understanding through empathy, we gain tacit as well as shared learning. From the point of view of innovation, empathy accelerates cross-functional cooperation as well as delivery time for projects. If we receive empathy as individuals, we have more confidence about expressing our thoughts and actions. We are more confident as groups to share, to take risks and to accelerate and align innovation. Empathy between leaders and workers does not simply improve how it feels to work in such a place. As part of Human Centered Design, empathy delivers measurable differences. The differences are in innovation, performance and productivity, which is reflected in the lower costs and higher profits of the business.
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