Diversity and inclusion

Empathetic leadership: building trust and business benefits

Susie Crowder,
Isabel Perea,
Ngozi Angela Ogwo,
Joy Taylor,
Dave Dunckley
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In 2021, empathy is emerging as a key leadership trait, offering a route to more productive, innovative business. And while different cultures have different approaches to empathetic leadership, there are practical steps any business can take to grow empathy within their teams.
In this article

Over the last 18 months, we have all had cause to be more empathetic, in our home lives, with our colleagues, and towards our communities. And business leaders have faced imperatives to be empathetic in their roles, as physical collaboration has been replaced with virtual interaction, and staff have been placed under unprecedented stresses, calling for an altered, more flexible leadership skillset.

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In the wake of the COVID-19 outbreak, organisations across the world have recognised the importance of empathy in the workplace. The results of Grant Thornton’s 2021 International Business Report (IBR) research[i] reflect the emergence of empathy as a valued leadership trait, with 22% of global mid-market leaders citing it among the most important for 2021 and beyond.

“We know that a happy and healthy workforce is a productive and profitable workforce. We also know that pre-COVID-19, one in four of us would have been affected by a mental health condition at some point. This has accelerated,” points out, human capital advisory director for Grant Thornton Channel Islands. “Empathetic leaders will be aware of how their people are feeling as a result of the unprecedented changes that businesses and their people have gone through, and actively supporting them.”

But while empathy in personal relationships is often instinctive, how it manifests in a business environment is less apparent. An extension of emotional intelligence, empathetic leadership is the ability to be compassionate and to connect deeply through a demonstration of sincere interest. This can be achieved through being present, listening, and taking time to become aware of the feelings and thoughts of another person.

Crucially, being empathetic does not mean you always need to agree with another viewpoint. The key to empathetic leadership is being willing to understand how another person may experience an event or situation without passing judgment or making assumptions, allowing them to feel safe and understood.

Isabel Perea.png“To be truly empathetic, people must, in addition to understanding others, respond appropriately to the feelings of others,” says Isabel Perea, audit partner at Grant Thornton Spain. “Those able to do both will show a natural predisposition for high demand skills, such as leadership, teamwork, negotiation skills and good customer service.”

Ngozi Ogwo.pngEncouraging empathy in leaders requires a visible shift in business culture away from a sole focus on key performance indicators and deliverables, and investing in relationship building that promotes the wellbeing of employees, believes Ngozi Ogwo, CEO of Grant Thornton Nigeria. “Empathetic leadership requires that you step outside your own emotions to view things from the perspectives of others. As Alfred Adler puts it, ‘seeing with the eyes of another, listening with the ears of another, and feeling with the heart of another’.”

Joy Taylor.pngEmpathetic leadership also means expressing your understanding of the contexts, experiences and feelings of others. “Empathy in leadership – the skill or capacity to understand another’s frame of reference – is absolutely a distinguishing factor between a good and a great leader”, explains Joy Taylor, National managing principal – operational and organizational transformation at Grant Thornton US.

Better business through empathy

Though empathy is hard to quantify in itself, the business benefits of empathetic leadership are tangible. Among mid-market business leaders who grew their staff numbers by at least 5% in 2020, empathy was more consistently important than the global average, with 25% citing it as a key leadership skill. It also scored well with those who grew exports and revenues during the height of the pandemic.

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“At work, empathy always generates a benefit. If everyone in the company complies with the rules of coexistence, productivity increases,” points out Perea. “It will not be necessary to invest time and effort in mediations, and each worker will look after both their own interests and those of the rest and, therefore, those of the company.”

Those businesses with a culture that treats their people as the most important asset are likely to have more empathetic leaders, adds Crowder. “This is reflected in their corporate values and how they do their business. Those that fail in this will see a decline in engagement, motivation and performance, and indeed ultimately the bottom line.”  

Empathy directly correlates to managers’ job performance, according to the Center for Creative Leadership report, Empathy in the Workplace: A Tool for Effective Leadership, with empathic emotion, as rated by a leader’s subordinates, consistently predicting positive performance ratings from that leader’s boss. Conversely, lack of empathy in senior management can result in negative business outcomes. Research by Singapore Management University found middle and lower management showed less company loyalty and less job investment when senior managers failed to demonstrate empathy.

Among the outcomes of an empathetic environment is increased innovation. People feel more able to experiment when supported by leaders who allow them to test and learn without fear of failure.

“Leading by example, rather than always leading from the front, helps people to feel more empowered to freely share their ideas, recognising that they are heard, seen and appreciated for their contributions,” says , CEO of Grant Thornton UK.

Empathy also generates a shared sense of purpose, making employees more invested in the goals of the business, adds Ogwo. “As empathetic leaders listen more to their teams and acknowledge their needs and contributions, they motivate them to produce optimal performances and cultivate a shared vision.”

And empathetic leadership is key to attracting, nurturing, and retaining talent. “Empathy must be promoted if you want to attract and keep the best and brightest”, says Taylor. “Let’s not forget, you don’t get to be a leader is nobody is willing to follow you.”

Business culture - A world of differences

With the impact of the pandemic and broader social shifts, skills traditionally perceived as ‘softer’ are coming to the fore. “Given the social shifts taking place in our culture and social issues moving to the forefront across the globe, being empathetic is simply a leadership requirement,” says Taylor. “It’s crucial for retaining talent, dealing with the ever-changing uncertainties of each day, and caring for the various needs of our stakeholders, teammates, coachees and cohorts.”

Despite these benefits, local business culture has a significant impact on the weight that empathetic leadership carries. In Grant Thornton’s regional research, 10% of respondents in Africa cited empathy as one of the most important leadership traits, while in APAC and North America, that figure rose to 21%. Some 26% of senior managers in the EU rated empathy as most important, while Latin America had the highest positive response rate at 32%.

Practical steps to empathetic leadership
  • Listen with real interest, respect and without prejudice. Play back what you’ve heard, act on feedback, and provide support where it’s asked for.

  • Accept criticism. Criticism is an excellent opportunity to improve and adapt to the needs of customers and staff. Analyse your own performance with tolerance and patience – and with objectivity.

  • Honour emotional responses. Responding to and naming emotions will help to integrate empathy in the way you present yourself in the business world, in your organisation and to your team.

  • Get to know people. Take time to meet co-workers, keep up to date with what’s happening in their lives, put yourself in other people’s shoes, and aim to make their jobs easier.

  • Bring teams together. Periodic team meetings can be used to frankly and non-judgementally discuss issues that may have occurred, leading to useful learning.

  • Share what works, and what doesn’t. Celebrate successes, and also admit that nobody gets it right all the time. Gather feedback on leadership from your people to understand their perspectives.

  • Recruit proactively. When recruiting team members, have clear objectives that emphasise empathy as a core value, to establish a compassionate culture.

  • Train your empathy: Often, people are promoted into management because of their technical capability and not their leadership potential. Be open to coaching and training on what empathetic leadership looks like in 2021.

Empathy in the Workplace, which surveyed leaders in 38 countries, found that the relationship between empathy and leadership performance is more marked in cultures with a traditional business hierarchy, where stratified power underpins social order. China, Egypt, Poland and New Zealand all follow this model. In these countries, the ability to bridge the rigid hierarchy with empathy creates a climate of protection and support, resulting in better job performance.

Empathy also has a powerful role in cultures with a flatter leadership structure. “In the UK, recent high-profile examples have demonstrated the pitfalls for leaders who are viewed to lack empathy and be out of touch,” notes Dunckley. “Business leaders are held to account publicly, so it’s important they’re authentic in the way they speak about issues important to their people.”

Even in those regions where softer managerial skills have been less valued, empathy is being recognised as fundamental to overcoming the challenges presented by the pandemic. “Empathetic leadership is the need of the hour,” says Ogwo. “In Africa, I see empathy coming to the fore, to support the campaign for a transformational style of leadership that encourages team spirit and social connections.”

Size matters when it comes to empathetic leadership

The size of the business also impacts its approach to empathetic leadership. The IBR research showed that larger businesses are placing more emphasis on the need for empathy, perhaps because it is harder to maintain as teams and business units increase in size, and interactions with direct reports become distant or irregular.

“As businesses scale up, there will be a need to encourage team spirit rather than focus solely on output,” believes Ogwo. “Leaders must recognise that the performance of a team is largely dependent on the attitude of its members. Empathy helps management redirect their focus by encouraging collaborations, boosting morale, productivity and retention.” A high empathy index would be a powerful KPI in dynamic organisations, she suggests.

“Trying to foster a consistent employee experience in a larger organisation is more complex because as a business scales up, the size of the leadership team will naturally grow,” adds Dunkley. “Training and support for people managers in how to be empathetic leaders is key, as they have the most influence over the day-to-day experience of employees.”

While the business grows, the need to retain a connection between leaders and their people also increases, concludes Perea: “The value of our workforce lies in our teams, in our people, and in fostering authentic relationships guided by the company’s values.”

What does empathy mean in practice? “For me”, Dunckley explains, “being an empathetic leader is about taking the time to listen, playing back what you’ve heard, acting on feedback, providing support and communicating this across your organisation to clearly define your values and expectations”.

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i. Grant Thornton’s International Business Report (IBR) surveys almost 10,000 businesses across 29 economies.