In these turbulent times, being empathetic has emerged as a highly valued leadership trait. Are you factoring this into your hiring and succession plans?

Not so long ago, Microsoft was viewed by some as an outdated brand. While Apple was busy inventing the iPhone, Microsoft was held back by a cutthroat culture, infighting, toxic management practices such as stack ranking, and a bullish sales-driven approach.

But after Satya Nadella took the reins in 2014, as the third CEO in the company’s history, he chose to lead Microsoft with empathy, endeavouring to deeply understand customer needs, and meet them with a suite of new products and capabilities.

To achieve this, a massive internal shift was required to value the unique perspectives employees bring to the table, encouraging a culture of curiosity and vulnerability while creating an engaged and committed workforce along the way.

The results have been staggering. The organisation’s annual revenue increased by 84 per cent, from $77.8 billion in 2013 to over $143 billion in 2020. In the first fiscal quarter of 2021, revenue totalled $45.3 billion – a 22 per cent increase compared to the same period last year. Microsoft has since surpassed Apple as the world’s most valuable company.

Three types of leadership empathy

To explain how empathetic leadership looks in the new world of work, Tara Van Bommel, a statistician and director for global non-profit Catalyst, outlines three types of empathy that employers should be cultivating.

The first is cognitive empathy, she says, which includes understanding your employees’ unique experiences and the obligations they have in aspects of their lives outside of work.

One way to demonstrate cognitive empathy is to reflect what employees share with you. For example, you could ask, “It sounds like you’re feeling overwhelmed. Is that correct?”

The next type is affective empathy, when you feel the same emotion as another person. If an employee reveals that they lost a family member, for example, you feel that heartbreak, or something similar. To display affective empathy, leaders should give employees space to explain without interjecting or diverting the conversation.

“If they take a pause, keep pausing, without trying to relate to them with your own experience,” says Van Bommel.

Lastly, behavioural empathy manifests in a leader’s actions, such as demonstrating that you’re actively listening. This involves paying attention to facial expressions and body language to gauge how an employee is feeling, while using your own body language to convey interest.

HR professionals and managers can combine all three empathy types by being flexible and catering to employees’ unique needs, she says. For example, if one of Van Bommel’s direct reports needs to manage homeschooling during certain times of the day, she takes this into account when scheduling meetings.

An empathetic leader would ask each person, ‘What do you need right now?’, says compassionate leadership coach Rena DeLevie.

That might mean stipends for childcare, while for others it could be more robust mental health resources, including free sessions with a therapist. What’s important, says DeLevie, is to be consistent in your approach. 

“When people know where they stand at all times, they can trust.” Communicating decisions with clarity and consistency is also key. 

“Vague communication creates enormous amounts of anxiety,” says DeLevie.

The benefits of empathetic leadership pay off

Research led by Van Bommel found that 61 per cent of employees who worked under an empathetic leader felt more innovative at work, compared to 13 per cent with less empathetic leadership. 

“When employees know they can bring their full selves to work, that unleashes greater creativity because they feel safe to share unconventional and innovative ideas,” says Van Bommel.

DeLevie had a reckoning post-9/11. As a self-proclaimed former “fear-based” leader working in operations in the fashion industry, the terror attack put life’s fragility into perspective for the native New Yorker.

“I connected with the intimate truth of compassionate leadership, which is: who do I want to be in this world?” she says.

Many leaders across the globe are now facing a similar reckoning due to the pandemic. 

“It levelled the playing field and brought vulnerability to the fore,” she says. “Gone is the stigma of anxiety or asking for help.”

Empathetic leaders displayed care for the difficult circumstances their employees faced during the pandemic by regularly checking in, listening to their concerns, and taking action based on what they heard, all while role-modelling vulnerability. 

These aren’t just the qualities of the COVID-19 leader; this is indicative of the type of leadership needed for businesses to get back up and humming.

The flexibility factor

Developing and hiring leaders who display empathy and strong emotional intelligence is a no-brainer.

In Van Bommel’s study, 76 per cent of employees with empathetic leaders felt more engaged in their work. Decreased burnout was another finding, with 54 per cent of female employees able to better manage their wellbeing in the presence of empathetic leaders. Interestingly, no difference was shown for male employees.

“Flexibility has a lot to do with it,” she says. “Women who bore the brunt of increased unpaid labour at home felt the impact of empathy from their managers and leaders.” 

Empathy also leads to retention and loyalty, which is particularly important in today’s shaky labour market.

“You have ambassadors for your company and they bring in talent without having to use a headhunter,” says DeLevie. 

One organisation she points to as a prime example of the immediate impact empathetic leadership can have is card payment company Gravity.

After learning that one of his employees needed a second job during the pandemic to make ends meet, CEO Dan Prince took a pay cut and set the minimum wage for his company at US$70,000.

With 70 per cent of employees able to clear their debts, money was no longer top of mind. Instead, the focus was on producing good-quality work.

“Profits have tripled [at Gravity] and loyalty is through the roof,” says DeLevie. “It greased the wheels of communication, collaboration, creativity and productivity, which cuts costs in every way.” 

Don’t let the scales tip too far 

Importantly, displaying empathy doesn’t mean being a doormat, says DeLevie.

“It’s about giving people the benefit of the doubt without the assumption of guilt, and holding people accountable.”

For example, DeLevie once had a new hire who spent his entire first week glued to Facebook. She didn’t berate him, but instead sat him down and asked, “Do you really want this job? Think about it over the weekend.”

After the employee had space to evaluate his behaviour, he became a “master performer”.

“I saw he had potential. I [realised] he was extremely young and hadn’t been taught how to be a professional,” says DeLevie.

As the custodian of a group, a leader’s number one priority should be to ensure the team is working well together, which can often entail giving hard feedback, says Daniel Murray, CEO of Empathic Consulting.

If an employee has an issue with tardiness, for example, he recommends taking an objective approach. 

“You could say, ‘I’ve noticed you’ve been late to the last few meetings. I imagine that’s because you have other things going on. What’s causing this?’” 

Leaders should be clear about the impact this behaviour has on the team, such as reduced productivity, and the consequences should it continue.

Setting an achievable expectation also helps, says Murray. For example, by stating

“I want you to be on time for the next five meetings or we’re going to have another chat.”

Leaders who say, “I’ll just let you off the hook this time” are sending the message to others that the conduct is acceptable, he says, which leads to a slow erosion of trust.

“An empathetic leader thinks, ‘This is not about me. This is about the team, and the behaviours that drive performance.’”

Empathetic solutions

Why do non-empathetic leaders rise in the ranks in the first place? Murray suggests it’s because many organisations promote their technical experts rather than those with leadership potential – like when the best accountant becomes head of the team. 

“The problem is, the skills needed to be a good accountant are nothing like those required to effectively lead people,” he says “You’re putting someone who’s got a polished set of skills in one domain into a completely different role.” 

Technical expertise alone will not help to tackle increasingly complex organisational challenges, he says.

“We need leaders who can bring diverse people and sets of skills together to solve problems, and who can work together to adapt to complex situations.”

One of Murray’s clients recently realised it had a dearth in leadership capability when faced with an unprecedented challenge during the pandemic. It was experiencing an increase in demand that it was unable to meet due to global supply issues.

Warring silos meant that when a salesperson needed to get a product to a customer, they would blame warehouse management. When stock eventually came in, there were clashes over who would get it first.

The leadership team became dysfunctional, with the managing director’s role relegated to refereeing squabbles.

“They didn’t have a strong understanding of each other, their preferences or the way they worked,” says Murray. “Until we could get leadership to act like a team that was committed to the success of the group, they were going to be putting out spot fires.”

“When employees know they can bring their full selves to work, that unleashes greater creativity because they feel safe to share unconventional and innovative ideas.” – Tara Van Bommel, statistician and director, Catalyst.

After emphasising the need to build a culture based on trust, curiosity and understanding to meet the challenge, leadership meetings went from “tick-a-box formalities” to robust, challenging conversations, says Murray.

Leaders were able to approach team meetings with better questions such as: What are our options? What are the implications for stakeholders? What’s best for the group? 

“They responded to customers [and employees] with a clear, united voice, and made strategic decisions on who would go first, and how this would be communicated.

“Instead of blaming the warehouse, they were able to say, ‘This is what’s going on. This is how we’re responding to it, and we’re all working hard to solve it.’

“As a result, customers were clear on where they stood [and] teams felt more confidence in each other and their approach to the issue.”

Empathy inspired curiosity

Let’s quickly refer back to that leadership shift at Microsoft. Ingrid Jenkins, Microsoft’s HR Director for Australia and New Zealand, says the key to success was Nadella’s introduction of a growth mindset.

Teams morphed from “know-it-alls to “learn-it-alls”, which inspired curiosity around the experiences of others, she says. 

In 2019, Microsoft rolled out a new leadership framework, Model Coach Care, fuelled by insights gleaned from thousands of employees in surveys and focus groups.

Leaders are expected to role-model vulnerability, and coach teams by helping them find opportunities to grow, while allowing them to learn from their mistakes. 

ANZ Managing Director Steven Worrall is often openly vulnerable, revealing where he’s still learning, says Jenkins.

“The problem is, the skills needed to be a good accountant are nothing like those required to effectively lead people.” – Daniel Murray, CEO of Empathic Consulting.

“One thing we’re hearing from our teams is that they need greater support around work-life balance,” says Jenkins. “Steven is open in saying, ‘We don’t have all the answers. We want to involve our people to help us with this.’” 

In formal performance conversations at Microsoft, a key component in leadership empathy is asking employees, “With the benefit of hindsight, what would you do differently to achieve a better outcome?” The manager then works with the employee or offers coaching around these opportunities for next time around, says Jenkins.

The listening systems at Microsoft have also evolved since Nadella’s time at the helm. Each day, a sample group of the organisation is sent a ‘daily pulse’ check to capture insights into the Microsoft work experience. The survey questions evolve over time based on leadership’s observations or differences to the workplace environment, says Jenkins

Over the last 18 months, Microsoft has incorporated more intentional questions around employees’ COVID-19 and virtual workplace experience, and how this translates in terms of management support.

“The insights from the pulse checks enable leaders to draw insights on key themes that are surfacing and go into these more deeply in one-on-ones with their team members.”

In a COVID-19 world, evolving business challenges, coupled with changing customer and employee needs, mean that leadership empathy is no longer a nice-to-have. If you don’t understand or can’t accommodate your employees, someone else will. 

A longer version of this article first appeared in the Dec/Jan 2022 edition of HRM Magazine, exclusive to AHRI members.

AHRI’s short course, Emotionally Intelligent Leadership, is designed to give you simple and effective tools to lead with empathy. Find out more.