How empathy can impact your bottom line

When we talk about the qualities that a successful entrepreneur and business leader must have, we often talk about things like passion, a strong work ethic, the ability to sell, a great attitude and the willingness to ask for help and to learn. All of these are vital and should not be minimized. But there is another, softer characteristic of successful entrepreneurs that we don’t talk about that can be a game changer and that is the quality of “Empathy.”

Empathy for an entrepreneur is about “walking a mile in someone’s shoes” and it is one of the most undervalued, yet most impactful, qualities in a great entrepreneur and leader.

Entrepreneur Magazine contends that empathy “can bring a competitive advantage in business. Our ability to see the world from the perspective of others is one of the most crucial tools in our business toolbox.”

Several years ago, Google did a major study about why some of its teams were more effective than others, in an attempt to identify the factors they should aim to include in building future groups. They learned that the best groups shared 2 behaviors:

1. There was ‘‘equality in distribution of conversational turn-taking.’’ The study determined that even though some group members spoke more during certain tasks and less during others, by the end of the day, everyone had spoken pretty much the same amount.
2. There was high ‘‘average social sensitivity’’, which meant that people were pretty good at reading how others were feeling based on their tone of voice, expressions and non-verbal cues. They were good at figuring out when people felt they were being left out or when others were dominating the conversation and they adjusted their behaviours accordingly.

These 2 behaviours – conversational turn-taking and empathy – create what is known as psychological safety – and they help establish human bonds, both in the work environment and in outside life.  Teams that share these behaviours are better at motivating, better at building loyalty, better at dealing with member dissatisfaction, better at recognizing and acknowledging contributions of members, better at dealing with conflict…they were just better! And leaders that have these characteristics are more likely to have loyal, committed employees and team members. In turn, they are aslo more likely to have loyal, returning customers.

What are some of the other ways that empathy can impact your bottom line?

One of the characteristics of the Lean Startup methodology that is the recommended model for starting a new company is the focus on the customer. When you pick a customer segment to serve, one of the recommendations is to create customer personas. Some entrepreneurs actually name and identify the characteristics of the customer, creating a made-up appearance and background, all the way down to the colour of her hair and maybe even the kind of car he/she drives. Anything that gives you a better understanding of your target customer or market will help you tailor your product or service to that audience. And at the end of the day, understanding people is analogous to empathizing with them.

That goes for your competitors too. If you can think like the competition, you have a better chance of determining their weaknesses.

Empathy is something that you are born with but if you feel you didn’t get a big enough share, don’t worry! This is also something you can develop.  Here are a few ways to up your empathy game; the more you improve, the more it will benefit you, both personally and with respect to the bottom line.

1. Share the microphone – as indicated above, let others talk, and when they do, make sure you actually listen until they ask for opinions or comments. People need to feel heard.
2. Get feedback from others regarding your relationship and listening skills and see what you can do to improve the things others have identified
3. Assume everyone is doing their best and is working for the good of the company instead of assigning blame when something goes wrong.
4. Go somewhere new that is out of your normal environment. Every time you travel, you see new perspectives and learn about other, equally legitimate ways of doing things
5. Treat others as you would like to be treated.
6. Don’t assume others always know what they should be doing. Maybe they would already be doing it if they knew they should be.
7. Celebrate all the wins, from tiny ones to the home runs.
8. Do something hard and challenging. In doing so, it is likely you will experience failure, disappointment or frustration. All of those feelings develop humility which leads to empathy
9. Be curious – it leads to better understanding of those around you.

Empathy is different from sympathy, in that in the latter you feel sorry for someone but you may not even really understand their situation. Empathy, in contrast, is about the ability to imagine yourself in the same situation, with all the emotions, reactions and opinions of that person. It doesn’t have to be about misfortune in the same way sympathy does. Rather, it’s simply about a genuine desire to understand someone else; to build a relationship with them based on a shared experience or at least, the adoption of the emotions of a person going through that experience.

I read something recently that said it’s all about putting yourself in someone else’s shoes, remembering that not everyone’s shoes should fit the same. Profound way of thinking about empathy. The bottom line is that true empathy in business impacts sales, motivation, innovation, productivity, employee engagement, and collaboration – all by helping to understand the other person’s perspective. Putting yourself in someone else’s shoes can make it easier to find a compromise between two points of view.

If you constantly strive to understand others by imagining yourself in someone else’s shoes, your empathy can’t help but change the culture of your company, your understanding of your customer, and impact your bottom line.