Why you should make empathy your new business metric

Empathy: a lovely fluffy word, isn’t it? Touchy. Feely. Soft. Perhaps with hints of being rather passive – even submissive.

When it comes to business, though, it’s time to banish such banal notions. Why? Well, because this so-called soft quality seems to have an essential role as a customer-service clincher, a killer sales technique, a talent magnet and a make-or-break crisis management tool. And it looks like business is finally giving empathy the serious respect it deserves.

In fact, a recent article in the influential Harvard Business Review declares, ‘Empathy has never been in more explicit demand from corporate leaders.’ Sounds pretty emphatic. But what’s leading this trend? Is the driving force the business leaders themselves, or are they simply reacting to what customers are demanding? Or is there something else at play?

Empathy smoothies

One business leader we spoke to with some insight into the matter is Douglas Lamont, CEO of Innocent Drinks – a UK success story with a strong customer focus. Founded by three fruit-smoothie-making university friends in 1999, Innocent now spans 14 countries, is worth around £300 million, and is known for its quirky and friendly brand voice. (Qualities that earned it an even bigger fan – the company was acquired by Coca-Cola in 2013.)

The emerging empathy focus is not just a recent novelty, says Lamont. Instead, he traces the trend back to changes in education over the last few decades that are now influencing the workplace. As young people start work, they bring with them different outlooks and expectations than previous generations had. Alongside shifting the nature of a typical work life cycle, this has helped to sow the seeds of the empathy culture.

‘In the past it was normal for school leavers and graduates to join a company and follow a very structured route, perhaps staying with that employer for 20 years or more,’ says Lamont. ‘But the expectations of most young people are completely different today. The way the education system operates now helps them to develop highly effective emotional intelligence skills. They are used to being able to express themselves and develop their own path.’

A new generation

And with this demographic in mind, a successful company needs dual channels of empathy: they need to understand and consider them as both customers and as employees. In either category, people are more likely than they once were to vote with their feet if they’re unhappy. ‘When looking for work, they actively seek out companies that are a good fit for them,’ says Lamont. ‘Talented people will very quickly move on if that’s not the case. Of course, these people are consumers too. And they’re used to their views and feelings being taken into account. ’

So what, in this culture, is Lamont’s recipe for business success? ‘It’s built on finding and retaining the best talent, on listening to customers, treating them how they expect to be treated and giving them the products and customer service they want. Empathy is right at the heart of all that.’

Soft skill or hard business sense? Why businesses can’t ignore the importance of empathy, via @EmphasisWriting Share on X

Empathy, then, isn’t just a trendy consultants’ buzzword, nor have CEOs simply plucked it out of the air as a priority. Its place at the ‘heart’ of many forward-thinking companies is thanks to a generation for whom it was an essential, everyday part of their education. As Lamont points out, they’re now consumers as well as potential employees.

The education revolution

Over the past two decades, education systems around the world have introduced programmes in social and emotional learning (SEL). In the UK, students have benefited from a raft of initiatives featuring empathy as a core principle linked to improving emotional intelligence more broadly.

‘For more than 15 years there’s been a massive focus on bullying, for example,’ says education consultant Michele Miller. ‘Couple that with the agenda around sexuality and what is “normal”. Young people now do generally display more empathy – for one thing they are far more accepting of what is different.’

Sounds like a good set-up for an improved society. And naturally there are implications for the business world too – again, in terms of this young generation as both prospective employees and as consumers. ‘They have developed better people skills,’ says Miller. ‘Interestingly, they’re also far more likely to say, “That’s not my job,” or, “That’s not right.” They have the confidence to speak out.’

It should come as no surprise, then, that as customers they expect better treatment and are more confident about stating their views when service falls short – often on social media, as some companies find out to their cost.

The empathy gap

Indeed, when it’s clear there has been a serious lack of empathy, the consequences can be devastating for a company. One infamous example is United Airlines, which hit the headlines back in April for all the wrong reasons after shocking footage emerged of a Kentucky doctor being violently dragged off an overbooked flight.

The incident itself was bad enough. But it was the company’s lack of empathy in the aftermath that did most damage to its reputation. United’s CEO Oscar Munoz was widely ridiculed for issuing a cringeworthy statement that offered no apology to the victim but began by stating: ‘This is an upsetting event to all of us here at United.’

A golden rule of empathy in such circumstances is to focus on the customer and how they must be feeling, rather than on yourself or your company. (When you’re the ones who’ve literally drawn blood, some might even call this obvious.) This misplaced focus, combined with the use of distancing jargon – the bloodied customer had been, as they put it, ‘re-accommodated’ owing to the ‘overbook situation’ – reads like a lesson in doing everything wrong.

As well as agreeing a payout for an undisclosed sum, United later stated it would like to ‘profoundly apologise’ to the victim, but it faces a monumental challenge in overcoming the negative impact on its reputation.

Words that win friends

The flip side is that getting empathy right when things go wrong can quickly nip a problem in the bud – and may even win you fans.

How businesses can harness empathy for better sales and happier customers and employees, via @EmphasisWriting Share on X

In 2006, online T-shirt company Threadless accidentally deleted all of the blogs its customers had maintained for several years. But staff issued an open and heartfelt apology that took responsibility and showed they understood how upset the bloggers would be. ‘We know that you guys have a lot of important stuff in the blogs that were lost,’ they wrote, ‘and we sincerely apologise’. And rather than hide from the fallout, they even invited comments on the blunder – and most customers reacted very positively.

Showing empathy is proven to boost sales, too. At multinational cosmetics company L’Oréal, salespeople selected for their emotional competence sold $91,370 more than other salespeople did, achieving a net annual revenue increase of more than $2.5 million.

And in 2015, Michael O’Leary, the boss of budget airline Ryanair, attributed a 37 per cent rise in six-monthly pre-tax profits to ‘being pleasant to customers’ by scrapping charges and improving customer service. He told Bloomberg TV: ‘If I’d only learned in college that being nice was good for business, I’d have done it years ago.’ Cynically put, perhaps, but it’s a point well taken.

Dealing with bad news

Inevitably, customer service can involve delivering bad news. Here, again, empathy makes all the difference. A recent article in Utility Week urged companies chasing bad debt to ‘become more human’ in their strategies. Nick Boxall-Hunt of Rant & Rave, which provides customer-services solutions for companies including Thames Water and npower, advises companies to first send a simple text inviting the customer to call them. This allows the person owing money to ‘engage on their terms’ with staff trained to ‘handle the calls in a collaborative manner’.

And it’s not only the customers who should get the empathy treatment. Boxall-Hunt also urges customer-service team leaders to provide positive feedback to staff involved in debt management, to help reduce absenteeism and churn.
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The empathy trailblazers

So which companies come out on top when it comes to empathy? The annual Empathy Index pinpoints companies which are creating the most empathetic cultures – those that ‘retain the best people, create environments where diverse teams thrive, and ultimately reap the greatest financial rewards’.

It’s perhaps no coincidence that the three most-highly ranked companies in last year’s index – Facebook, Alphabet (Google) and LinkedIn – are social-media tech giants. Who better to understand that embracing empathy in business is part and parcel of achieving success in the realm of social media?

Can we get better?

But can all companies bring empathy on board in the same way and achieve similar results? Well, yes, but it takes serious commitment, and at all levels of the organisation. And we all know that not everyone is equally naturally empathetic.

So is it a skill you can teach to all members of a customer service team, for example? The answer, again, is probably yes. But even this needs a little more explanation. In his seminal 1995 book Emotional Intelligence, author and psychologist Daniel Goleman identified empathy as one of five components of emotional intelligence – even making the case that this sort of intelligence matters more than IQ.

But where does this five-part EQ (as it’s sometimes known) come from? Goleman explains: ‘Emotional intelligence is born largely in the neurotransmitters of the brain’s limbic system, which governs feelings, impulses, and drives.’ And while empathy does have a genetic component, people can also ‘acquire empathy as a result of life’s experiences’. In other words, training can help.

Indeed, it may be possible to improve in all areas of emotional intelligence, given the right conditions. As Goleman continues, ‘Research indicates that the limbic system learns best through motivation, extended practice, and feedback.’

So there’s the challenge for businesses on a plate. Motivation, extended practice and feedback. It may not be easy, but looking at companies that have embraced that challenge, it’s undoubtedly worth it.

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