The Empathetic Executive

Economic Shifts Force Executives to Consider the ‘Whole Person’

​Ben Herman remembers a time when his bosses at a Wall Street hedge fund firm would yell directions from across the room and publicly berate those who weren't performing well.

Such leaders, he recalled, didn't mince words, much less sit down with their workers for heart-to-heart talks about their future or their dreams. They may not have cottoned well to those who needed time off to care for a newborn or look after a sick relative. "Employee engagement" might not have been a key focus; at the top of the agenda, instead, was the day's draw.

Now an executive himself, Herman has learned that one of the most important factors for a company's success is being an empathetic executive.

"Leadership, even just a decade ago, was more about brute force," said Herman, who is the CEO of San Francisco-based executive search firm Canvas. "In today's world ... people want to be motivated and inspired by model leaders."

While empathy is not a new word in the C-suite, it's certainly one more commonly heard today than it was years ago.

An empathetic leader, according to recent definitions, is one who demonstrates care, concern and understanding for employees' life circumstances.

Ninety percent of U.S. workers believe empathetic leadership leads to higher job satisfaction, while 79 percent believe it decreases employee turnover, according to an Empathy in Business survey from EY. Meanwhile, Forbes asserts that empathy may now be the most important leadership skill.

What is it about "today's world," as Herman put it, that places such an emphasis on being an empathetic leader?

It's partly because of the current labor shortage, which underscores the pressure on companies to appeal to job candidates and hang on to existing workers, executives say. It's partly because the pandemic, racial inequality and political upheaval have forced executives to understand how stress is affecting their employees.

It's also because the gig economy has shortened the tenures of most workers, who can easily bounce from job to job, inspiring companies to dream up ways to boost retention.

It's because social media has allowed workers to insist publicly on proper treatment for themselves, as well as for underprivileged and disenfranchised people and the environment.

And it's because rapid advances in technology have reshaped workers' expectations—especially younger employees accustomed to instant gratification, not shy about making demands and unafraid to speak up when they're displeased.

"In the industrial era, organizations were designed despite what it means to be human," said Michael Lurie, a partner with McKinsey & Company. "To succeed in the digital era, we must design organizations around what it means to be human. To do this does requires us to evolve as human beings. ... These higher levels of consciousness have been at the core of all human progress, and fostering this evolution among leaders is among the most powerful and meaningful aspects of the leadership transformation work that we do."   

Command-and-Control Leadership Is No More

​During the Industrial Age, it was common to treat people like commodities, Lurie noted. That, he asserts, is no longer possible in many industries.

As the world moved into a post-industrial economy, thanks to the "computer revolution," many employees began working with their hands, not their heads. And with automation and artificial intelligence, today, "the real source of value creation is human imagination and creativity, which only emerges in environments designed to enable people to thrive," Lurie said.

To engage and retain employees, he said, today's organizations "are learning to invite people to show up as their whole selves, to take care of their well-being, and give people the freedom and autonomy to connect, innovate and collaborate."

Michael Coar, the CEO and chairman of VirPack, a McLean, Va.-based provider of document management solutions for the mortgage industry, had an epiphany not long ago that illustrated what Lurie is talking about. It was at the height of the pandemic. He was on a Zoom call with a lower-level manager, and in the backyard, he could see an inflatable bounce house for children. The manager explained that when the call was over, he was going to play with his kids.

" 'Here I am paying this guy and he's sitting out playing in the backyard?' " Coar recalled thinking. "I had to sit back and look at my reaction. This guy is kicking butt at work. He is literally thinking up wonderful things and contributing in ways that he'd never done before."

Melissa Kehl is the CEO of Rieke Office Interiors, an office furniture company in Elgin, Ill. She sees this focus on work/life balance especially in younger parents.

"Back with my parents, they just went to work, they didn't play with their kids so much, maybe they went to one school play," she said. "Today, maybe it's because of marketing or all the self-help books we have, but ... parents are expected to play with their children, not just feed them and house them.

"I've always said, 'You don't miss a [child's] baseball game or a ballet recital,' even if it means you take off early and work later into the evening. I think all executives are having to [accommodate that]."

The expectation that executives consider the "whole person" in a worker dawned on Johnny C. Taylor, Jr., SHRM-SCP, when the Great Recession hit.

At that time, Taylor—now president and chief executive officer of the Society for Human Resource Management—was an HR executive at a different company. As CHRO, when a star employee suddenly stopped performing to her usual standards, he felt it was his responsibility to carefully document her performance and begin the progressive discipline process.

"That's how I traditionally approached it, from a risk-management standpoint," recalled Taylor, who said he had never watched workers experience the repercussions of an economic downturn before.

"She came into my office one day and just broke down in tears. She said, 'I know I'm not performing at the level I'm used to, but I'm now the sole breadwinner.' Her husband had lost his job. She was afraid of losing her house, [and] had to pull her children out of private school.

"I realized that she was not performing poorly. ... She was just performing less well than she had before. I had to step back and say, 'OK if she's now 8 out of 10 ... 8 out of 10 isn't bad, Johnny, so for this time, you need to understand what's going on in her world.'

"I began to pay more attention to the concept of the need to be an empathetic leader. I had to start focusing not on how I was experiencing 2008, but on how the people around me were."

Empathy in Leadership Makes Companies Stand Out, SHRM Research Shows

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When Mari Kemp, senior vice president of HR at Ease, a San Francisco-based HR and benefits software solution provider, started her career around 1996, there wasn't much emphasis on taking care of employees, she recalled.

"It was more like, 'Come here and work, and you'd better be happy to have a job,' " she said. "People were sort of like machines. It wasn't about feelings or emotions. Think about women: If they gave birth, there wasn't a lot of support for those events in life."

The command-and-control model of executive leadership—and the notion that one is lucky to have a job at all—may have been how corporate America grew up, notes Meg Newhouse, CEO and co-founder of Inspirant Group, a Chicago-based management consultancy. But she believes "it's evolved now."

"Humans are human, and they don't turn off what's happening when they get to the [workplace]. To expect people to do that is rather unevolved. To get the best out of a team of humans, you have to relate to them as humans, not like they're robots."

While education and enlightenment may have inspired workers to demand more from their executives, so has the rapid evolution of technology, which means organizations must compete for talented people who can choose to work for companies across the globe, without ever having to relocate.

"I'm competing for top employees with every company in the world," said David Kemmerer, the CEO of Coin Ledger Inc. (formerly cryptotrader.tax), which helps cryptocurrency investors prepare their taxes. "You'd better believe the employees have to be treated very well."