Love it or hate it, empathy is the new required leadership skill

Maybe empathy should be the E in ESG.

It deserves to be, because empathy is a soft skill that delivers hard results.

Economic, workplace and health turmoil are spidering stress fractures through workplace culture and career expectations. The investment industry must retain and cultivate talent to fulfill its promises to investors, clients, business partners and communities. It needs an intravenous infusion of empathy to make that happen.

Empathy is the skill of thoughtfully responding to someone else’s emotionally charged situation. “In the workplace, it’s about appreciating a person’s circumstance in their work and their real life. When you know about the person’s personal circumstance and do a caring thing about it,” explained Barry Rosen, founder of Interaction Associates, a workplace culture and productivity consultancy. Empathy builds trust. Trust expands transparency. And transparency is essential for making wise decisions.

This is empathy’s moment. At the InvestmentNews 40 Under 40 event on June 17, keynote speakers mentioned empathy at least four times as a critical leadership ability.

Catalyst, the venerable women’s business advocacy group, has enshrined empathy as a new essential leadership skill, even floating the idea of a “chief empathy officer.” The rationale is that empathy drives inclusion, innovation and collaboration, said Tara Van Bommel, a statistician with Catalyst — but only if workplace culture doesn’t pigeonhole empathy as a women’s thing.

When empathy is defined as an inherent skill — usually inherent to women —the implication is that others are off the hook from cultivating it, Van Bommel said. But reframing empathy as a learned skill that improves with practice changes everything. “A big misconception is that empathy is a trait, and a female trait, but it’s not, it’s a skill, and anybody can build it,” she said.

The last two years have shattered any pretense to work-life boundaries. Children, elderly parents, cramped living quarters, personal work habits — there’s no hiding from the relentless intrusion of remote work, imminent illness and upended caregiving responsibilities. In March 2020, work-life boundaries dissolved and the move to hybrid work does not restore them.

Bosses know more than ever about how employees get work done — and daily complications to getting work done. That sightline must be framed by empathy. If it's not, staff will understandably try to hide responsibilities and work habits that might be construed as undermining their productivity and promotability.

Managers can’t manage what they don’t know about. Employees will not be transparent about all the factors that shape their ability to perform if they fear being judged, especially for circumstances beyond their control, like pandemic-inflicted household chaos or recession-inflicted relational stress. It’s empathy that builds the trust and transparency that informs managers with essential information for balancing workloads, allotting resources to get work done and ensuring workplace culture that supports sustainable efficiency.

That’s how empathy directly supports productivity and continual improvement. “Empathy is the tool that allows conversations to happen,” Van Bommel said.

And that’s why empathy cannot be ascribed primarily to women. It’s every leader’s responsibility.

“It’s going to be a challenge to de-gender this,” Van Bommel said. “I’d argue that with the level of disruption and change, it will only get worse. Empathy is what’s going to allow organizations and leaders to respond to that moment — and to understand the customer need: It’s a critical user experience skill, too.”

Expect empathy to be integrated into performance reviews and discussed as a discrete factor in talent development, retention and productivity. It’s coming — no matter how you feel about it.