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How Empathy-Based Leadership Can Transform Your Teams and Businesses Empathy-based leadership is increasingly recognized as a valuable approach in the business world, where traditional strategic plans often fall short.

By Martin Rust Edited by Micah Zimmerman

Key Takeaways

  • By prioritizing empathy, businesses can significantly improve employee engagement, reduce attrition rates and achieve superior outcomes.

Opinions expressed by Entrepreneur contributors are their own.

By now the expression "the new normal" should be familiar to us all. It's used to describe the profound changes in our daily lives, including where and how we work. It also describes the overall societal functioning that has settled into place following significant global events, such as the pandemic, ebbs and flows in the economy and geopolitical conflicts that seem to drop out of the sky.

This term also includes adjustments in how we communicate, conduct business and interact personally and professionally. What was once considered one-off occurrences have now become expected, reflecting a shift in behaviors, expectations and norms that are accepted as the baseline for moving forward.

This new normal complicates the business landscape, affecting supply chains, market accessibility and the behavior of employees and suppliers. Given these challenges, it's imperative for traditional strategic frameworks to undergo an overhaul to safeguard resilience and sustained prosperity.

The fallacy of strategic plans

Work culture has undergone a seismic shift. The changing dynamics of workplace locations and the motivations behind work have rendered numerous conventional business models and strategies redundant. Today's workforce seeks more than just routine; they yearn for purpose and the chance to be part of growth and lifelong learning.

Moreover, a glaring disconnect persists within many traditional strategic plans. Their extensive timelines and meticulous details often misalign with the fluid nature of real-world challenges, which are prone to abrupt changes. This dissonance makes it difficult for employees to envision their roles, widening the gap between executives, managers and their teams.

Extensive evidence highlights the shortcomings of strategic plans. A 2022 Harvard Business School study revealed that 60% of strategic plans fail to meet expectations, yielding poor outcomes. Moreover, 95% of employees questioned in the same study could not articulate or understand their organization's core strategies. Compounding these issues, a study conducted by McKinsey and Company found that only 30% of executives are convinced that their strategies are effective.

And while many companies are beginning to see the light about the failure rate of strategic plans, many are unsure what to put in their place.

Related: How to Be the Empathetic Leader Your Team Needs

Attrition is expensive

According to a 2022 Gallup survey, only 23% of U.S. employees feel engaged in their company's mission and see themselves as co-contributors to the company's successes. Because strategic plans tend to sideline the heart and soul of any organization — the employees expected to carry them out — it should be easy to see the correlation between failed strategic plans and disengaged employees.

Attrition is not just a line item on an HR report; it's a symptom of a deeper dysfunction within the organizational fabric. Also in 2022, Gallup published a survey revealing that disengaged employees cost the global economy $8.8 trillion annually, a testament to the high price of ignoring employee happiness. But what if I told you that the antidote isn't found in more rigorous performance management but in something as basic as empathy?

Related: Does Empathy Have a Place in Your Workplace?

The importance of an empathy-based approach to running a business

In all that we encounter, from the significant to the seemingly inconsequential, it's crucial to acknowledge that at every turn, it's about the people. In my experience interacting with communities in conflict and post-conflict zones, understanding is vital, particularly when we're poised to make key decisions. Empathy ought to be the guiding force behind our every action, steering us through each decision we face.

Navigating these pivotal moments requires a grasp of what matters. It might appear obvious, but amidst the chaos of daily challenges, this lucidity enables us to sift through the noise and distractions, honing in on what's essential: the well-being and consideration of those around us.

However, in my experience, true understanding extends beyond mere realization. It involves active listening—absorbing what others express and endeavoring to perceive the world from their perspective. This level of empathy sheds light on what's important and molds our decisions in a way that resonates with our deepest values.

Empathy-based leadership, a concept I explore through various anecdotes in my book, From War Zones to Boardrooms: Optimize the Moment When Strategic Planning Fails, is about seeing beyond the immediate tasks and understanding the aspirations, challenges and emotions of those we work with. It's about creating an environment where employees feel genuinely seen and heard, which I've found to be a powerful motivator for loyalty and engagement.

It's about hearing the unsaid, recognizing the effort behind the results and understanding the context of so-called failures. This approach has not only helped me build stronger connections with my team but has also fostered a culture of trust and openness in my consulting practice.

Related: Try This Approach to Create an Enriching and Caring Workplace

Another key aspect of empathy-based leadership is adaptability. Recognizing that each team member is unique and may require different approaches to feel supported and motivated should be foundational. A common expression among young people is "meeting people where they're at." It speaks truth and wisdom. By adapting our leadership style to meet these diverse needs, we can create a more inclusive and supportive workplace environment.

When we approach challenges from a place of understanding and compassion, we're more likely to uncover the root causes of issues rather than just addressing symptoms. This can lead to more sustainable outcomes and a stronger sense of collective ownership over them.

Perhaps the most compelling argument for empathy-based leadership is its impact on business outcomes. Leaders who show more empathy toward their direct reports are viewed as better performers by their bosses. Empathetic leadership can lead to increased employee engagement, higher morale and improved productivity and innovation.

Martin Rust

Entrepreneur Leadership Network® Contributor

Corporate Consultant

Martin Rust is a consultant working with governmental agencies in Canada and Fortune 100 companies. His practical approach to delivering outcomes leans on over two decades of experience gathering intelligence, analyzing data points, and objectively determining the best path forward.

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