Magazine article Phi Kappa Phi Forum

For Executives, Empathy Means Dollars and Sense

Magazine article Phi Kappa Phi Forum

For Executives, Empathy Means Dollars and Sense

Article excerpt

Name the most important ability for business executives. In wake of the recession, where the bottom line rules, you might answer: generation of revenues over expenses. You'd be half right.

Soft values like empathy also drive hard results like profit.

Bosses who are good "people managers" produce better strategic and financial performance than supervisors who are not, according to a recent study by Green Peak Partners, an organizational consulting firm, and a research team at Cornell University's School of Industrial and Labor Relations.

To some, empathy suggests niceness, allowing for the possibility of being taken advantage of or the dulling of the internal determination, not to mention the competitive edge, crucial for success. Thus, the argument goes, administrators should be hard-charging, not sugar-coaling. Although individual cases can of course be made for that approach, the study disproves these general assumptions.

Among the findings, based on input from 72 senior executives at 31 companies with $50 million to $5 billion in annual revenue:

* Bullying, often regarded as part of a business-building culture, signifies technical incompetence; ineffective leadership; mishandling of talent; and lack of vision.

* Poor interpersonal communication translates to underperformance in all executive functions.

* The more organizations an executive has worked for, the less able the executive is to deal with employees. Ambition aside, job-hopping tends to indicate running away from one's problems, perhaps regarding insufficient perspective on causes and effects of decisions made when in a position of authority.

Psychologist Daniel Goleman, author of the bestseller Emotional Intelligence, anticipated these conclusions years ago. "Empathy is particularly important today as a component of leadership for at least three reasons: the increasing use of teams; the rapid pace of globalization; and the growing need to retain talent," he wrote in "What Makes a Leader?" in the November-December 1998 edition of the Harvard Business Review. But the very word "empathy" seems "un-businesslike, out of place amid the tough realities of the marketplace," he observed.

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Along these lines, when employees disappoint or other problems arise, managers may struggle between coming down hard on them or rooting them on. University of Amsterdam social psychologist Gerben van Kleef and colleagues demonstrate in a forthcoming study in Psychological Science that cheerleading generates better performance. Why? Because mental fatigue and time pressure in stressful situations make team members more likely to respond to the leader's mood than think carefully about the message. And people don't react well to fear, anger, coldness, authoritarianism, or other negativity.

Plus, direct and indirect costs of employee turnover (from the position search to less productivity, more overtime, low morale, and employee burnout/ absenteeism during the process) impact profitability and image--and calculate, in the private sector, up to 150 percent of the annual remuneration package for each replaced worker, estimate experts Leonard A. …

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