Empathy: The missing link in transformational leadership…and profitability

How empathy can help you in business

Empathy: The missing link in transformational leadership…and profitability

Have you ever had an aggressive driver cut you off to merge into your lane, forcing you to slam on the brakes? Did you angrily honk the horn at them? Or worse? But what if you knew that the driver was rushing to the emergency room to meet the ambulance that was bringing her husband to the hospital? What if you knew that she’d just gotten back on the road after repairing a flat tire on the way to a job interview after being unemployed for six months?  Would that change your reaction? Would it make you yield more easily and even clear a path for her to get to where she was going?

What’s going on when you consider this scenario? Empathy. Empathy caused you to soften and yield because you can visualize how YOU might be driving in that same situation. And you start caring about her, hoping and praying she gets there in time. You start pulling for her. Oh, the power of empathy.

What is empathy anyway?

The Urban Dictionary defines it as “Being tuned in to the needs and feelings of another person.” Hmmm. How much of that stuff do you have for your employees? Does it matter?

When I took a risk and cashed out my 401K to launch my own business, there was little to indicate I’d be successful. I had only a high school education and no formal leadership training.  Heck, I’d never even READ a business plan, much less WROTE one. But what I had, in spades, was empathy. I knew what it was like to be a hardworking, dedicated employee – only to be ignored and marginalized by my company. A company that didn’t seem to care about me. About what it was like to be a single mom, working doggedly to make their company a success, while juggling daycare, paying the bills…you know the drill.

There was also a seeming lack of empathy for the customer. You see, the quality of products and services we provided was steadily declining. So much so that I became a professional apologist, constantly fielding the calls from angry customers in our B2B business. And I saw no evidence that my boss cared about the negative effects of our service on the customer and their clients.  The lack of empathy is what caused me to leave that company and to start a business in my basement, competing with them.

About that time, I read the book Nuts about how Southwest Airlines was launched with the idea that if the company took great care of the flight crew, they’d be happy and attentive to the passengers, and the passenger would be happy as a result. And then, the happy passengers were loyal to Southwest, causing them to be outrageously successful even as other airlines faltered. As Herb Kelleher, the Southwest founder stated: “A company is stronger if it is bound by love rather than by fear.”

I took that lesson to heart and deliberately chose an empathic, employee-first model for my company, LetterLogic. It wasn’t about buzzwords on a mission statement. It was something we lived daily. It was a core differentiator that allowed us to emerge (and get out of the basement) as an industry leader and, in the process, challenge preconceived notions about how organizations should think of their talent. (And yes, I use that word “talent” deliberately when talking about our people).

LetterLogic received a lot of media attention over the years for our generous approach to supporting our people. The press took note of our fair wages, our transparent financials, and our unorthodox (and oh so powerful!) approach to monthly, equal profit sharing. But much less ink has been spilled on the key element that was the core, the key to those moves: Empathy.

Can you build empathy at work?

Walk among your employees today and wonder to yourself: “What unique challenges did she face on the way into work this morning? What is his household like at night when he comes home from work? What dreams are they putting on hold to work in this company…just to pay the bills and keep the kids fed? What policies have I put in place that make their job harder? What is one thing I could do to make her happier and more productive in her work?” When you start putting yourself in their shoes, you’ll likely see ways in which you can be a better leader, a leader that people want to follow.

At LetterLogic, we didn’t offer assistance to first-time homebuyers because some playbook told us we should; we did it because I recall the feeling of liberation, of exhilaration when I was handed the keys to the first home I owned. It was such a turning point! It was the key to building a stable financial foundation and peace of mind that enabled me to be a better mom, a better employee, and a better citizen.

When we moved to make our minimum starting wage $16 an hour even though the State of Tennessee would allow us to pay only $7.25, it was because we reflected on what our employees would need to be able to pay their bills, have their kids live and play in a safe neighborhood, and have enough left over to be able to save for their retirement. Why? I remembered how it felt to live in a hot apartment without electricity because I couldn’t afford to pay for daycare AND the power bill. I remembered being worried sick about whether or not I had enough gas in my car to get home after work; how that paralyzed me and prevented me from being able to focus on my job. Empathy was the underlying trait that compelled me to make sure our people were truly paid a fair living wage.

When we determined, early on, to share the profits with our people monthly, it was empathy that drove us to make the distributions even, giving every person the same dollar amount, regardless of title. We wanted every person to know that their work was equally critical to our success, whether they were the receptionist or the CTO – creating an environment that put the employees on an equal footing, which made them more empathic too!

When I created formal and informal opportunities to listen to employees, to ensure they had a voice in our decisions, it was born from empathy, remembering how it felt to be so passionate about my work but having my boss scoff at my ideas. That memory was why I launched a practice we called “Lunch with Lucy,” whereby on Wednesdays I became my alter-ego, Lucy, and any employee could have lunch with me to talk about THEMSELVES. They’d pick the restaurant and who else (if anyone) would be with us at the table, and I’d listen to them. I learned so much! It was the most important time I spent each week.

What were the results of all this caring?

These tactics enabled us to grow fast enough to make the Inc. 5000 list for 10 consecutive years, and to grow, debt-free, to a $40 million company. It enabled us to be the most expensive in the business, with a net promoter score of 97.

Yes, empathy is innate, with some scientists arguing that you either have it or you don’t and that it can’t be taught. I argue, however, that it can be contagious, that you can absolutely infect others with your caring – that by leading the way, you can model empathic behavior, creating a ripple effect in your company. I saw it happen. LetterLogic paved the way.


To read more about how empathy leads to profitability, make sure to pick up Sherry’s book “Lunch With Lucy: Maximize Profits by Investing In Your People” today!