Why Empathy is the Most Important Business Skill

Looking for skills to help you expand your business? To many successful advisors, the most important business skill is not project management or multitasking, but empathy.

Empathy, defined by entrepreneur Joey Pomerenke as “the feeling that you understand and share another person’s experiences and emotions; and the ability to share someone else’s feelings,” isn’t always the first thing people think about when they consider business skills. But it is increasingly making it to the top of the lists of “soft skills” that managers and leaders need.

“Empathy should be embedded into the entire organization,” writes Belinda Parmar in the Harvard Business Review . “There is nothing soft about it. It is a hard skill that should be required from the board-room to the shop floor.”

For Akio Morita of Sony and Steve Jobs, developing empathy and observing how customers use products and services, and listening to them talk about the products and services they need, helps make developing product ideas easier. “Both Akio Morita and Steve Jobs were famous for never commissioning market research,” writes James Allworth in Harvard Business Review , who calls empathy the most important thing he learned at Harvard Business School . “Instead, they’d just walk around the world watching what people did. They’d put themselves in the shoes of their customers.”

Companies that don’t look at things from the perspective of their customers and competitors risk being disrupted right out of their industries, like Netflix did to Blockbuster, warns Allworth.

In fact, Harvard Business School professor Clayton Christensen, famous for his work on innovation and disruption , says it’s important to figure out the “job” that people are “hiring” a product to do—and that job may be very different from the product’s function. “FedEx, for example, fulfills the job of getting a package from here to there as fast as possible,” writes Carmen Nobel in the Harvard Business School blog Working Knowledge . “Disney does the job of providing warm, safe, fantasy vacations for families. OnStar provides peace of mind.”

However, for many advisors, understanding how their clients think and having empathy are not common practices. Perhaps this is a core reason why more than 70% of widows switch advisors once their husbands have passed away. Dan Richards concurs in his article on the future of women advisors that while the traditional results-driven approach to client communication is important, moving forward in a drastically different business world, “listening, empathizing and developing deep bonds will be pivotal not only in attracting and retaining clients but also in getting clients to stick to their plans.”

Inside the company, empathy helps with management and collaboration by helping to understand the other person’s perspective. Putting yourself in someone else’s shoes can make it easier to find a compromise between two points of view. Similarly, thinking about how other people might like to be treated at work can make them more productive.

“Many businesses use punishment and negative consequences so employees behave in a particular way,” Pomerenke writes. “Showing appreciation through benefits, coaching and development, incentives and genuine rewards sends the message that the business simply cares about the people connected to it.”


So how do you develop empathy, or increase the amount you already have? Here’s some suggestions from Martinuzzi’s book, The Leader as a Mensch: Become the Kind of Person Others Want to Follow :

  • Listen to people —not just their words but also their facial expressions and body language—without interrupting. And while you’re listening, pay attention—don’t use your phone or look at your watch.
  • Talk to people —ask them about their interests, pay attention to what they’re doing and praise them for what they’re doing well, and encourage them to speak up with their own ideas.
  • In addition to the above, it’s also been found that people who participate in role-playing games are more empathic. So it might be good to encourage a company game night!

    You might say, well, that’s fine for small companies that can afford to do all that handholding, but I work for a big organization and we don’t have time for all that touchy-feely stuff. But that’s not true, writes Parmar, who has researched which companies are the most and least empathic. “There is absolutely no evidence that being big automatically makes you un-empathic,” she writes. “Empathy is most definitely not a problem of scale, but more an indication of management priorities.”