I Hear You: Why CEOs Who Build an Empathetic Company Culture Succeed

By Candace Coleman, CultureWise Content Manager

When business leaders started to ease their companies out of pandemic mode earlier this year, they found themselves in a swiftly evolving employment environment. Their workers weren’t happy, and thousands were walking out the door.

Many CEOs adjusted to accommodate their staff’s newly expressed flexibility needs. And some offered more benefits and pay as they tried to stem a turnover rate not seen for years. But even with these calibrations, things have not gone “back to the way they used to be” in most organizations.

That’s because employees are still reeling from the effects of the past year and a half. The pandemic knocked people off-center, causing many to reevaluate their priorities, including why and where they work. In addition, the crisis worsened job-related mental health issues, workplace discord, and the often-distant relationships between C-Suite denizens and rank and file staff.

Consequently, executives are finding they need to do more than meet their employees’ tangible needs. There is also a growing call for compassionate leadership that prioritizes the human factor of the workforce.  For example, in a recent EY Consulting survey of over 1,000 American employees, 90 percent of respondents believe that empathetic leadership leads to higher job satisfaction.

What about Making Money?

Being a compassionate boss doesn’t mean making a profit is no longer a priority. On the contrary, empathetic leaders understand that tuning in to their staff members translates to higher productivity and more robust employee engagement.

In other words, compassionate leadership is good for business—a notion seemingly lost on authoritarians still holding fast to antiquated management techniques.

Beyond improving day-to-day operations and everyone’s work experiences, empathetic leaders are better positioned to face new challenges. A new report from Catalyst backs this up. It shows that 61 percent of workers with highly empathetic bosses report often or always being innovative at work compared to 13 percent of people with less compassionate leaders. 

As the study’s author Tara Van Bommel explains:

“Our findings demonstrate that not only is empathy an effective business strategy, it is a strategic imperative to respond to crisis, transformation, and a critical ingredient for building inclusive workplaces where everyone can belong, contribute and thrive.”

With the potential for such a win/win outcome, why aren’t the advantages of compassionate leadership apparent in more companies? The reason may be that despite having policies proclaiming to prioritize employees’ interests, many executives don’t effectively carry them out.   

The best way for leaders to authentically demonstrate that they see, hear, and are there for their staff is via their company’s culture.

Using Company Culture to Demonstrate Empathy

While many CEOs may have assumed their company’s culture was reasonably good before the pandemic, the crisis exacerbated any previously undetected deficits in this critical area. As they round the corner on COVID and evaluate the future, leaders should take a hard look at how they can become more attuned to their staff and align their company’s culture accordingly.

One critical point for leaders to understand is that developing company culture shouldn’t be delegated. Whereas everyone in the organization plays an essential role in maintaining the culture, the leader must exert what CultureWise CEO David J. Friedman calls “CEO sponsorship” of the initiative.

CEOs must define, model, and reinforce specific behaviors, especially those that demonstrate empathy, to achieve the kind of culture that gives employees a sense of security and belonging, makes them want to stay on board, and inspires them to excel. As Friedman points out in his book, Culture by Design:

“The CEO must be the biggest driver of the culture. They must be the one who’s most passionate about it and works to ensure that it’s one of the company’s biggest corporate priorities.”

Numerous positive behaviors performed team-wide create a strong culture. But the following three are imperative for leaders to embody and coach if they want to build stronger relationships with their staff:

• Facilitating two-way communication
• Cultivating respect and inclusion
• Establishing expectations

Two-Way Communication

Successful communication consists of two equally crucial parts: receiving and sending information. From an executive’s perspective in a business environment, these can better be defined as listening generously and allowing people to speak up.

Listening Generously

Too often, leaders concentrate on putting out information without considering how well they receive it from their staff. It’s impossible to be empathetic and get on the same frequency as other people without perfecting the art of listening. Many of the workers leaving their jobs are doing so because they never felt “heard” by their employers.

Often, leaders fail to hear their staff because they don’t recognize listening as a multi-faceted skill that they must consciously practice. It goes far beyond letting people “have their say.” Authentic listening is genuinely making an effort to understand what the other person is trying to convey. It involves setting aside judgment and fully focusing on what’s being said. Doing so is richly rewarding for both parties.

Professor Christine Riordan confirms this in Harvard Business Review:

“Among its benefits, empathic listening builds trust and respect, enables people to reveal their emotions–including tensions, facilitates openness of information sharing, and creates an environment that encourages collaborative problem-solving.”

Speaking Up

Of course, employees must feel comfortable expressing themselves for leaders to have the opportunity to listen to them. That means that CEOs aiming to be more empathetic must create a culture where it is safe for their people to respectfully voice their opinions. In a NeuroLeadership Institute blog, Chris Weller notes:

“Employees don’t keep quiet or speak up just because it’s their personality. Based on NLI’s review of the research on quality conversations, people will speak up in difficult situations only if their perceived threat is low. That means they feel psychologically safe and know that speaking up won’t result in punishment or retribution. If employees think there’s more to lose than gain, they’ll probably keep quiet.”

Employees will feel empowered to speak up if their boss encourages them to do so in an environment free of blame and snap-judgments.

Respect and Inclusion

Even though respect and inclusion are basic needs for healthy company culture, these qualities are scarce in many workplaces. For example, in a McKinsey & Co. study of financial services, technology, and healthcare companies, just 29 percent of employees had positive things to say about their organization’s level of inclusion.

And people who feel excluded feel disrespected. Frequently, inclusion issues result from inadequate acceptance of diversity (ethnicity, age, gender, etc.).  Leaders should be hyper-aware that the lack of inclusion and respect are leading reasons why people don’t stick with a job.

Many employers with formal diversity and inclusion (D&I) policies don’t understand why their companies aren’t perceived as more welcoming. Katharine Manning, the author of The Empathetic Workplace, explains that inclusion is so hard to achieve because it’s rooted in a dichotomy.

In an article for PsychCentral, she states: “To fit into a group, we must assimilate. To feel accepted, we must be our authentic selves.”  

The only way for coworkers to feel comfortable being themselves while also syncing with the team is for their leader to infuse empathy into the culture. A D&I policy means little unless people are coached to regularly and meaningfully behave in a way that brings it to life. Perhaps more than any other aspect of a company’s culture, it’s critical for the CEO to be the standard-bearer for this kind of conduct.

Establishing Expectations

Roughly, only half of all employees know what’s expected from them on the job, according to Jim Clifton and Jim Hartner, top Gallup executives and authors of Wellbeing at Work. That number should alarm business leaders because having unclear expectations is one of the leading reasons people are unhappy with their jobs.

Clifton and Hartner explain that bosses who are vague about what they want their staff to do aren’t merely annoying; they cause major worry and stress. Their employees don’t know if they’re succeeding or failing and spend considerable time second-guessing leadership. Consequently, productivity drops along with morale.

Empathetic leaders make a point to communicate all the information their staff members need to succeed at their jobs. Ideally, they initiate this level of transparency early in the onboarding process by providing each employee with a vivid understanding of their role in the organization and how they impact company goals.

After establishing this macro view, leaders need to follow up by conveying regular, timely, and explicit expectations for overall performance and specific deliverables. They should also give ample opportunity for employees to ask clarifying questions until everyone is on the same page.

This process establishes a pattern of accountability that gives staff members the best chance of performing well and feeling good about what they do. The benefits of prioritizing clear expectations within the work culture far outweigh the extra time it takes to remove employees’ uncertainty.

When leaders make an effort to think about the positive impact this kind of clarity has on their people, everyone comes out on top.

Empathetic Company Culture Elevates Everyone

CEOs who demonstrate the characteristics of empathy and infuse them into their company’s culture put their people first. In doing so, they not only make employees’ jobs better they also strengthen their organizations. Trust, understanding, compassion, and clarity are the pillars of a thriving culture—and a strong culture forms the rebar that girds companies for success.  

In Culture by Design, David Friedman explains the step-by-step process to cultivate extraordinary company culture that he developed in his decades as a CEO. His primary point is that for organizations to flourish, leaders must be as intentional and systematic about building their culture as they are about every other aspect of their business.

Learn more with a free, two-chapter download of this insightful book.

After successfully helping business leaders across the country improve their company culture, Friedman created the online CultureWise system to make it even simpler for CEOs to achieve this goal. The CultureWise program provides the tools to build a vibrant, meaningful culture that helps employers and those who work for them thrive.

Explore the CultureWise website to learn about this visionary process and stay informed about how culture influences every aspect of business with a complimentary subscription to Culture Matters.