Not just for the kudos — Empathy will make your business money

How would you start if you wanted your team to show more empathy? Would you draft new policies about hiring?

Set rules related to communication? Good policies aren’t a bad way to get on the same page, but it’s the little details — like email habits and even what you wear to work — that really matters, says Belinda Parmar, Founder of  The Empathy Business.

We asked Belinda how leaders can dramatically shift a corporate culture to incorporate more empathy.

Making the business case for empathy

@lena_otvo via Twenty20

Parmar’s firm created an “Empathy Index” that ranks companies on metrics like employee perceptions of the company, diversity and inclusion initiatives, and on environmental factors including carbon emissions, forestry and water usage. It has found a direct correlation between high empathy and strong business performance.

Whatever way you cut the numbers, more-empathic companies deliver more results to shareholders – There is a financial argument.

Belinda Parmar

One reason may be that employees at empathetic companies are more productive. “We found that people on teams with higher empathy levels are much less likely to be off sick,” she says. In other words, empathy keeps people working.

Focusing on culture

Most leaders would like to helm an empathetic culture, but moving past the stats and shifting the culture employees actually experience is hard work. Parmar says that companies are always armed with stats about their diversity, for example, but “it’s not about getting more women through the door. It’s about creating cultures where women thrive.”

I think companies, particularly in Silicon Valley, need to forget the bean bags, the pool tables, and start thinking about the small things they can do to make sure that women feel that they belong.

Belinda Parmar

In other words, creating an inclusive culture isn’t about the benefits you offer, she says. “When you ask CEOs this question, they talk about their maternity policy. It’s not about the maternity policy. It’s about things like a culture where I feel I can say what I like, a culture that isn’t dominated by politics, a culture that doesn’t normalize very masculine behaviors.”

@lucvsc via Twenty20

Digging into the details

Parmar’s company finds examples of empathy in unexpected places. Who would guess that the way employees write an email would affect the overall culture? But, she says, “we found hidden indicators of empathy in things like the proportion of BCCs [blind copies of emails]. If a company has a high level of blind copies, they have a culture of disempowerment and lack of transparency.”

Plus, Parmar and her team examine how employees spend their time. “We look at things like company politics. We ask all the employees, ‘What percentage of your time are you spending on company politics?’ You would not believe the results. It’s huge.” These hidden factors of empathy are much more indicative than stats about NPS or other popular PR numbers, she says.

Building little nudges

Parmar focused on little tweaks. “A lot of the things I do, they’re tiny,” she says. “They’re nudges. They’re taken from behavioral science, but in aggregate they start to change a culture.”

Here’s an example: The firm was working with a luxury car manufacturer. Leaders knew there was an “empathy deficit” in the way they sold cars. Parmar’s firm measured the company’s empathy and found that the deficit wasn’t in the way dealers were selling cars in the showroom — it was the environment customers walked into.

Once you understand that tiny details all build to a larger culture, you can start thinking about how you change people’s behavior.

Belinda Parmar

“One really simple thing is the car dealers were wearing ties. Now, when you walk into a car dealer, a tie says to you, if you’re a customer, I’m going to sell you something. That was creating a feeling of ‘I don’t feel safe here.’ ”

The firm recommended a series of 10 small nudges, including changing the salespeople’s wardrobe. “The simple fact of changing the attire of the car dealers, in some of the environments, increased sales by 23 percent,” she says.

When Parmar’s firm worked with one of Europe’s biggest banks, they set up a four-person “empathy nudge unit” at the organization. The group was tasked with looking at every detail — from the way employees submitted expenses to how they wrote letters to customers — to find opportunities to build empathy. Put people behind the strategy and empathy at the heart of the business,” she says.

Parmar says she’s learned that people aren’t generally un-empathetic. Most leaders are good people who want to do good work. But, she says, “the culture in which they work is un-empathic. They normalize un-empathic behaviors. Look at the culture, the process, the system. We don’t need to change the people. We need to change the environment within which the people work.”