Op-Ed: This quality may seem soft, but it makes for effective leaders

Bill Gates
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Bill Gates

As many young people prepare to graduate from college this spring and enter the working world, many of them are likely to hear their commencement speakers advise them, with a growing urgency, to cultivate one particular skill: empathy.

Empathy has been a recurring theme of many high-profile commencement speeches in recent years, including a 2016 speech by Steven Spielberg at Harvard University, a 2014 speech given by Bill and Melinda Gates at Stanford University, and several speeches given by former President Barack Obama. In fact, the topic of empathy has dominated workplace conversations in recent years, as has been reported by the Harvard Business Review and others.

Why all the interest? In a word: technology.

Every job that can be automated is — or will be in the not-too-distant future. As a result, organizations are shifting focus to the jobs that depend on interpersonal skills, ones that machines and software are unlikely to replace.

Empathy is the ability to identify with or understand the perspectives and emotions of others. It is about being able to comprehend and share another individual's emotional state.

One study found that occupations enjoying the highest job and wage growth since the 1980s are social skill-intensive. These social or "soft" skills are now critical differentiators that distinguish organizations as both employers and competitors. At the same time these social skills are becoming more critical, leaders' ability to use them is on the decline (our own research shows that only four out of 10 leaders do them well).

There are likely many reasons for the decline of social skills, but the most plausible villain is technology itself. Ironically, a leader in the telecommunications industry told us that the very smart devices they sell have eroded the ability to truly empathize.

Recently, DDI completed a leadership analysis from data collected over five decades across 156 organizations and in over 40 countries. As part of our research, we zeroed in on the empathy levels of over 18,000 leaders. A key goal of the research was to really find out if empathy is just a "nice term" or does it make a real economic difference in the workplace. Here's what we found:

1. Empathy is the foundation of multiple leadership skills

Empathic leaders are far more likely to be better at a host of other leadership skills, like coaching, engaging others and planning and decision-making. But make no mistake, an empathic leader is not about being lenient or laissez-faire. Leaders rated high on empathy by their direct reports were 2.5 times more likely to hold others accountable for maintaining high performance, and four times more likely to impose formal consequences when employees are underperforming.

2. Empathy drives employee engagement

Dozens of studies have shown that employee engagement is a critical factor that affects multiple business outcomes, including turnover, absenteeism, safety, product quality, customer satisfaction, productivity, sales, and profitability. Empathy, as it turns out, plays a big role in leaders' abilities to engage their employees. Direct reports who rate their leaders as high in empathy are also more likely to report that their leaders have increased their own level of engagement (see Figure 1).

Figure 1: The relationship between empathy and engagement — as reported by leaders' direct reports

    3. High empathy leaders accelerate business performance

    We compared two groups of leaders from our research: those that showed substantial improvement in empathy skills after a training intervention, and those that did not. As can be seen in the figure below, leaders in the "improvement group" showed a much higher impact than the "no improvement" group across a number of metrics.

    Figure 2: The relationship between improvements in empathy and business outcomes

    There are thousands and thousands of definitions of and theories about leadership. We like to think that the best leaders excel at having positive and meaningful human interactions within and outside their organizations. Empathy, in turn, is the fuel for those interactions. Those leaders who master empathy become better leaders — leaders who are able to inspire others and impact their businesses.

    Mike Kemp, Ph.D., is a senior research consultant in DDI's Center for Analytics and Behavioral Research (CABER). Richard S. Wellins, Ph.D., is senior vice president at DDI and focuses on improving leadership talent. He is a co-author of DDI's Global Leadership Forecast. Organizations can participate in the 2017|2018 Global Leadership Forecast and receive a complimentary leadership benchmarking report by visiting http://www.ddiworld.com/glf-survey. DDI is the research partner of CNBC for the annual Asia Business Leaders Awards (ABLA).