Organisational health authority Pat Lencioni once urged leaders to be "exceedingly human" during the pandemic.

Now, as we embrace artificial intelligence to drive efficiency and innovation, we're often urged to make our workplaces "more human."

It made us think about this. Where do the very human traits like empathy sit in a world where AI adoption is an urgent priority for leaders?

As tempting as it is to leverage the efficiency of AI, the human quality of empathy is still needed to create meaningful relationships with both customers and employees.

Here we discuss how technology is changing how we work, and, thus, why the ability to understand the feelings of customers and employees is more valuable than ever before.

Empathy in leadership is the ability to understand and share the feelings, perspectives, and experiences of others. It is “stepping into the shoes” of others, and seeing the world through their eyes.

Empathetic leaders create environments where both customers and employees feel valued, understood, and supported. They recognise that behind every interaction is a human being with unique needs, concerns, and aspirations.

In his book "The Relationship Economy," John R. DiJulius says of modern business: "The most important asset needed to truly connect with customers is the ability to empathise, yet AI solutions are incapable of placing themselves in another person's shoes."

When I asked Anthropic Claude AI about the capabilities and limitations of AI around empathy, it answered:

“While AI can analyse customer data patterns and simulate empathetic responses based on programming, it fundamentally lacks the lived human experience and emotional intelligence needed to genuinely empathise - creating an opportunity for leaders who cultivate authentic understanding to build connections that technology simply cannot replicate."

The competitive advantage now lies in the ability to provide what AI cannot - genuine understanding and emotional intelligence.

I once handed my handbag into a department store for a repair under warranty. When I returned a couple of weeks later the store told me they'd lost it. They offered a store credit - but only at the initial reduced price of the bag (which now wasn't enough to replace the bag). No-one was interested in replacing the lost bag. This, to me, showed a lack of empathy - and it broke my trust with that store.

Conversely, an empathetic relationship is positive for trust, and a lot more:

• Deeper Customer Loyalty: When customers feel understood and valued, they develop stronger attachments to your brand
• Better Problem Resolution: Empathetic approaches to customer issues lead to more satisfying resolutions and turn potential negative experiences into positive ones
• Valuable Feedback: Customers are more likely to provide honest feedback when they feel you genuinely care about their experience
• Competitive Differentiation: In a world of automated interactions, meaningful human connections stand out
• Word-of-Mouth Marketing: Customers who experience empathy become advocates who share their positive experiences with others

Will Guidara, in his highly readable book "Unreasonable Hospitality," shows the ripple effect of going above and beyond standard service through deep empathy. Guidara's award-winning restaurant grew a following by creating memorable experiences that showed true understanding of individual customer's needs and wants.

He describes how his team at Eleven Madison Park would research guests before their arrival, looking for personal details that could be used to create customised experiences. This "unreasonable" level of attention and personalisation stemmed from a foundation of empathy - the ability to anticipate what would bring joy or comfort to another person.

Will Guidara's stories show that when we take the time to understand others deeply, we can create experiences that transform transactions into relationships.

Empathetic leadership extends beyond customer interactions to the way we engage with our teams. Leaders who demonstrate empathy with their colleagues create psychologically safe environments where employees feel valued, understood, and motivated.

Benefits of Empathetic Employee Relationships:

1. Increased Engagement: Employees who feel understood are more invested in their work and the organisation's success
2. Higher Retention: People are less likely to leave organisations where they feel valued and understood
3. Enhanced Collaboration: Empathy breaks down barriers between team members and departments
4. Greater Innovation: Psychological safety created by empathetic leadership encourages risk-taking and creative thinking
5. Improved Well-being: Employees experience less stress and burnout when their leaders demonstrate understanding and support

Identifying and hiring empathetic individuals is crucial for building a culture of understanding and connection. Here are strategies for identifying this vital trait:

What to Look For:

• Active listening skills and the ability to paraphrase others' perspectives
• Curiosity about others' experiences and viewpoints
• Emotional intelligence and self-awareness
• The ability to consider multiple perspectives
• A track record of building strong relationships

Interview Questions to Assess Empathy:

"Tell me about a time when you had to understand someone else's perspective to resolve a conflict."

"Describe a situation where you needed to adapt your communication style to connect with someone different from yourself."

"How do you ensure team members feel heard and valued during discussions?"

"Share an experience when you recognised someone was struggling before they explicitly said so. How did you respond?"

"What approaches do you use to understand customer or colleague needs more deeply?"

In "Quietly Powerful," author Megumi Miki introduces us to a leadership style that naturally incorporates empathy. She explains that quietly powerful leaders are "purposeful, comfortable and present." Their effectiveness stems not from dominance but from deep understanding.

"They don't develop a sense of entitlement or self-importance; they remain humble and aren't poisoned by power - thinking that they are better than others," Miki writes. "They haven't lost empathy for others; they have an ability to listen and show respect to everyone regardless of rank and position. Humble leadership comes naturally to them."

Empathy isn't loud or demonstrative; sometimes it's most powerful when quietly woven into everyday interactions and decisions.

Several prominent leaders across the globe have demonstrated the power of empathy in their leadership:

Satya Nadella (Microsoft): Since becoming CEO, Nadella has transformed Microsoft's culture with empathy at its core. In his book "Hit Refresh," he stated, "Empathy makes you a better innovator. If I look at the most successful products we've created, it comes from the deep empathy with our users' needs."

Mary Barra (General Motors): When facing a major recall crisis, Barra demonstrated empathy by personally meeting with families affected by faulty ignition switches. "I never want to forget the faces and the voices of these family members," Barra said in a company address, emphasising that understanding customer experiences would drive safety improvements.

Richard Branson (Virgin Group): Known for his people-first approach, Branson has consistently emphasised empathy: "If you take care of your employees, they will take care of your business. It's as simple as that."

Dame Sharon White (John Lewis Partnership): White has reinforced the company's empathetic approach to both customers and employees, stating, "Understanding what matters to our partners and customers is fundamental to everything we do."

Stan Sthanunathan, (retired EVP of CMI for Unilever): In an article for Discuss with co-founder Jim Longo, Stan said of empathy: "No consumer ever wants a marketer to feel sorry for them. They want marketers to understand who they are and how to meet the problems in their life – this is empathy."

Like any leadership skill, empathy can be developed with conscious effort:

• Practice active listening: Focus completely on understanding rather than formulating your response.
• Ask meaningful questions: Move beyond surface-level conversations to understand others' experiences and perspectives.
• Seek diverse viewpoints: Intentionally engage with people whose backgrounds and experiences differ from your own.
• Recognise and manage your biases: Be aware of how your own experiences colour your perception of others.
• Create space for emotions: Allow yourself and others to acknowledge feelings as valid and important data.

In an era where artificial intelligence handles increasingly complex tasks, our uniquely human capacity for empathy becomes our greatest strength as leaders. By cultivating deeper understanding of both customers and employees, we create connections that technology cannot replicate.

The most successful organisations of the future will be those that balance technological advancement with human understanding - combining efficiency with empathy to create experiences that resonate on a profound level. As leaders, our ability to genuinely understand and connect with others is a foundational human trait that will lead to sustainable success in the relationship economy.

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Photo by Evgeniy Alyoshin on Unsplash