Compassion in Business Yields Positive Results

Business leaders acknowledge the importance of empathy in the workplace
June 15, 2017 Updated: June 15, 2017

The move by United Airlines to drag a passenger off an overbooked flight in April evoked public resentment and anger. Compounding the damage was the company’s failure to show immediate compassion for the victim.

In the digital age, it has become harder for companies to control adverse publicity. Increasingly, business leaders are recognizing that corporate scandals are best handled through sincerity and compassion.

“When we first started talking about emotional intelligence, compassion, and empathy back in the early 2000s, we had to argue our way into the boardroom. People were dismissing them,” said Annie McKee, co-author of the book “Resonant Leadership” and senior fellow at the University of Pennsylvania.

Over the last decade, however, companies have become more aware of what researchers on workplace relations have already been finding. A plethora of studies reveals that acting with compassion in the workplace creates a positive culture that benefits both employees and customers. It may also even improve the performance and bottom line of an organization.

Christina Boedker, associate professor at the University of New South Wales in Australia, conducted research on the connection between leadership and organizational performance. Based on data from more than 5,600 people in 77 organizations, Boedker concluded that empathetic and compassionate leadership boosts profitability and productivity in an organization.

The Global Empathy Index also suggests that empathy impacts the financial performance of a company. The top 10 empathetic businesses in the index generated 50 percent more income than the bottom 10 in 2016.

The index, which tracks 170 companies mainly in the United States and the United Kingdom, bases its rankings on CEO performance, company culture, ethics, brand perception, and social media presence. It also measures how well these companies treat employees and communicate with customers.

According to the index, the top three most empathetic companies in 2016 were Facebook, Google’s parent company Alphabet, and LinkedIn.

The practice of compassion in a corporation improves employee performance and retention. 

“Empathy, which is compassion in action, is a competency that enables leaders to influence the people around them more effectively,” said McKee.

Leaders who have this competency can build strong and loyal teams, she said.


Some business leaders still back an authoritarian, aggressive approach to dealing with employees; this is seen as “efficient.” Softer traits like empathy and kindness are linked to vulnerability.

But, says McKee, “in fact, they are some of our greatest strengths.”

About 27 percent of American workers—about 37 million people—have been bullied at work, according to a survey in 2014 by the Workplace Bullying Institute. Such bullying reduces creativity and morale in the workplace, leading to high staff turnover.

Compassion is an emotional experience that impacts our brains in a positive way.
— Annie McKee, author and senior fellow, University of Pennsylvania

An increasing number of leaders acknowledge that compassion is a better managerial approach than aggression.

“Compassion is an emotional experience that impacts our brains in a positive way,” McKee said.

It minimizes stress hormones and activates the parasympathetic nervous system, she said.

This in turn moves people into a more relaxed state of mind and keeps them healthy and psychologically sound, enabling them to think better.

Learning Compassion

Compassion is not a fixed trait—it can be learned. Leaders can gain empathy through coaching and training.

Roberta Matuson, president of Matuson Consulting and author of the book “The Magnetic Leader,” has coached a number of leaders who wanted to be more compassionate in the workplace.

“There was a lot of tough love along the way, but eventually they got it,” she said.

Studies show that human beings are innately caring and kind. Over time, however, people unlearn compassion, said McKee. In the work environment, people are generally rewarded for individualism and short-term goal attainment.

“We need to reward people for behaviors that put others before self and broaden our understanding of what success really means,” she said.

The workplace culture starts with individuals at the top. According to McKee, a culture change can happen only if the most senior leaders adopt values they want to see in others.

LinkedIn CEO Jeff Weiner is an advocate for compassionate managementThe idea of seeing things clearly through another person’s perspective can be invaluable when it comes to relating to others, particularly in tense work situations, he says.

“Compassion can and should be taught, not only throughout a child’s K-12 curriculum, but in higher education and corporate learning and development programs as well,” he wrote in a 2012 article posted on LinkedIn.

“I can’t think of a more worthwhile thing to teach.”

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