The Power of Empathy in Leadership: Building Stronger Teams and Better Businesses

“Empathy” has become a bit of a buzzword in the past few years. People include it with terms like compassion and emotional intelligence, while others claim to be empaths. But what does empathy mean exactly, and why is it being thrown around so often in the business world? Bringing empathy into the workplace, especially as a leader, can impact your team, company culture, and overall productivity. 

You might think that empathy isn’t an easy skill to incorporate into business and your leadership style, but you’ve likely already practiced empathy at one time or another. The skill itself seems to be innate and has been demonstrated in children as young as two in a study regarding empathy and its origins. 

How you bring empathy into business and the way you manage others can take time. However, it is a crucial skill to becoming a positive leader and greatly impacts your employees and business. 

Business And Empathy

Empathy can mean different things in different settings. Generally, it is the ability to understand where someone is coming from because you know the feeling. “Putting yourself in someone else’s shoes” is the most common phrase you may hear. Some people may experience very strong connections to others’ experiences and be viewed as an empath. 

Whether or not you identify as an empath, what truly matters is that you comprehend the mechanics of empathy and recognize its significance as a valuable business tool. And not only that, but it can also help you relate to others in your personal life. Empathy can help you understand the people around you and move through the world, able to comprehend actions and behaviors better because you understand the motivations and reasons behind them. 

Types of Empathy

To incorporate empathy in your business approach, the initial step is to grasp the three primary categories of empathy:

  • Cognitive empathy: This type of empathy enables you to comprehend someone else’s emotions by putting yourself in their shoes and perceiving the world through their viewpoint. It involves seeing things from various angles and comprehending another person’s perspective.
  • Emotional empathy: In contrast to cognitive empathy, emotional empathy involves sensing and experiencing the emotions of others as if they were your own. This ability doesn’t necessitate imagining oneself in someone else’s situation; instead, you feel the emotions directly.
  • Physical empathy: Physical empathy entails understanding and reacting to another person’s physical sensations, including both pleasure and pain. For instance, if someone describes a difficult experience, you may mirror their facial expressions or body language to demonstrate your understanding of their feelings.

Empathy Impact

Many people may assume empathy is already a part of their every day or that extra empathy in business doesn’t make a difference. However, this strategy in leadership can change more than how a business runs and its level of success. 

Many workplaces have suffered in the past few years due to Covid-19, burnout, inflation, and other issues. This has made empathy in the workplace all the more essential. During difficult times, when burnout and work-related unhappiness are common, empathy can be a powerful antidote that leads to positive experiences for both individuals and teams. A recent study by Catalyst showed a lot of benefits from a more empathetic workplace dynamic. 

  • Innovation: Employees who reported having empathetic leaders were 61% more likely to report being able to innovate, compared to only 13% of those with less empathetic leaders.
  • Engagement: 76% of employees who experienced empathy from their leaders reported being engaged, while only 32% of those who experienced less empathy reported the same.
  • Retention: 57% of white women and 62% of women of color were unlikely to consider leaving their companies when they felt their life circumstances were respected and valued by their employers. In contrast, when they didn’t feel that level of value or respect, only 14% and 30% of white women and women of color, respectively, were likely to stay.
  • Inclusivity: 50% of employees with empathetic leaders reported their workplace was inclusive, compared to only 17% of those with less empathetic leadership.
  • Work-Life Balance: When employees felt their leaders were more empathetic, 86% reported successfully juggling their personal, family, and work obligations, compared to only 60% of those who perceived less empathy.

Developing Empathy in Leadership

It’s essential to keep in mind that empathy is a skill that requires practice and time to develop. The more you practice it, the more proficient you’ll become.

To scale your business with sustainable systems that thrive, it’s crucial that your team feel comfortable sharing their thoughts and feelings openly. You hired each member of your team for a reason – because you recognized a creative and innovative spark in them that would serve as a valuable asset to your business.

Time to Listen

It’s common for individuals to want to discuss the problems they’re encountering. Yet, they may lack the confidence or know-how to articulate them, particularly in professional settings between colleagues or superiors. Employees may fear negative consequences or judgment for expressing their stress, anxiety, frustration, or burnout. As a leader, creating natural opportunities that encourage your team to voice their concerns or emotions is essential. By doing so, you can facilitate a safe and supportive environment where they feel heard and understood.

Providing more space for your team to voice their concerns also helps you better understand what is happening throughout your company and address issues before they develop further. Many people new to leadership may feel they must always be directing and offering insight, but listening can sometimes be a more useful and effective tool. 

Lead with Curiosity

To establish a connection with another person, it’s crucial to express curiosity about their background, personal experiences, distinctive viewpoint, and emotions. The key to achieving this is by asking questions. Rather than concentrating on your own affairs, set aside some time for others to share their experiences or express their feelings, whether it’s about a work conflict, a project, or any personal challenges they may be facing outside of work. 

It’s important to maintain a balance between showing interest without overstepping personal boundaries. Regularly checking in with them can help keep the door open for communication. Leading with curiosity and openness to new perspectives will show your employees that they can be open and honest with you and also feel more comfortable proposing new ideas. This can help your business benefit from new innovations and improve your company’s reputation and culture. 


When an employee shares a personal or professional experience that has impacted them, it’s important to acknowledge and appreciate their feelings. One way to do this is to express your understanding verbally. Additionally, you can use body language cues like nodding or tilting your head to demonstrate that you were actively listening and engaged in the conversation. As you consistently use these signals, they will become more natural and automatic.

Validation includes acknowledging the negative experiences as well as the good. Employees who feel celebrated and see their good work is noticed are more motivated to continue promoting the company. This helps with company culture, as employees feel more positive about work and enjoy it. 

Encouraging Empathy

Utilizing empathy in your day-to-day as a leader can impact current relationships and the future of your business. But you don’t have to stress about immediately implementing every note above. Leaders don’t need to be mental health experts to show that they care and are attentive to their employees’ well-being. Simply checking in, asking relevant questions, and following your team’s lead on how much they want to share can be sufficient. Additionally, leaders can educate themselves on the company’s mental health support resources to provide information and access to additional help.
Company culture and a positive workplace can boost productivity, and income, help with employee retention, and more. Empathy is a big part of that, but there are more things to consider if you want to change or improve your company culture. Contact Chris Dyer and his team to learn more about company culture. Chris Dyer is a remote work and company culture expert, providing businesses with all the best tools to improve work environments and success. Read more about improving your culture in The Power of Company Culture by Chris Dyer.