When a Company Lacks Empathy

Some business executives dismiss the need for empathy, favoring the more concrete and defensible virtues of rational analysis. They have a point. So did Blockbuster executives when faced with Netflix’s debut.
Blockbuster witnessed Netflix’s dramatic growth in the very early 2000s and chose to do nothing. Company leaders saw the world from a solitary vantage point: atop a $6 billion business with 60% margins, tens of thousands of employees and a thriving nationwide retail chain.
Blockbuster’s management team certainly didn’t view the world from its customers’ perspective: late fees that drove renters up the wall, a limited range of movies that eschewed anything that wasn’t a new release.
Netflix’s ultimate market domination is a cautionary tale for other complacent companies. The Blockbusters of the world go belly up because they sell what they want to sell – not what their customers want to buy.
Empathy helps companies stay grounded. Face-to-face encounters with the people you serve provide context for market research and other data.
The Way Things Used to Be
Overly simplified, abstract information often carries authority inside organizations. Knowing and understanding your customers is the antidote.
“The problem with business today isn’t a lack of innovation; it’s a lack of empathy,” writes Professor Dev Patnaik in Wired to Care: How Companies Prosper When They Create Widespread Empathy.
Empathy is the ability to step outside yourself and see the world as other people do. For some companies, it’s also a rarely discussed engine for growth.
Harley-Davidson gets it right. The company hires fans and publicizes its connection with consumers. Leaders work hard to stay in touch with consumers’ changing needs.
This is the way business used to be conducted two centuries ago. For thousands of years, craftsmen made things for people they knew. Tailors, cobblers and other tradesmen understood what their customers wanted.
This approach ended with the Industrial Revolution. As more goods were mass-produced in factories, suppliers and consumers experienced a growing rift – one that we’ve been struggling to repair ever since. It’s much harder to succeed when you create products for people you don’t know – individuals whose lives seem alien to yours or who are halfway around the world.
In the work you do at your company, in what ways do you see a lack of understanding of customer’s complaints? Where do you see a need to shift attention and empathy? I’d love to hear from you.

In Your Customers’ Shoes

What’s the best way to keep an eye on what your customers need and want? I’ve been reading a lot about empathy in Wired to Care: How Companies Prosper When They Create Widespread Empathy, by Dev Pataik and Peter Mortensen. The authors make a case for better customer contact in business strategy planning.
Modern technological improvements in data-mining provide strategic plans, sales forecasts and manufacturing reports. Companies become so dependent on these models that they can lose touch with reality.
Firms use all of this information to create maps – market segmentations, research reports – of how customers use their products. But these maps are poor substitutes for actual human contact. Many managers make critical decisions based on numbers, without any personal feeling for the people they serve. They fail to spot new opportunities and innovative solutions for customers.
Nike has built an entire culture that celebrates the potential for athletic greatness in each of us. The company’s headquarters resemble an athletic center; its employees take breaks for running, basketball and soccer games. The people who develop running shoes are usually runners themselves. They possess a basic intuition that cannot be captured in any market report.
Other major companies have learned the value of empathy:

  • IBM helps customers keep their information technology up and running by staying as close to them as possible.
  • Microsoft succeeded with the Xbox because it was designed for gamers by developers who love games.
  • Apple makes computers, iPhones, iPads and iPods for people who covet cool, easy-to-use products. The company’s organizational culture reflects its customers’ lifestyles.

Business happens on the street, in stores and in homes. When companies have a real connection with end users, they come up with better product designs. Harnessing the power of empathy closes the gap between abstract data and reality.
Consumers don’t buy goods based on demographics. Nobody, for example, opens his wallet because he’s a 25- to 30-year-old white male with a college degree. As people go about their daily lives, problems arise that beg for solutions. Consumers are willing to spend money on solutions that will get the job done. Your ability to empathize with them and anticipate their needs determines whether your product or service will sink or swim in the marketplace.
It’s worth noting that Sony co-founder Akio Morita and Apple’s Steve Jobs were famous for never commissioning market research. Instead, they’d just walk around the world watching what people did. They put themselves in their future customers” shoes.
Think about it. What would be some ways you could observe actual clients using your company’s products or services? How could you walk in their shoes? I’d love to hear from you.

Real People in the Information Age

I’ve been thinking about our need to demonstrate more empathy, especially in large organizations and workplaces. I see this in the work I do healthcare coaching and consulting.
Most organizations over-rely on data, to the exclusion of face-to-face customer contact. It’s important to remember that we are intrinsically social animals, with an innate ability to sense what others are thinking and feeling.
We rely on our intuition to help us make decisions. But in large groups, contact is lost – as is our instinct for determining what’s going on outside the group. Corporations can become far too insular.
If you stay in touch with colleagues and customers, you’ll have a better sense of what’s going on in the world. You’ll also surpass competitors at spotting new opportunities.
Large institutions often choose to rely on data and market research for information on customer experiences, abandoning face-to-face interactions that preserve relationships. These businesses invariably become far removed from their customers’ day-to-day lives.
In the words of Polish philosopher Alfred Korzybski, the map is not the territory.
Harley-Davidson is one notable exception, its office a shrine to the motorcycle culture the company helped create. Offices display photos, memorabilia and banners from rallies. Customers and employees ride together. Engineers, accountants and administrative staff acquire an intuitive understanding of the customers who buy their products.
Harley-Davidson’s leaders mandate that company executives spend measurable time on the streets with motorcycle riders. While many employees don’t ride, the company nonetheless instills its lifestyle and values. Empathy is a key element of this corporate strategy.
In many workplaces, however, this is not the case. Instead of opportunities to mingle with customers, marketing departments rely on data to identify the demographics of their customers. Personas are created from marketing research and internet data to represent groups of customers.
Companies monitor pictures, Web browsing history and the ads people select or choose to click, and based on that data, they tailor their merchandise to a targeted audience.
How about in your place of work? In what ways are there missed opportunities to connect with real clients? I’d love to hear from you.

The Business Case for Empathy

[two_third_last]The more an organization can understand and empathize with the key motivators of their employees and customers, the more likely that organization will have sustainable success. ~ Chip Conley, author of Peak: How Great Companies Get Their Mojo from Maslow
In an uncertain economy, empathy may seem like a soft business skill. It can, however, serve as a catalyst for new growth, innovation and employee engagement, all of which drive profits and long-term results.
I’ve seen this happen within some of the companies I consult for through leadership coaching. The more an organization demonstrates care for its customers and employees, the greater the potential for uninterrupted growth, higher profits, improved products and happier employees. Empathy may, in fact, be the most under-appreciated and overlooked strategic business tactic.
Empathy is a powerful social force. Physiologically, each of us is hard-wired to care. Specific brain cells known as “mirror neurons” enable us to experience other people’s emotions. This capacity contributes to our levels of intuition, thoughtfulness and insight.
But what I’m finding with some of the clients I work with, like in hospital coaching, is that as we try to cope with the daily challenges of an increasingly fast-paced world, it’s easy to lose the skills of empathy. We need to reclaim our basic empathy abilities, which get lost in the shuffle of stultifying business routines. Organizations as well can learn to become empathic to forge connections with customers and employees.
“Companies prosper when they tap into a power that every one of us already has – the ability to reach outside of ourselves and connect with other people,” writes Stanford University Adjunct Professor Dev Patnaik in Wired to Care: How Companies Prosper When They Create Widespread Empathy.
We can become so focused on “getting things done,” that we forget to connect with others, our co-workers and customers on a basic human level. And organizations lose touch with their customers, which is why they’re in business in the first place.
What do you think? Does this ring true for you? I’d love to hear from you.