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Why Leading with Compassion is the Future for Business

leading_with_compassionThe most productive and profitable companies have a leadership style where leaders spend more time developing and recognising their staff, are open to feedback (including negative comments) and promote teamwork. 

According to research by Christina Boedker, from the Australian School of Business, out of all of the various measurements they looked at in an organisation, it was, the ability of the leader to be compassionate – that is, "to understand people's motivators, hopes and difficulties and to create the right support mechanism to allow people to be as good as they can be" – that had the greatest correlation with profitability and productivity.

Father versus Mother

The old "command and control" style of leadership is falling apart, giving rise to the new "connect and collaborate".  Think of it as the authoritative Father style of leadership being replaced by the love and empathy of the Mother.

Those that lead by intimidation might appear to get results, but they end up being short-term, often causing anxiety in others.  This leads to poor workplace morale and staff who either leave the company prematurely, fail to work at their best or seek revenge.

A study by Jana Kuoppala and Associates found that good leadership was associated with a 27 percent reduction in stress leave and a 46% cut in the disability pension.  Employees also had high levels of psychological well-being.

In the past, compassionate style of leadership was seen as weak.  But it's actually much harder to show compassion and understanding for others versus demanding (or bullying your way) to get what you want.

But what does compassion mean?

According to Geoff Aigner, the author of Leadership Beyond Good Intentions: What It Takes To Really Make A Difference, people typically confuse compassion with kindness.

In an interview for the Australian School of Business Aigner explains, "There is a point that all managers face, wanting to be nice to people, but also having an organisational purpose. I have often seen leaders getting stuck trying to balance the two, either being too hard or too soft in their approaches." He acknowledges that "taking responsibility for organisational systems and the people in them can be overwhelming, tiring or frightening for managers".

This confusion arises during the common dilemma of a manager having to let a staff member know that they they are not performing at the level expected.  However, while this can be straightforward for some workers who are easy to work with, it is tricky for staff members who are perceived of as fragile – "they may come from a minority group or be difficult to deal with", suggests Aigner.  But for a manager faced with this situation, to stick his or her head in the sand is counter-productive, he says. "Whether the reluctance to address the performance issue is due to kindness (or fear), failure to address the real issue actually blocks the under-performing person's growth and the system is damaged."

Compassion is not about letting staff get away with poor productivity, or ignoring behaviour that stops others from performing well.  Instead, it is more about accepting the person for who they are and allowing them the freedom to perform at their best (this can also mean letting them go, in a compassionate manner).  And it's letting poor performing staff know,  compassionately, what they need to improve, rather than blast them about how bad they are and giving them all the personal insults you can muster.

Wanting the Best for Others

As Marcus Buckingham points out in First, Break all the Rules  the world's greatest managers believe that with enough training, a person can achieve anything he sets his mind to.  Instead of helping people to overcome their weaknesses, great managers find out what a person likes to do and then leverages off a person's strengths to enable them to do work that they excel at.

While Liz Wiseman in the book, Multipliers: How the Best Leaders Make Everyone Smarter, found that great leaders are multipliers.  They actually improve the intelligence and capabilities of those around them by 2 times.  Multipliers look beyond their own genius, instead focus their energy on extracting and extending the genius of others.  They don't get a little more, they get vastly more.  While those they labelled as Diminishers, stifled others and diluted the organisation's intelligence and capabilities.  Effectively, staff were working at 50% their capacity.

In the book, Great by Choice by Jim Collins, he researched highly successful companies and  found that, like in his previous book Good to Great, great leaders are Level 5 leaders who lead with high levels of humility and personal will.  It's actually incorrect to think that good leaders are arrogant and need to be the personal face to the company.  Great leaders deflect having the attention on them and refuse to need their egos inflated.

This leads to another interesting insight from Boedker's research is that out of four levels of leadership from the executive level through middle management to frontline managers, it's the lowest level of leaders that drives a company's profitability.

"Sometimes the assumption is that leadership is only at the elite level and that leadership development should concentrate on the executive team," Boedker says. "But leadership exists at all levels and in reality frontline managers tend to supervise more people and therefore can have a far greater impact. And compassion is a two-way thing. It flows from the top down but also, importantly, from the bottom up. In other words, hard conversations must be initiated by all staff, including subordinates who can give their bosses valuable feedback because all leaders need compassion to achieve personal growth and be the best they can be."

A high performance workplace allows for two way communication between frontline staff and management.  In fact, the  Boedker study has found that the difference between high performing and low performing workplaces are that staff, at all levels of the company, welcome feedback and criticism.

In fact, the same study found that if leadership skills of the frontline managers were improved from the bottom 10%, to reach the top-performing 10% that would have a positive impact on EBIT (Earnings Before Interest and Tax) of 8.2%.

Every day, leadership styles that use coercion, personal criticism and disrespect for others is slowly starting to fade, giving rise to leaders who put their egos behind them and support and take an interest in their staff to make them the best that they can be.  Ahem!




Phto Credit: Flickr, Jegi